Generational Wealth | Grandparents Perspective

Posted: 19th March 2021 Key

When we reach a certain age, it’s common to feel we have less control over what we can do to positively impact our family’s financial security. With “working for longer” probably not being an option, grandparents’ opportunities to support their families turn from being an active role to more of a passive one; where money needs to be invested smartly over time.

Too often we hear grandparents speak with regret about how they have managed their finances. Those who started late to plan their pension, save for the future and build wealth to pass onto the next generation would, with hindsight, all go back to take it more seriously if they could.

While a portal in time is not a viable option today, grandparents still have opportunities to build wealth for themselves, their children, and grandchildren – even when they’re living off their pensions or investments. Grandparents can also have a really important part to play in educating their children and grandchildren about the importance of considering their financial situation and future plans as early as possible. Learn more about Pensions Debunked

Investing in the Family Legacy

No matter how little or how much you have to pass on or invest, financial planning is critical. Understanding inheritance tax, long-term investment portfolios and the financial possibilities of trusts for children or grandchildren, can all make a significant impact over time.

Planning Around Inheritance Tax

If you knew that your inheritance was going to be reduced by tax, what would you do differently? These are important questions that grandparents should be asking themselves, and there are ways to plan around them.

Most grandparents plan to pass on wealth through their assets when they pass on, but many may not be aware of what implications that inheritance tax could have on the amount that is actually able to be inherited.

While the saying remains true, “the only certainty in life is death and taxes”, that doesn’t mean that you can’t plan as effectively as possible. Learn more about inheritance tax planning.

Investing in a JISA

Investing in a Junior ISA (JISA) for a grandchild is a direct investment into future generations. A JISA account started when children are young can blossom and be used towards covering university costs, first cars, or more advantageous starts to young adult life.

A JISA is a tax-efficient savings account which parents and grandparents can invest in and watch their savings appreciate in value to become a powerful nest egg for the future.

As the account belongs to the “junior”, there are great tax benefits, making it a smarter way to save for future generations. What’s more, the JISA account is inaccessible until the child turns 18, keeping it safe from impulsive spending.

Learn more about the ins and outs of JISA’s.

Building Wealth with a long-term Investment Portfolio

Another way to invest for inter-generational wealth is to set up a long-term investment portfolio that will appreciate in value.

Setting up an investment portfolio is one way to regain control of your potential to continue to grow wealth. While work will (thankfully) come to a close, that doesn’t mean that earning potential has to stop. An investment portfolio can go a long way in enabling grandparents to contribute financially and develop a portfolio that can continue to appreciate long after they’ve gone.

Getting Started

The financial planning waters can be hard to navigate, and they’re ever-changing. Thankfully, there are experts available to help you plan for the future of your family.

Wise Investment is an independent, employee-owned wealth management and financial planning business. We don’t just help customers to set up their portfolios or invest in their children’s JISAs. We help grandparents, parents, and individuals plan for their future, considering tax impacts and the smartest places to get the best returns.

Contact Wise Investment today to see just how much you can help your family, no matter your life stage.

Important information

The above information is for educational purposes only and is not a personal recommendation or investment advice. If you’re unsure about the suitability of a particular investment, you should speak to an authorised financial adviser. As you probably know, the value of investments and the income from them can go down as well as up, so you might not get back the amount you invest.

We’ve made every effort to ensure the information above is accurate. Content is based on our understanding of current law and practice at the time of writing, which could alter as a result of future legislation. ISA limits are subject to change and the favourable tax treatment given to ISAs may not be maintained in the future. Tax treatment may depend on your individual circumstances. This article is aimed at UK residents.

Wise Investment is authorised and regulated by the Financial Conduct Authority. Our FCA number is 230553. Registered Office: The Great Barn, Chalford Park Barns, Oxford Road, Chipping Norton, Oxfordshire, OX7 5QR. Registered in England 4970458.



Jo Radcliffe