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\u2019s 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\u2019t really need, which in turn may result in more money to put towards savings.<\/p>\n\n\n\n
Rather than joining the crowds of Christmas shoppers, why not consider some alternative presents for your children or grandchildren that won\u2019t be cast aside by the time the Christmas tree comes down.<\/p>\n\n\n\n
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\u2019s future. Seeking expert financial and tax advice will help with the options open to you.<\/p>\n\n\n\n
Imogen Congdon, wealth manager at RBC Brewin Dolphin gives her top five alternative Christmas gifts:<\/strong><\/p>\n\n\n\n The annual \u00a33,000 gifting allowance can be used to fund a Junior ISA, or JISA – the limit is currently \u00a39,000 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\u2019s life. The long-term nature of JISAs also makes them ideal for saving in stocks and shares. Starting at birth, a \u00a350,000 pot could be built by the child\u2019s eighteenth birthday on contributions of roughly \u00a3150-a-month, assuming annualised returns of 5% after charges. Increase the contribution to \u00a3300-a-month, and the Junior ISA will be looking at a windfall of around \u00a3100,000 without adjusting for inflation.<\/p>\n\n\n\n It\u2019s not widely known that you can open a pension for someone at any age, and they don\u2019t need to have joined the workforce. Parents or grandparents can contribute to a junior pension, usually up to \u00a32,880 per tax year. Contributions benefit from 20% income tax relief, which boosts that \u00a32,880 to \u00a33,600. Contributions to a junior pension also count as gifts for inheritance tax purposes. However, the gift might fall within your annual gifting allowance of \u00a33,000. Under current rules, someone who is a child today won\u2019t be able to access a pension pot until they turn 57. There is an expectation that may increase to 58 in time.<\/p>\n\n\n\n There are savings accounts for children currently paying around 4% or 5% AER for easy access. If you already have a children\u2019s savings account and are thinking of topping up for Christmas, make sure you check the interest rate first \u2013 there are a lot of accounts out there for both children and adults so it\u2019s 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. <\/p>\n\n\n\n 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\u2019s worth noting that if income from a parental gift exceeds \u00a3100 per year, the parent will have to pay tax on all the trust\u2019s income until the child reaches 18.<\/p>\n\n\n\n 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 \u00a31 bonds, and each has an equal chance of winning – so the more you buy, the more your chances improve. The minimum purchase amount is \u00a325 for one-off purchases – and for monthly standing orders, the maximum amount you can hold is \u00a350,000. Anyone can now buy premium bonds for under-16s and nominate the child\u2019s parent or guardian to hold them.<\/p>\n\n\n\n Disclaimers<\/strong><\/p>\n\n\n\n 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.<\/p>\n\n\n\n -ENDS-<\/strong><\/p>\n\n\n\n <\/p>\n\n\n\n PRESS INFORMATION<\/strong><\/p>\n\n\n\n For further information, please contact:<\/p>\n\n\n\n Payal Nair payal.nair@brewin.co.uk<\/a> \/ Tel: +44 (0) 20 3201 3342<\/p>\n\n\n\n NOTES TO EDITORS<\/strong><\/p>\n\n\n\n About RBC Brewin Dolphin<\/strong><\/p>\n\n\n\n RBC Brewin Dolphin<\/a> is one of the UK and Ireland\u2019s 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.<\/p>\n\n\n\n RBC Brewin Dolphin\u2019s 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.<\/p>\n\n\n\nJunior ISA<\/strong> <\/h3>\n\n\n\n
Pension<\/strong><\/h3>\n\n\n\n
Savings Accounts<\/strong><\/h3>\n\n\n\n
Investment Account<\/strong><\/h3>\n\n\n\n
Premium Bonds<\/strong><\/h3>\n\n\n\n