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From Cradle to Grave: Planning for Retirement

Rising house prices, poor wage growth and the increasing cost of education means younger generations face an uphill battle when it comes to their finances. Research shows that millennials are set to receive more money from relatives than ever before, and financial help from grandparents can make a real difference to younger people’s lives.

“Grandparents are often keen to contribute to their grandchildren’s savings as a way of rolling wealth down the generations as well as saving tax. When money or assets are paid into an account for a child’s benefit, this is treated as a gift. Some may become free or exempt from inheritance tax, whilst others may be subject to it. Tax rules can change over time, and the value of benefits can often depend on the child’s circumstances. The reality is, savings accounts, pensions, trusts and premium bonds can all provide long-lasting benefits,” says Granville Turner, Director at Company Formation Specialists, Turner Little.

If your grandchildren are under 18, then you could put up to £9,000 per year into a Junior ISA each year, with no tax payable on the earnings. But if you want to think more long-term, there’s nothing stopping you from setting up a pension for your grandchild. Children are allowed to have a pension, and anyone can contribute. The money has decades to grow, and by the time your grandchildren can access the money, it should have grown a substantial amount to help them in later life.

Establishing and funding a trust for your grandchild enables you to set guidelines on how you’d like the money to be used, release funds at key milestones, help protect the inheritance from potential depletion and help your grandchild meet specific goals, such as buying a home, starting a business, or retirement. A discretionary trust allows you to gift money to your grandchildren, with trustees in charge of managing and distributing the assets. The money stops being part of your estate when you pay it into the trust, but certain conditions do have to be met, and the rules around trusts can be complex, so get in touch with us today to discuss your options.

At Turner Little, we have years of experience delivering proactive, professional guidance on the setting up and running of trusts. Our specialist team of experts will deal with matters pragmatically and sensitively, taking the time to meet with you and discuss your individual objectives in detail, in order to provide solutions that are uniquely tailored to your needs.

Turner Little and its affiliates do not provide tax, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.