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.

As a grandparent,providing financial support can be more tax-efficient than helping through the child’s parents due to potential tax implications. By exploring optimal savings and investment options, you could maximise the impact of your generosity.

BUILDING A FOUNDATION WITH A JUNIOR ISA

A Junior Individual Savings Account (Junior ISA or JISA) is often the first step in securing financial stability for grandchildren. These accounts provide tax-free growth, meaning that any interest or gains are not liable for Capital Gains Tax (CGT).

Contributions of up to an annual limit of £9,000 are allowed (2025/26), and the funds become accessible once your grandchild turns 18. It is important to note that children born before 3 January 2011 with child trust funds (CTF) can’t have a JISA opened unless the CTF funds are transferred to a JISA, and the CTF is closed.

PLANNING FOR THE LONG TERM WITH A JUNIOR SIPP

For grandparents looking to help secure a grandchild’s long-term financial future, a Junior Self-Invested Personal Pension (Junior SIPP) could be a suitable choice. Designed explicitly as a retirement savings scheme, it allows you to invest up to £2,880 each year (2025/26), with the government offering 20% tax relief, increasing the total contribution to £3,600.

Although funds in a Junior SIPP are locked in until at least the age of 57, starting early enables decades for potential compound growth. This foresight could lead to a substantial retirement fund, offering your grandchild the financial security they might need later in life.

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This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

For guidance, seek professional advice. The value of your investments can go down as well as up, and you may get back less than you invested.

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.