FINANCIALLY FABULOUS
Think gifting money lacks creativity? Molly Greeves shares smart ways to make the ones you love a little richer
How often do you open a birthday card to find cash inside? Many of us can remember the delight of a crisp five-pound note dropping out and into our hands as a child. But as an adult, receiving or gifting money is far more taboo, often fraught with awkwardness or deemed impersonal.
Yet when times are tough financially, money can be a gift that’s especially welcome. Whether it’s vouchers for a favourite store or restaurant, or actual money, giving someone close to you the opportunity to treat themselves to something they might not otherwise be able to afford can be the best gift. ‘When we’re stressed about money, the first items we cut off the list tend to be the “small pleasures” that make a significant contribution to our day-to-day happiness,’ says money psychotherapist Vicky Reynal. ‘Gifting someone money can allow them to indulge in something they’ve deprived themselves of, with less guilt.’
As well as bringing joy in the here and now, gifts of money can also be given in a way that contributes to the longer-term financial wellbeing of someone you care about. Here, we share some of the more imaginative ways to share a cash gift…
THE FUTURE’S BRIGHT
Putting money into a Junior ISA (JISA) for a small person in your life is a lovely way to welcome a baby into the world or mark a special occasion. There are two main types of Junior ISAs: a cash JISA, which earns a set interest rate, and an investment JISA, which puts your money to work in the stock market. A JISA works in the same way as an adult ISA, except you can pay in up to £9,000 a year tax-free, and the £9,000 annual allowance can be split across the two types of account. The recipient will be able to take control of the account when they turn 16, but won’t be able to withdraw the money until they’re 18. Once the JISA is set up by the child’s parent or guardian, anyone can pay into it.
Alternatively, putting money into a Junior Self-Invested Personal Pension (Junior SIPP) is another way to save for a child’s future. With tax relief on your contributions, for every £2,880 you contribute a year, £720 will be topped up by the Government. This means that if you were to put in £25 a month until the child turns 18, their Junior SIPP could be worth more than £35,000 by the time they reach 60*. As with a JISA, the child’s parent or guardian will need to set up the Junior SIPP first.
It’s also possible to pay into an adult’s pension, says Shona Lowe, financial planning expert at abrdn. ‘This is called a third party pension contribution and is normally made by an individual on behalf of a family member. To make a third party pension contribution, yo
