sm124 - Flipbook - Page 6
Financial Planning
Is it time to invest in your
grandchildren’s future?
Protect their future with strategic planning to leave a lasting legacy
Investing for your grandchildren isn’t just about giving wealth; it’s
about creating opportunities and stability for their futures. Whether it helps
fund further education, a home deposit or even retirement, strategic planning
enables you to leave a lasting legacy.
age 60, the account becomes a tax-free boost
for retirement. O昀昀ering this option provides
昀氀exibility for your grandchild’s medium- or
long-term 昀椀nancial needs.
MINIMISING INHERITANCE
TAX THROUGH GIFTING
One of the most e昀昀ective ways to support
your grandchildren is by minimising your
estate’s exposure to IHT. Using your current
annual gifting allowance of up to £3,000, or
arranging regular gifts from surplus income,
ensures these gifts stay exempt from
IHT. Alternatively, to maintain control and
safeguard the funds, grandparents might
consider setting up trusts. t
s a grandparent, providing 昀椀nancial
A
Self-Invested Personal Pension (Junior SIPP)
Is it time to get
professional advice
tailored to your family?
support can be more tax-e昀케cient
could be a suitable choice. Designed explicitly
Investing in the future of the next
than helping through the child’s
as a retirement savings scheme, it allows you
generation is one of the most meaningful
parents due to potential tax
to invest up to £2,880 each year (2025/26),
decisions you can make. Ensure it is
implications. By exploring optimal savings and
with the government o昀昀ering 20% tax relief,
done wisely, securely and with their best
investment options, you could maximise the
increasing the total contribution to £3,600.
interests at heart. If you would like to
Although funds in a Junior SIPP are locked in
explore options or require professional
until at least the age of 57, starting early enables
advice on managing investments for your
BUILDING A FOUNDATION WITH A JUNIOR ISA
decades for potential compound growth. This
grandchildren, please contact us.
A Junior Individual Savings Account (Junior ISA
foresight could lead to a substantial retirement
or JISA) is often the 昀椀rst step in securing 昀椀nancial
fund, o昀昀ering your grandchild the 昀椀nancial
stability for grandchildren. These accounts provide
security they might need later in life.
impact of your generosity.
This article does not constitute tax, legal or 昀椀nancial
tax-free growth, meaning that any interest or gains
HELPING THEM SAVE FOR LIFE’S MILESTONES
advice and should not be relied upon as such. Tax
When your grandchild turns 18, a Lifetime ISA
treatment depends on the individual circumstances of
are allowed (2025/26), and the funds become
(LISA) is an option to assist them in saving
each client and may be subject to change in the future.
accessible once your grandchild turns 18. It is
for their 昀椀rst home or planning for retirement.
For guidance, seek professional advice. The value of
important to note that children born before
Each year, they can currently contribute up to
your investments can go down as well as up, and you
3 January 2011 with child trust funds (CTF) can’t
£4,000, with the government providing a 25%
may get back less than you invested.
have a JISA opened unless the CTF funds are
bonus on these deposits, which can amount
transferred to a JISA, and the CTF is closed.
to up to £1,000 annually.
are not liable for Capital Gains Tax (CGT).
Contributions of up to an annual limit of £9,000
LISAs are particularly helpful for 昀椀rst-time
06
A pension is a long-term investment not normally
accessible until age 55 (57 from April 2028 unless the
PLANNING FOR THE LONG TERM
home buyers, as funds can be accessed before
plan has a protected pension age). The value of your
WITH A JUNIOR SIPP
age 60 for property purchases (a 25% charge
investments (and any income from them) can go down
For grandparents looking to help secure a
applies if withdrawn before 60 for any other
as well as up, which would have an impact on the level
grandchild’s long-term 昀椀nancial future, a Junior
reason). If the savings remain untouched until
of pension bene昀椀ts available.
