Making the right investment decisions when you start a family.

Starting a family can be one of the most exciting times in your life. Becoming a parent can make huge changes to your way of life and cause a big shift in your personal priorities. As well as prompting you to think about investing in a bigger car or a larger home, it can also spark discussions about planning for the future, so you leave a legacy for your children.

At Grosvenor Wealth Management, we are used to advising both parents and grandparents on investments to give children the financial support they need. If you want to invest in your children’s – or grandchildren’s – future, there are plenty of options available to you. So, how do you make the right choices to ensure they have access to the funds they need at the right moment in their lives?

Getting your priorities right

If you are thinking of making investments for your children, it’s always a good idea to talk to an independent financial adviser (IFA) first. Our experts will sit down with you to look at your personal financial circumstances and help you to decide where your priorities lie.

You may want to leave funds so your children have the financial support they need, but there are other investment options you will also need to consider. For instance, do you have your own income protection, life insurance or pension policies? In many cases, as well as giving you financial protection, these policies will eventually also benefit your family. So, we may advise you to invest in these before putting money aside specifically for your children.

When should your children benefit?

If you already have relevant cover for yourself and still have funds that you want to invest on your children’s behalf, you will need to decide at what age they should receive the money. Talking to one of our expert IFAs at Grosvenor Wealth Management can help you to decide what the investment is for and the best way of investing it, so your child has the right financial support when they need it.

Some investment options such as Junior ISAs allow the beneficiary – your child – to take control of the account at the age of 16 and access the funds at 18. Junior ISAs replaced Child Trust Funds in 2011, as a more straightforward way of investing for your children’s future. If you’re considering investing a large sum of money so your child can support themselves through university, a Junior ISA may be a viable option. However, they’ll have complete control over what they do with the money once they turn 18. You may see it as an investment in their higher education, but they may have other ideas – for example, luxury holidays, a designer wardrobe or fast cars.

If you’re investing to support their higher education at 18, another option may be to invest the money in an ISA in your own name. You can still nominate the ISA as money to support your child, but you’ll retain control over how the funds are used.

On the other hand, you may want to invest to support their longer-term future, beyond education. In this case, we’ll help you to assess all the options available to you. This may even include investing in a pension in your child’s name. The drawback with this kind of investment is that they won’t be able to access it until they reach the age of 57. However, this allows the compound growth to accumulate over a number of years, which could leave them with a substantial legacy.

Talk to us

There are lots of issues to think about when you’re considering investing for your children’s future. Talk to one of our expert IFAs at Grosvenor Wealth Management and we’ll help you to balance all the options and make the right investments so you can leave a lasting legacy for your family.