23rd September 2021

A tax-efficient way of saving for your grandchildren

As we look to the future, and with impending tax rises, we explore the many options grandparents have to invest in their grandchild’s future.

As you already know, with investing it’s not necessarily about how much money you have to invest, but also how much time you have to invest. For those with newborn grandchildren, this could be the perfect time to open a Junior ISA as a way of saving and contributing towards their future. It’s a smart, cost-effective way of putting money away tax-free up to the yearly limit. This figure, which has been accumulating over the years, is then available to the child on their eighteenth birthday. Contributing towards their future plans such as driving lessons, travel or even towards their first home. 

A Junior ISA offers an option to create a substantial nest egg for the child as they take their first steps into adulthood. We like to think of a Junior ISA as a responsible gifting alternative, while instead of spending money on frivolous and un-environmentally friendly plastic toys, you are focusing on their future, and providing for future goals and adventures.

Why is a Junior ISA a smart saving option?

Put simply, it means getting returns on your previous returns. It sounds simple enough, but over long periods of time, saving £9,000 a year tax-free results in a significant amount. The higher your starting amount and the higher your investment return, the faster your savings compound. The regulated amount changes each year in line with government guidelines, but if you save through a Children’s ISA recommended account, we can ensure they will keep you updated on this. 

The parents or guardian of the child can open a Junior ISA at any time for a child under the age of 18, however, if you have a newborn in the family, opening an account and saving early can put the power of compound growth in your favour.

With a range of options available to you, at The Children’s ISA, we’re here to help to point you in the direction of the right ISA for your investing needs. From ethically managed to low-cost accounts, we’re sure we can find the right fit for your financial plan.


Let’s look at an example. If you invested the maximum amount per month which is currently £750. So over one year the Junior ISA allowance is £9,000. Based on you (and other people) investing the maximum amount each month and each year, over eighteen years that would roughly accumulate to £261,901.52*

*Based on 5% growth per annum. Please note,  past performance is not necessarily a guide to future performance and the value of your investment may fall as well as rise, and any income received in the form of dividends may fluctuate. You may not get back the full amount when the account is closed. If paying regular monthly contributions please bear in mind that if contributions are not maintained you will be less likely to achieve the investment amount that was originally projected.

© The Children’s ISA Ltd 2021. All rights reserved.

The website and the information contained therein should not be regarded as an offer or solicitation to conduct investment business in any jurisdiction other than the UK. Past performance is not necessarily a guide to future performance and the value of your investment may fall as well as rise, and any income received in the form of dividends may fluctuate. You may not get back the full amount when the account is closed. If paying regular monthly contributions please bear in mind that if contributions are not maintained you will be less likely to achieve the investment amount that was originally projected.

The information on this website is not advice, it is provided solely to enable you to make your own investment decisions. The investments and /or investment services referred to may not be suitable for all investors.

The Children’s ISA Limited is authorised and regulated by the Financial Conduct Authority. (FCA No: 563043)
The Children’s ISA Limited is a company registered in England and Wales. Registered Company Number: 07486015

Registered Office: 1 Lowry Plaza, The Quays Manchester, M50 3UB.
Trading address: Unit 2, Digital Park, Pacific Way, Salford Quays, M50 1DR