How can grandparents start saving 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, and doing so has never been easier. As a grandparent, you can open savings accounts for grandchildren that they can access when they reach adulthood.
What saving accounts are there for grandchildren?
Want to start saving for your grandchildren? Grandparents have several 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.
There are a range of different saving accounts for grandchildren that you can pay into, including:
- Junior ISA Top Ups – If your grandchild already holds a Junior ISA (JISA) with us, 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 2024/2025 tax year.
- 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.
Wondering which is the best saving account for your grandchild? Read on for more information.
What is the best savings account for my grandchild?
So, what’s the best saving account for grandchildren? With Foresters Friendly, you can help contribute to your grandchild’s existing account easily and hassle-free.
One your Junior ISA, has been opened, you will be able to contribute any amount by direct debit or lump sum payments, up to your grandchild’s ISA allowance limit of £9,000 in the 2024/2025 tax year.
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.
Tax free saving for grandchildren
In addition to savings accounts for your grandchildren that you can regular pay in to, 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.
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.
With your grandchild’s ISA, they 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 and 18 years, there’s no such thing as starting too early to start saving for your grandchild’s future.
Contributions paid into a Foresters Friendly Junior ISA are invested in a fund which includes stocks and shares, the value of the plans may fall as well as rise and your grandchild may get back less than you have paid in.
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 your grandchild’s 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.
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.