The importance of giving children a financial head start in life
It is natural for the older generation to want to do all they can for the younger, and money may not be the whole solution, but it can certainly be a big part of that help.
It’s never too late but it’s certainly never too early to start investing for your loved ones. If you are considering this, a stock market investment (such as an abrdn Investment Trust) may prove particularly rewarding. If you’re wanting to help a loved one with university fees or a downpayment on a first home, starting to invest in the early years of their life means potentially around 20 years’ worth of investing. That should be long enough to ride out the ups and downs associated with equity investments and deliver a decent return.
Investment trusts: a simple way to invest in stock markets
An investment trust is a simple and cost-effective way of investing for children. Their features include:
- Wide spread of risk: an investment trust can invest in lots of different companies’ shares, providing instant risk diversification
- Access to a wide range of global investments and risk profiles
- Managed by a professional fund manager
- Easy trading: leading investment platforms (such as interactive investor) allow you to buy investment trusts cost-effectively on behalf of children
- Flexibility: you can make lump sum investments and/or drip feed regular savings into the investment trust(s) you have chosen
- Dividends can be reinvested in further shares which can significantly enhance returns over the long term
What options do I have
Investing for children need not be just for your own children. Grandparents, godparents and other friends and family members can all contribute too. A Junior Individual Savings Account (Junior ISA) may be your first port of call, as there are tax benefits, but you can also invest on a child’s behalf in your own name. Below we consider the pros and cons of each route:
Tax issues
It is important to plan financial help for children in the most tax-efficient way. If you plan to invest for a child and have any questions about income tax, capital gains tax or inheritance tax and your own personal circumstances, you should seek independent financial advice.
Three steps to get started
abrdn investment trusts offer you an extensive range of carefully crafted investment portfolios - each built on getting to know our investment universe through intensive first-hand research and engagement.
Investing in our trusts is easy:
- Choose your investment trust(s) based on your needs. Use our simple Trust Finder tool to match our trusts to your preferences.
- Buy your investment trust(s) via the third-party platform of your choice. For tax efficiency, our trusts can be held in a Junior ISA. You can access a range of platforms featuring our investment trusts via the links below.
Platforms featuring abrdn investment trusts
A range of leading third-party platforms and share-dealing services let you buy and sell our investment trusts. Please note that many of these platforms operate on an ‘execution-only’ basis. This means they can carry out your instruction to buy or sell a particular investment trust. But they may not be able to advise on suitable investments for you. If you require advice, please speak to a qualified financial adviser.