Smart Planning for Children with LGT Vestra
Last Updated on : 1st July 2016

LGT Vestra LogoI guess we know intuitively that it is important to get children from a young age to understand the meaning of money and how it works. Not only does it make them appreciate that it “does not grow on trees” but may just help them over the line in some future daunting maths exam. But where do you start? What type of account should you think about opening? Do you prefer the old fashioned passbook or to go online? How do you find the best rates for your children’s savings? How do you invest for the longer term outside of cash? How does the tax work?

There are some great websites that you can have a look at to get things going. A particular favourite of mine can be found at which offers some useful tips for parents on how to get children saving. It covers a lot of territory, from how interest rates work, to the different types of accounts available, to the best rates payable. The site is regularly updated and gives parents the “best buys” for accounts specifically designed for children, how they work and whether they come with “strings attached”. It also makes the vital point about how important it is to get children actively involved in making the decision as to which account they should have and suggests putting “your child in charge of checking the interest rate every month to see if it’s still paying a decent rate”. Remember if it is not then move it. Same goes for us parents. It is our money not the banks!

LGT Vestra savings children piggy bankOnline accounts via an “App” can also be a great way for older children in particular to engage with money. “Go Henry” is a tool aimed at 8 to 18-year-olds, and allows parents to set up an account and link this to an account for their child. The child’s account comes with a prepaid Visa debit card. Another option to have a look at is “Osper” which is backed by MasterCard, and can be used to withdraw cash at an ATM or make purchases online. Your child can also see when their card has been loaded and when their next allowance is due. Other online options are also available. The name of the game is parental control (the comforting feeling that our nearest and dearest cannot just splash out on the next must have PS4/Ibox game or App) but at the same time giving them the feeling of independence and responsibility for their money and savings.

Finally a bit on tax! Do children pay tax? Answer yes but it is very rare which means they can normally use their tax allowances. For the tax year 2016/17 this means their £11,000 personal allowance, £5,000 dividend allowance and £1,000 personal savings allowance. That is £17,000 in total before a penny of tax needs to be paid. Further posts will look at tax and investment planning in more detail and especially explore how school and university fees can be planned for with help from the taxman. Some simple steps can make a big difference.

By David Lane, Partner and Technical Director LGT Vestra.



For more information please contact:
William Townrow, Partner LGT Vestra.

020 3207 8384


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