Saving for foreign grandchild

Joanna_De

We would like to put aside some money every month for my 3-year-old granddaughter so that when she turns 18 she has a decent sum to start life with. However she lives in Germany and is a German citizen so we can't open a child's ISA for her here. Up to now we've been putting the money into an ISA in my name (grandma) but the interest rates are pitiful. Does anyone have any better ideas? So far we have accumulated a little over £2300. Thank you.

Reaper

I have no idea if Germany has a child equivalent, but her parents can probably tell you.

If not the simplest solution is probably to stick with an ISA but switch it to a stocks and shares one instead of a savings account. Over the 15 year term it ought to do better even with the occasional stock market crash.

As it will be in your name you might want to mention it in your will too to make sure it goes to her, just in case.

Biggles

There's absolutely no point in utilising an ISA, as her income is unlikely ever to reach the level of her personal tax allowance in any one year (which she will still have even though she's non-resident for tax purposes). The oft-quoted limit of £100 tax-free in a year for children is only for funds provided by parents, not other relatives.

That's even without going into the inadvisability of keeping her money in your name.

As you're looking long-term, stocks and shares would be far better then a savings account; for my grandchildren, I use F&C, who have a Children's Investment Plan (http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/childrens-investment-plan/). These enable you to keep the investment in your name with the child as beneficiary owner, till she reaches 18.

The share price of their Global Smaller Companies Trust has more than doubled in five years, though anything may happen in the next 10 or so.....

xylophone

You can invest for your grandchild in bare trust in an investment trust plan.

The Trustees must be UK residents but the beneficiary need not be.

https://thescottish.co.uk/wp/wp-content/uploads/2016/12/STOCKPLAN-A-Flying-Start-Brochure-PI-March-2016-1.pdf

Does the child beneficiary have to be a UK
resident?
It is possible for the child who is the beneficiary not to be a
UK resident and to live abroad. However, the donor(s) and
trustees must be UK residents.

Archi_Bald

Biggles wrote: »

There's absolutely no point in utilising an ISA, as her income is unlikely ever to reach the level of her personal tax allowance in any one year ................

As she is a non resident, new money cannot be put into an ISA into her name