Spoil your grandkids - Save for their future

One of the greatest pleasures of reaching the age of 50 or 60 is the arrival of grandchildren; those darling little beings that you can simply spoil rotten.

Like children, grandchildren grow up and out of the clothing and toys that brought them such pleasure when they were little. Their wants and needs change and you have to come up with new and more complicated ways to spoil them.

So while they are little, why not buy one or two fewer toys and invest something towards their future? The GrannyNet website gives various suggestions for accomplishing this.

A good starting point is a Child Trust Fund (CTF), a long-term savings and investment plan. This government plan provides each child over 5 years old with an initial £250 in vouchers, with a further £250 when they reach 7. These vouchers are used to open the CTF account.

The opportunity here is that anybody can deposit funds up to £1,200 into the CTF. It is therefore a perfect opportunity to contribute to a good basis of funding for your grandchild’s future needs, whether this is education, a vehicle, books, or even an overseas trip.

CTF accounts are free from income or capital gains tax.

There are also other savings options to ensure that your favourite grandchildren continue to be spoiled rotten long after you have gone. These are also tax free.

The Tax Exempt Saving Plan (TESP) is for example offered by most building societies. These allow parents and grandparents to save up to £25 for each family member per month.

A Unit Trust for Children is a third option, by which grandparents can set up an account in their own name as trustees, while naming their grandchildren as beneficiaries.

Saving for your grandchildren is a wonderful opportunity to leave a legacy for those you care about. It will ensure that both your children and grandchildren remember you with fondness for as long as they live.

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