A FORWARD-THINKING GUIDE TO BUILDING A SUBSTANTIAL LEGACY FOR TOMORROW

As a grandparent, you have a unique opportunity to contribute to your grandchildren’s future in a profoundly meaningful way. Beyond cherished memories and life lessons, providing a financial head start can makea significant difference as they navigate key milestones in life.

Whether you envision helping with university fees, a deposit for their first home or simply laying a foundation off financial security, thoughtful planning today can grow into a substantial legacy for tomorrow.

Investing on their behalf turns your generosity into a tangible asset that grows with them. With a range of tax-efficient options, you can make your contributions work harder over the long term. Navigating these choices enables you to support the next generation effectively, aligns with your financial circumstances and ensures your wealth is passed on in a structured and beneficial way.

All contribution limits in this article apply to the 2025/26 tax year, which runs from 6 April to 5 April.

EXPLORING TAX-EFFICIENT ACCOUNTS

A Junior ISA (JISA) is a popular starting point, offering tax-efficient growth on contributions up to the annual limit of £9,000. The money is locked away until your grandchild turns 18, at which point they gain control of the funds. Importantly, contributions to a JISA are generally outside your estate for Inheritance Tax (IHT) purposes, provided you survive for seven years after making the gift.

Additionally, a Junior Self-Invested Personal Pension (SIPP) is an excellent tool for long-term planning. You can contribute up to £2,880 each tax year, with 20% government tax relief, bringing the total to £3,600. While these funds cannot be accessed until retirement age (currently 57), the power of decades of compound growth can create a substantial pension pot, giving your grandchild an incredible start to their retirement planning.

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This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax planning is not regulated by the Financial Conduct Authority, depends on the individual circumstances of each client and may change in the future. For guidance, seek professional advice. The value of your investments (and any income from them) can go down as well as up, which would affect the level of pension benefits available. Investments can fall as well as rise in value, and you may receive back less than you invest.