Building wealth for your children’s future is an important goal for many investors, but that doesn’t mean it’s not one that can often be complex.
As such, we’ve put together this article to show you some of the ways you can go about investing in your children’s future, to help secure a successful outcome for them.
From financial advice to opening a junior investment account, scroll down to learn more.
Contact a Modern Wealth Management Service
When it comes to investing in your children’s future, one of the most effective steps to take is to contact a modern wealth management service.
You can receive expert guidance from a financial adviser, and they can make sure you take the most suitable approach to investing for your children, which factors in several important considerations for your finances.
For example, your adviser can discuss every aspect of your finances with you, including your income, how you spend your money, and any particular financial goals you have for your children – as well as any challenges you might be facing with reaching them.
With a full understanding of your situation, your adviser can tailor their guidance to suit your unique requirements, and offer recommendations that align with your financial circumstance.
On top of this, you can consider ongoing advice from your expert, so as your circumstance begins to change, you can regularly adjust your plan to continue building your children’s wealth effectively.
Explore Junior Investment Accounts
Another way you can invest to secure your children’s future is through junior investments accounts. These are specifically designed for you to begin growing your children’s finances tax-free, so they have savings to access when they’re older.
One junior account you should consider is a Junior Individual Savings Account (JISA). With this account, you can grow each child’s savings every year by investing up to a certain amount.
This amount is specified by the annual JISA allowance for the tax year – for the 2023/2024 tax year, this is £9,000. The money you invest up to this amount each year is sheltered from tax.
Money can only be contributed to these accounts every year, but not withdrawn until the child turns 18, when the JISA will turn into a standard ISA.
This can be a great way to build wealth towards certain goals you have for your children’s future. For example, these savings can go towards education fees, purchasing a property, or any other ambitions you have.
Also, the money remains secure up until the child becomes an adult, so there’s no possibility of money being withdrawn early for reasons other than the child’s benefit.
Evaluate Your Inheritance
You can also consider evaluating your inheritance, which enables you to leave your wealth behind for your children when you pass away. This is a good way to invest in your children’s future, and ensure they are supported when you are no longer here.
Your estate which you leave to your children can consist of cash, property, investments, antique belongings, and more.
Inheritance Tax (IHT) may apply to the estate you leave for your children – since only the value of your estate left to your spouse or civil partner is fully exempt.
However, you can make the most of your IHT threshold to shelter a certain value of your estate from tax, up to £325,000. Moreover, if you choose to leave your home to your children, this threshold is increased to £500,000. Understanding the process of filing probate and navigating inheritance tax laws is crucial to ensure a smooth transfer of assets to your beneficiaries.
By making these important considerations, you can organise your inheritance in the right way to shelter as much of your wealth from tax as possible when you leave it for your children.
Investing in your children’s future no longer needs to feel complex or challenging. Contact your modern wealth manager today to start building your children’s wealth in the right way.
Please note, the value of your investments can go down as well as up.
