140 Investing for Grandchildren

Over the past year, 47% of grandparents invested more for their grandchildren. It isn’t clear if this is linked to the pandemic and our spending patterns, but what is clear are the huge benefits of doing this. Some research by NatWest shows that while three quarters of parents save for their children, around 83% of them stick to the “safe” option and save with cash plans. But this isn’t safe, as the impact of inflation means that the purchasing power of these safe cash balances actually goes backwards over the longer term, which is a real danger considering that investing for children or grandchildren is generally for the long term.  There are a few products available for investing for children. The two main options are a Child SIPP or a Junior ISA. Each product has different advantages and disadvantages. For this week’s episode, I discuss these two products, how they work, their benefits and drawbacks and any tax rules that surround them. I also touch upon the various types of Trusts you could put in place for you grandchildren.