15 December 2025
The festive season comes with added expenses, from gift buying to attending social events, with households said to spend more in December than during the rest of the year. Steep price rises mean it’s more important than ever to have a solid budgeting plan in place. Sticking to a budget can help avoid splashing out on things you don’t really need, which in turn may result in more money to put towards savings.
Rather than joining the crowds of Christmas shoppers, why not consider some alternative presents for your children or grandchildren that won’t be cast aside by the time the Christmas tree comes down.
Parents or grandparents wanting to gift without incurring inheritance tax can make use of the annual gifting allowance, which can be used in a number of ways. Not only will you save shopping time, but you could also be contributing towards your children or grandchildren’s future. Seeking expert financial and tax advice will help with the options open to you.
Imogen Congdon, wealth manager at RBC Brewin Dolphin gives her top five alternative Christmas gifts:
Junior ISA
The annual £3,000 gifting allowance can be used to fund a Junior ISA, or JISA – the limit is currently £9,000 for the tax year 2025/2026. JISAs are a tax-efficient way to save for children or grandchildren, especially if you start contributing to them early on in a child’s life. The long-term nature of JISAs also makes them ideal for saving in stocks and shares. Starting at birth, a £50,000 pot could be built by the child’s eighteenth birthday on contributions of roughly £150-a-month, assuming annualised returns of 5% after charges. Increase the contribution to £300-a-month, and the Junior ISA will be looking at a windfall of around £100,000 without adjusting for inflation.
Pension
It’s not widely known that you can open a pension for someone at any age, and they don’t need to have joined the workforce. Parents or grandparents can contribute to a junior pension, usually up to £2,880 per tax year. Contributions benefit from 20% income tax relief, which boosts that £2,880 to £3,600. Contributions to a junior pension also count as gifts for inheritance tax purposes. However, the gift might fall within your annual gifting allowance of £3,000. Under current rules, someone who is a child today won’t be able to access a pension pot until they turn 57. There is an expectation that may increase to 58 in time.
Savings Accounts
There are savings accounts for children currently paying around 4% or 5% AER for easy access. If you already have a children’s savings account and are thinking of topping up for Christmas, make sure you check the interest rate first – there are a lot of accounts out there for both children and adults so it’s good to shop around for the best interest rates. Some savings accounts will also come with a cash card for older children, which is a great way to help them learn how to budget and look after their money.
Investment Account
Investment accounts can be opened by anyone for a child, using a lump sum or regular premiums. For those who have exceeded their annual JISA allowance investment accounts can hold a portfolio of funds or shares – either picked by yourself or put together by an adviser. Held under a bare trust, the investments are held by a trustee (e.g. a grandparent) for the benefit of the child who will have access to the money from age 18. If the money is put into the trust by anyone other than the parents, the contents are taxed as if they belong to the child. This includes gifts from grandparents and usually means that there is little or no tax to pay on income or gains. It’s worth noting that if income from a parental gift exceeds £100 per year, the parent will have to pay tax on all the trust’s income until the child reaches 18.
Premium Bonds
NS&I premium bonds are a savings account you can put money into (and take out when you want), and the interest paid is decided by a monthly prize draw. You buy £1 bonds, and each has an equal chance of winning – so the more you buy, the more your chances improve. The minimum purchase amount is £25 for one-off purchases – and for monthly standing orders, the maximum amount you can hold is £50,000. Anyone can now buy premium bonds for under-16s and nominate the child’s parent or guardian to hold them.
Disclaimers
The value of investments can fall and you may get back less than you invested. RBC Brewin Dolphin is not a tax adviser. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Information is provided only as an example and is not a recommendation to pursue a particular strategy. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
-ENDS-
PRESS INFORMATION
For further information, please contact:
Payal Nair payal.nair@brewin.co.uk / Tel: +44 (0) 20 3201 3342
NOTES TO EDITORS
About RBC Brewin Dolphin
RBC Brewin Dolphin is one of the UK and Ireland’s leading wealth managers and traces its origins back to 1762. It offers award-winning, bespoke wealth management services, including discretionary investment management and financial planning.
RBC Brewin Dolphin’s expert investment managers and financial planners are based in over 30 offices across the UK, Jersey and Republic of Ireland, with a commitment to high standards of client service, long-term thinking and strong industry knowledge.
As part of Royal Bank of Canada, RBC Brewin Dolphin is able to draw on the strength of a global financial institution to enhance the services it provides to its clients and to drive further innovation across the business.
Disclaimers
The value of investments can fall and you may get back less than you invested.
RBC Brewin Dolphin is a trading name of RBC Europe Limited. RBC Europe Limited is registered in England and Wales No. 995939. Registered Address: 100 Bishopsgate, London EC2N 4AA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
® / ™ Trademark(s) of Royal Bank of Canada. Used under licence.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 100,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada’s biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 19 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/peopleandplanet.