This article appears as part of the Money HQ newsletter.


Putting your family first

When you’re in your 40s and 50s, you can sometimes feel like you’re financing three generations, not just one. Many people find themselves caught in the ‘sandwich’ generation, responsible for both their children’s future financial wellbeing and the wellbeing of their parents in later life.

At the same time, you may also be thinking about making the most of your investments so that you’ve got enough money to enjoy your own retirement.

“Your priorities change over time, especially when you’re working out how to balance your own financial wellbeing with that of your children’s in the future,” says Tony Clark, Senior Propositions Manager at St. James's Place. “Our mindset about money is changing, just as our attitude to work and careers is changing. Our personal goals become family goals."

“Money is moving up, down and across generations. Nowadays, people are thinking ‘how can I make the most of my money for me and my family?’" says Tony. “Where we can add real value and peace of mind is helping make sure that it’s happening in the most tax-efficient and future-proof way.”

It can feel like you’re spinning plates. In this article, we’ll look at the practical ways you can give your children a head start this tax year.

Are you using all your tax allowances?

With so many calls on your money, it makes sense to take advantage of the tax allowances that are right in front of you.

Even the ones we’re most familiar with, such as the annual £20,000 ISA subscription allowance. ISAs are a simple and tax-friendly way to get started if you haven’t already. Cash ISAs make a good, tax-efficient home for rainy-day funds, and Stocks & Shares ISAs can provide the potential for growth from your investments to help achieve your longer-term ambitions, from buying a new home to affording a great education for your children.

Tax-efficient savings could help your loved ones with long-term care costs, taking a weight off their mind, and yours.

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Giving your children a tax break too

When it comes to giving your children a head start, opening a Junior ISA (JISA) for them means they can build up a tax-efficient pot of money. The maximum you can pay into a JISA is £9,000 in any tax year. They can either access that at 18, or roll it over into a standard ISA, and continue to save. It’s a great way to help them achieve their future ambitions, whether that’s getting their first mortgage or travelling abroad.

Plus, it gets them into the habit of saving regularly, building their own financial resilience and money management skills.

Junior pensions and pension tax relief

Many of us don’t start to pay attention to our pensions until we are well-established in our careers. However, any parent or legal guardian can open a Junior Pension for their children as soon as they’re born. You can put up to £2,880 a year into their pension, and the 20% pension tax relief bumps this up to £3,600.

While this might not be front-of-mind when you’ve got a young family, the tax benefits on pensions mean that even quite small amounts paid in regularly every month can mean your children will be able to do things they’ll dream of doing, when they reach your age, and older.

“Giving them a leg up in their adult life as well as setting something up for later in their lives can really open up their choices when they begin to approach retirement,” says Tony.

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How to pay less Capital Gains Tax

People often forget about the annual Capital Gains Tax (CGT) exemption too, which can also make a big difference to the amount of money you have to invest, save, or pass on to your family. CGT is the tax that you pay on the profits if you sell a property or asset that has increased in value.

The current 2023/24 Tax Year CGT exemption means that the first £6,000 of profit is tax-free. This exemption will drop to £3,000 in 2024/25, so if you are thinking of selling assets or investments to pass money up or down your family, it may be a good time to discuss your plans with your financial adviser.

The amount of CGT you’ll pay depends on your tax band and the asset you’ve made a gain on, and it’s well worth taking financial advice on this, as it is a complex area of tax planning. But a very useful one, especially as your assets tend to build up as you get older.

We spend much of our lives earning, saving and investing. But just as important is knowing how and when to start spending your money, or using it to help other members of the family. You’ll have the reward of seeing your money help those you love – and know that you’ll be lowering your eventual IHT bill.

That’s a double bonus and can help you keep more money in your family.

Taking financial advice can keep you ahead of the game

Most of the tax allowances and tax reliefs you can claim are on a use-it-or-lose-it basis, so planning ahead is important, especially as tax-year end approaches in April.

“If you’re thinking about moving money around, or splitting your money, have a chat with your adviser,” says Tony. “You might be thinking about using both a Junior ISA and a children’s pension to give your children a really good start in life.”


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“Talking your options through with an expert who understands your financial goals as a family will help you feel confident about the choices you’re making for your children.”

“It creates financial wellbeing for your whole family. That’s the best investment you can make.”