Saving for the kids?

It’s the time of year for renewing those Student Loan applications and Enable’s IFA’s in Bishop’s Stortford know that parents who want to be in a position to help their children enter adulthood with sound financial footing; such as help with University fees, a first car or money towards a first home deposit, what ever their requirement it's best to plan.

Supporting the next generation can seem a bit daunting but with a few simple steps you can begin to make a difference.  There are a range of children’s savings plans with minimum investments from as little as £25 per month an affordable, tax-efficient way to build a savings pot for your little ones. If you start early and get time on your side, then as your children grow so can their savings and your peace of mind.

Full flexibility can be part of some plans, unlike the Junior ISA and Child Trust Fund (CTF), you can decide when you gift the money to the child and if you set the plan up in your name or the child’s. In these kinds of schemes you can also make withdrawals related to the child, ideal for childcare costs, school trip funds or even school fees. Some schemes have no investment limit, so you can maximise the tax allowances available to your children by investing up to the maximum limits in the like of Junior ISA and any additional contributions could then be invested into a Children’s Investment Plan.

These can also maximise your inheritance tax advantages - Grandparents who are saving for their grandchildren can reduce their inheritance tax (IHT) liability as sums gifted to the child are free of IHT if the donor survives for seven years after making the gift. It is good to talk through your plans with an IFA as with many investment plans there are risks as well as rewards.




Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Giving to the Grandchildren?

Making sure the right trust structure is in place to pass assets down the generations is one of the tasks Enable of Bishop’s Stortfords IFAs can help you with , it can mean significant tax savings and mean that you are using your assets effectively.





For many grandparents, supporting their grandchildren financially not only provides great peace of mind but also provides excellent tax planning opportunities. However, they may very wisely be concerned about gifting funds absolutely as the recipients might waste the money before they realise what an asset they have.

A discretionary trust could be considered this will not only enable the trustees to issue ad hoc payments to beneficiaries but also allows them to make absolute appointments to a bare trust for beneficiaries who are under 18. This means that any taxable gain will be assessed against the minor beneficiary, using either their income tax personal allowance or capital gains tax exemption. This ensures the tax liability does not fall on the trustees. As minors are less likely to have exceeded their tax limits this could result in significant savings for the trustees.

When it comes to passing on money in order to cover a specific debt, there are two common financial challenges for the under 30’s. The first of these is the burden of student debt; the second is the requirement for a sizable deposit to enable independent living.  Given the low impact student loan liabilities have on mortgage lending, having available funds to be used as a deposit for a first home may in many cases be a more worthwhile option for grandparents wishing to support their beneficiaries. Additionally this will ensure the asset remains within the family, rather than repaying a debt which has no chance of growth.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE