How Can Grandparents Save for their Grandchildren?
Grandchildren are our pride and joy. There is no better feeling than watching them grow and blossom from troublesome tots to thriving teens and adults. Helping your grandchildren build a solid financial foundation is one of the greatest gifts a grandparent can give.
At Foresters Friendly Society, we’ve made it easier and more affordable to help save for your grandchild.
Grandparents have a number of options when it comes to saving for their grandchildren. Some options you can set up yourself, and others may need a parent or guardian to set up the account, which you can then contribute to.
With Foresters Friendly Society, we have different saving plans to help you save for your grandchildren’s future:
- Junior ISAs – A tax-free, long term Junior ISA (often referred to as a JISA) is designed to help you give your grandchild the best start in life. Junior ISAs must be opened by a parent or guardian, but once opened you can contribute to the JISA by direct debit or lump sums totaling up to your grandchild’s annual JISA allowance of £9,000 in the 2021/2022 tax year.
- Children’s Tax Exempt Plan – With the option for both parents and guardians or grandparents to open an account, a Children’s Tax Exempt Plan allows you to save £25 a month for between 10-25 years. The plan can be held alongside a Junior ISA or Child Trust Fund and gives your grandchild access to a tax-free cash sum whenever they need it most.
- Child Trust Fund Top Ups – If your grandchild already holds a Child Trust Fund with us, you can help contribute to it with monthly payments from as little as £5, or larger one off lump sum top ups from £50, giving you the perfect place to deposit a little extra cash for Christmas or Birthdays.
Can I open a savings account for my grandchild?
Depending on the type of account that you think would be the best option for you and your grandchild, you can either open a savings account, or help contribute to your grandchild’s existing account easily and hassle-free.
With our Junior ISAs, your grandchild’s parent or guardian will need to open the account on behalf of your grandchild. However, once the account has been opened, you will be able to contribute any amount by direct debit or lump sum payments, up to your grandchild’s Junior ISA allowance limit of £9,000 in the 2021/2022 tax year.
Children’s Tax Exempt Plan’s, on the other hand, can be opened by a grandparent from as little as £25 per month. You can choose how long you’d like to contribute for – any period between 10-25 years, and with your contributions invested in our Flexible Growth Fund, your grandchild’s savings have the potential for growth over the longer term.
The plan can also be held alongside a current Junior ISA or Child Trust Fund, giving you even more flexibility with your tax-free saving options.
Child Trust Funds were replaced by Junior ISAs. However, if your grandchild has an existing Child Trust Fund account open with us, you can help to top it up by contributing any amount up to the annual allowance of £9,000 in the current tax year.
How much can I give my grandchildren tax free?
In addition to savings accounts you can open or pay into for your grandchild, each grandparent can currently gift up to £3,000 to their grandchild in any one tax year, tax-free.
If you don’t use the entire £3,000 allowance in any single year, the balance can be carried over to the following tax year. However, this cannot then be carried forward for a third consecutive year.
Long-term saving options for your grandchildren with Foresters Friendly
Saving over the long term for your grandchild is a great way to make sure they have access to the funds they need, when they need them. With Foresters Friendly, our long-term saving options are simple, easy to use and give you peace of mind knowing you are investing in your grandchild’s future.
Pay into your grandchild’s Junior ISA
A simple way to build up savings, paying into your grandchild’s Foresters Friendly JISA means your savings have the opportunity to grow over the long term thanks to the potential addition of annual and final bonuses.
Your child will also have access to exclusive Foresters Extras membership benefits at no extra cost, including discretionary grants to help cover the cost of things like higher education or healthcare costs such as dental and optical bills.
With the option for parents or guardians to open an account from any age between 0-18 years, there’s no such thing as starting too early to save for your grandchild’s future.
Find out more and open a Junior ISA online today.
Open a Children’s Tax Exempt Plan for your grandchild
With affordable contributions of £25 a month, a Children’s Tax Exempt Plan is an easy way for you to save for your grandchild’s future.
You choose how long you wish to save for, and your child can receive their cash sum any time after their 16th birthday
Your contributions are invested in our Flexible Growth Fund, meaning they have the potential for long term growth. Your grandchild will also have access to exclusive Foresters Extras membership benefits at no extra cost, including discretionary grants to help cover the cost of things like higher education or healthcare costs.
It’ a great way to give your grandchildren financial support for the adult years ahead, so why not open a plan today.
When can my grandchild access the money I save for them?
With a Junior ISA, your grandchild can access their savings as soon as they turn 18, at which point their ISA will either continue to be invested as an adult ISA, or the money can be used to further their plans, such as going towards university fees, savings for a deposit on their first home, or even buying their first car.
With our Children’s Tax Exempt Plan, your grandchild must be at least 16 years old to receive the cash lump sum.
You should be aware that in some investment conditions your child may not get back the full amount originally invested. Also, bear in mind that tax rules may change and depend on individual circumstances. Member benefits are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority. The addition of bonuses is not guaranteed.
The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser. You may have to pay for this advice.