▶ We all want the best for the children in our lives. We want to help them pursue their dreams and achieve their goals. As adults, we have the opportunity to play a role in building their financial future and giving them the best possible start in life.
▶ Instead of traditional gifts, saving or investing money on their behalf can provide a meaningful contribution that grows over time a gift they’ll appreciate for years to come.
👉 Why consider investing instead of saving? 👇
▶ While putting money into a children’s savings account is an option, inflation the gradual rise in the cost of living can erode the real value of those savings over time.
▶ Savings accounts are ideal for short-term needs, especially if the funds are required within the next five years. However, if you’re able to think long-term and have the patience to wait, investing in the stock market may offer greater potential returns. While investing does involve more risk, it can help your money grow over time and outpace inflation.
▶ It’s important to remember that, unlike cash savings, investments can rise or fall in value. This means your child could get back less than you originally invested.
👉 Tax considerations when gifting money to a child 👇
▶ When you contribute money or assets to an account for a child’s benefit such as a Junior ISA or Junior SIPP, these contributions are generally treated as gifts. Some gifts are tax-free or exempt, while others may be subject to inheritance tax (IHT).
▶ If you’re investing outside of a Junior ISA or SIPP, both the child’s tax position and your own need to be considered to ensure you’re managing tax efficiently.
⛔ By planning carefully and thinking ⛔
I am an Independent Financial and Mortgage Adviser and have worked in Financial Services for over 12 years. During my career I gained experience in assisting both individual and corporate clients.…
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