Make these your New [Tax] Year Resolutions:
You don’t have to be a tax accountant to welcome 6th April with a cry of “Happy New Year!”
In a previous blog we talked about how to make sure your family didn’t miss out on the end of the tax year.
Children, like their parents and grandparents, have their own personal annual tax allowances. For a Junior ISA, the allowance is £9,000 a year. But even if you can’t save the full JISA allowance (and let’s face, very few of us can!), there are still plenty of ways you can build a nest egg for your children.
So as we start the new tax year, what ‘New Year Resolutions’ should you be making to help earn some easy wins for your children’s financial future?
Resolution 1: Start how you intend to continue
The most common way for families to save and invest for their children is to make a regular contribution. Setting aside as little as £25 each month and investing it in your child’s stocks and shares JISA could see it grow to be worth as much as a 5% deposit on their first house by the time they turn 18!
But what if your circumstances change? What happens if this is one New Year Resolution you just can’t keep?
Resolution 2: Be flexible and top-up
Even if regular contributions aren’t an option for you, and you want more flexibility to be able to make ad-hoc payments as and when you are able, you can still make a real difference to your child’s financial start in adult life.
Beanstalk lets you open an account without making a contribution and then top up when and if you want to.
This complete flexibility means you – and your extended family and friends – can all make one off top-up contributions via their own Beanstalk app. So no more birthday cash-in-cards that gets lost down the sofa, or cheques from gran and grandad that you never get round to paying in to the bank.
Resolution 3: Don’t give up coffee, round it up
How often do you buy a coffee each week? Did you know that by using neat savings tricks like roundups on your purchases you can turn your coffee habit into a life savings plan for your children?!
Rather than coming home and putting your loose change into their piggy bank, you can can do the same on your debit card spending and pay it direct into their Junior ISA.
With Beanstalk you are always in control – you can either turn on ‘auto round-up’, or go into the Beanstalk app on your phone and choose which payments you want to round-up.
Resolution 4: Take the free money!
Of course, if there’s one thing than that’s better than saving your money for your children, it’s collecting free money and saving that!
Beanstalk’s unique integration with KidStart means that any money you spend online with over 2,300 retailers will earn money that can be shared between the children. This means you could be saving more than £250 per year, based on a recent ONS spending survey.
Resolution 5: Make it a family affair
While only the child’s parent or legal guardian can open a Junior ISA, it doesn’t mean they’re the only ones who want to make contributions. However, unlike Beanstalk, not all providers make it easy for family and friends to pay money in.
Our experience is that grandparents in particular want to help out and the right JISA can simplify this.
So, if you’re a grandparent, you’ll need to ask the parent to open the JISA account – and with Beanstalk all they do then is invite you via the Beanstalk app and you can contribute in exactly the same variety of ways. You can make regular payments that can not only create a nest-egg for your grandchildren but also save on your own Inheritance Tax bill. You can gift them money for their birthday, and write a message so that they’ll know where the money came from. You can do round-ups and earn money on your shopping with KidStart. And you can do all this from within the Beanstalk app on your phone.
The New Year Resolutions you CAN keep!
Opening a Junior ISA can seem like a big commitment, especially if the provider insists that you have to make a regular contribution every month.
Beanstalk lets you open an account without making a contribution and then top up when and if you want to. And you can even contribute in multiple ways, including round up your purchases, a simple one-off / regular top-up process and free money back on your shopping.
Over half of Beanstalk JISAs use ad-hoc and flexible contributions such as top-ups, roundups and KidStart, so we know this uniquely flexible approach to family saving makes a real difference.
We all know New Year Resolutions can be hard to maintain – but we believe New Tax Year Resolutions should be easier to keep!