In 1785 a French mathematician named Charles-Joseph Mathon de la Cour set out to take the mickey out of Benjamin Franklin. He wrote a parody of Franklin’s Poor Richard’s Almanack built around a character called Fortunate Richard: a man so tediously, unbearably American in his optimism that he left a small sum in his will on the condition that nobody spend it for five hundred years. The joke was that only a Franklin could believe the future was worth planning for on that kind of timescale.
Franklin, then seventy-nine, read it. He was delighted. And he decided the fictional Richard was onto something.
So he added a codicil to his own will. He left £1,000 to Boston, where he was born, and £1,000 to Philadelphia, where he made his name. The condition: the money was to be lent out in small amounts to young tradesmen starting out, at modest interest, and otherwise left completely alone. For a hundred years the cities couldn’t touch most of it. For two hundred, they couldn’t touch the rest.
A man had written to mock him for believing in the distant future. Franklin thanked him for the suggestion.
He died in 1790. The money then did what he’d worked out it would do, which was almost nothing for a very long time and then, quite suddenly, a great deal. By 1990 the £1,000 he’d left Boston was worth around four and a half million dollars. Philadelphia’s, handled with slightly less care, about two million. It built trade schools. It’s still going.
The remarkable part isn’t the money. Franklin didn’t leave a fortune. He left two very ordinary sums and one extraordinary instruction: don’t touch it. The fortune was made entirely by time.
In the last post I wrote about the Standard Life research showing a quarter of Gen Z aren’t saving much for their own retirement because they’re banking on an inheritance, and the awkward fact that a good number of their parents intend to spend it first. That was the pessimistic half of the story. This is the other half, and it’s a good deal more hopeful, because a growing number of parents have quietly arrived at the thing Franklin knew.
Dr Eliza Filby, who writes very sharply on inheritance and the generations, has a recent piece on exactly this. Her observation is that parents and grandparents are increasingly opening pensions for their children, some from birth, and that what they’re really handing over isn’t money. It’s time. She calls it turning time into the new inheritance.
She reaches for the example anyone thinking about this eventually reaches for. Warren Buffett is worth what he’s worth not because he’s the finest investor who ever lived, though he is, but because he started at eleven and never stopped. Morgan Housel puts it best in The Psychology of Money: his skill is investing, but his secret is time. A pension opened for a newborn has the one thing Buffett didn’t have at eleven and no adult can ever buy back: a seventy-year run at it.
Filby’s more interesting point is about why parents are doing this now. Some of it is inheritance tax, and we’ll come to that. Some of it is longevity: if this generation of children routinely lives to a hundred, as Lynda Gratton and Andrew Scott have argued we should expect, a thirty-year retirement needs a bigger foundation, and a pension started at birth stops looking eccentric. But she thinks the real driver runs deeper. It’s agency. Parents who don’t believe they can give their children what their own parents gave them, an affordable house, an easy start, can still give them this. A small and almost painless sum now becomes something serious in half a century. It’s a rare feeling of control at a time when a lot of people feel financially swamped.
And it isn’t only families. Filby notes that governments have reached the same conclusion. From 2026 Germany is paying ten euros a month into an invested pension account for every schoolchild, left untouched until retirement, under the faintly cheerful name Frühstart-Rente, the “early-start pension.” America has been trying variants of the same idea. We had our own, Gordon Brown’s Child Trust Fund, before the Coalition scrapped it. The pattern is the same everywhere: the state starting to behave less like a safety net and more like an early-stage investor, buying its citizens a small stake in the markets from childhood and letting time do the rest.
The British tool for the private version is the junior pension. You can pay up to £2,880 a year into a child’s pension and the taxman rounds it up to £3,600. It’s locked away until they’re nearly sixty, which sounds like a flaw and is in fact the whole design: nobody can raid it, so it compounds undisturbed for decades. Franklin’s codicil in miniature, and entirely legal.
The tax angle has sharpened lately. From April 2027 most unused pensions will fall inside your estate for inheritance tax, undoing decades of received wisdom about leaving the pension for last. At the same time, that £2,880 sits comfortably under the £3,000 a year you can give away free of IHT. So handing money to a child’s pension early, into somewhere it can’t be spent, quietly does two jobs at once. That’s where current legislation sits, though it does move about, and how any of it applies depends entirely on your circumstances.
None of it is guaranteed. Investments fall as well as rise, compounding works in both directions, and a fifty-year projection is an illustration, not a promise.
But here’s the thread that ties the two halves together. Filby’s warning is that inheritance is becoming a poor thing to build a retirement around, and not only because parents may spend it. People are inheriting later and later, often in their own sixties, and a rising share of that wealth is swallowed by care costs before it ever arrives. The house the twenty-five-year-old is quietly counting on may turn up decades too late, smaller than expected, or not at all.
Which means the young saver squinting at their unimpressive pension has misread the whole board. The valuable asset was never the house they can see. It was the thing they can’t: the forty or fifty years in front of them. That’s the asset Franklin bet on, the one Buffett bet on, and the one a growing number of parents are now trying to hand over before anything else gets to it.
You can’t leave someone time in a will. You can only give it to them early, and start the clock.
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