Easter, for many families, means egg hunts, over-excited grandchildren and the quiet realisation that you probably bought far too much chocolate. Again.
While chocolate eggs are delightful (briefly), they tend to disappear rather quickly. But what if one of the eggs you gave this Easter actually lasted a little longer… say, 18 years or more?
Instead of adding another chocolate bunny to the pile, some families choose to give something slightly different – a financial “nest egg” that can grow alongside the child. Not quite as colourful as foil-wrapped chocolate, perhaps, but potentially far more valuable by the time they reach adulthood.
Here are three ways you might start building one.
A simple savings account can quietly grow over time
One of the most straightforward ways to start building savings for a child or grandchild is simply to open a designated savings or investment account in your own name, earmarked for their future.
While the Channel Islands don’t offer Junior ISAs in the same way the UK does, many banks and investment providers still allow you to set aside money specifically for a child. The structure is simple: you contribute regularly, invest the funds appropriately and decide when the time is right to pass the money across.
The real advantage here is flexibility.
You control how the money is invested and when it’s gifted. That could be when they turn 18, when they go to university or perhaps when they want help with a first home deposit.
And as ever, time can make a remarkable difference.
Even modest contributions made consistently over many years can grow surprisingly large thanks to compound returns. What begins as a small monthly contribution when they’re young could become a meaningful pot by the time they reach adulthood.
Kickstart their retirement by opening a personal pension
Opening a pension for a child may feel faintly ridiculous at first.
While retirement probably isn’t high on the list of priorities for someone whose main concern is where you’ve hidden the easter eggs in the garden, starting a pension on your child’s behalf could boost their retirement options significantly.
One option is a junior self-invested personal pension (Junior SIPP), which, much like its adult counterpart, benefits from pension tax relief on contributions up to £2,880 – the government adds a further 20%, raising the maximum available pension contributions to £3,600 each tax year.
If you contributed the maximum amount to the child’s Junior SIPP every year from birth until they turned 18, it could build a pension pot worth around £420,000 by age 60.
This could help them retire earlier and live a comfortable lifestyle. Plus, it could reduce the burden of pension contributions during their working life.
It's important to note that they’ll only be able to access this pension once they turn 57 (possibly even later), which could restrict their financial freedom until they retire.
Remember, pensions are investments, so there is inherent risk involved, and their value can go up or down.
Premium Bonds offer the chance to win up to £1 million
A more exciting option for your loved one’s nest egg could be a Premium Bond.
You can gift a Premium Bond to anyone under 16 and you can contribute to them regularly.
What makes Premium Bonds different is that they include regular prize draws with a chance to win between £25 and £1 million in tax-free cash.
Premium Bonds are an investment product available from National Savings and Investments (NS&I), which is Treasury-backed and 100% secure.
However, rewards entirely rely on winning prize draws. If you don’t win at all, your returns solely rely on the pot’s interest rates, which don’t tend to outpace inflation and could end up losing you money.
Chocolate disappears. Compound interest doesn’t
None of this is to suggest you should cancel Easter altogether and replace it with spreadsheets and financial planning. In many households, that would most certainly result in a riot!
However, alongside the chocolate eggs, starting a small financial gift can be a thoughtful way to help them in the future. The main benefit is that a well-planned nest egg could still be quietly growing for many years to come (far outlasting that chocolate!).