I had my fifth grandchild born into the world this week, and naturally as grandparents, we wish to help them.
I will not, in spite of the tax benefits, be investing money into a pension plan for grandchildren. This new boy born into the world would have to wait 57 years to have access to any of these funds. I’m sure he will have a greater need before then for money, particularly as many of us have experienced the trauma of trying to obtain a mortgage, high-interest rates, young children. The need for money is in our 20s and 30s.
I could invest money into an Individual Savings Account for this grandchild and indeed the others, but they will not have access to this tax-free money until they are 18. However, when they are 18 years of age, this money will belong to them. Should it? Certainly not if we have a wild spendthrift on reaching adulthood.
So what should I do? Fortunately, there is so much – where I can control the money and appoint children as Trustees of tax-efficient Trusts; for that, there will be money for children and grandchildren in the future for their lifetime. I think I prefer that route.
Trevor Downing FPMI FPFS
