How to save money for grandchildren
All grandparents want the comfort of knowing that their grandchildren’s future is in good hands (well, most of them). Investing in your grandchildren is a great way of achieving this goal, while teaching them a valuable lesson about how money works. Saving for your grandchildren and wondering how to go about it? Our guide should point you in the right direction.
What is the best savings account for my grandchildren?
The best savings account for grandparents saving for grandchildren will depend on what you want the money to be used for, and how much control you want your grandkids to have. Find out some of the options available below!
1) Open a savings account in their name
If you want a no-nonsense way of saving money, a children’s savings account is your best bet. You can teach your grandchildren about the value of not spending all of their money in one go, and the joys of gaining interest on money saved. It is definitely a good idea to shop around for the best deal you can get, as some savings accounts offer higher interest rates than others.
2) Start a Junior Pension
Are you someone who likes to plan ahead for the future? Now is the time to start! A junior ISA allows you to save up money for your grandchildren when they turn into adults. The ‘junior’ in junior ISA refers to the fact that children have to be under 18 to be eligible. When they turn 18, they can begin to manage the funds themselves. Best of all, the interest rates that children get are much more profitable than adults! Save money in a junior pension now, and your grandchildren can take advantage of the benefits later.
3) Try premium bonds
The lucky dip of saving options. Instead of putting your grandchild’s savings into a regular account, premium bonds give them the chance to win tax-free prizes every month! Every £1 premium bond you buy has an equal chance of winning - the more you buy, the higher your chances! If your grandchildren find the idea of saving money boring, this option might change their mind.
4) Help them put down a mortgage deposit
Houses in the UK are not cheap. If you do have the capacity, why not make the ultimate money-saving gesture - chip in for your grandchild’s first mortgage deposit. If you can’t afford to pay a large sum up front, you can put some money aside in either a Junior ISA or children’s savings account. It takes a while for the average first-time buyer to get on the housing ladder, but helping your adult grandchildren pay their way will make it much quicker!
5) Leave the money in a trust
The best option if you want your grandchildren to use their money later rather than sooner. Leaving money in a trust for your grandchildren will secure the money until they are old enough to use it carefully. The best part of bare trusts? The money you put in for your grandchildren will not be liable for inheritance tax.