The birth of Prince George of Cambridge has sent the world into a baby frenzy and given the public a much needed excuse for a party. There is no doubt that the Royal Baby of the Duke and Duchess of Cambridge is set for greatness, with all the benefits and responsibilities that come with his birthright, but what of the other 1,999 babies that now share a birthday with the little Prince?
On average, 2,000 babies are born a day in England and Wales, and from the moment that the child is born a parents instinct to protect them is kick-started into action. The main concern for any parent is the health and safety of their baby, but what about the long term financial security of their little bundle of joy? If Prince George was just George, and the Duke and Duchess of Cambridge were just William and Kate, what would they do to ensure little George had a bright and secure future?
There are a few options open to them that William and Kate could decide to do. They could look at a Junior ISA for example; however they may have their reservations about this. The money they would invest is tied up until George is 18, but the question as to whether Wills & Kate would want him to have access to a large lump of money at 18 is a valid one. Would George use it to fund a charity trip to Kenya, or go on a lads holiday to Vegas and play billiards? However, Junior ISAs would allow tax free savings, but everyone, George included, has a personal allowance, and provided income is below this there will be no tax to pay on the income anyway…depending on how generous Wills is with the cheque book. For this reason, William and Kate may prefer other investment bonds which could be used to tie up money past the tender age of 18, or which give better interest rates. George would then have to wait a few years before some much needed R&R with Uncle Harry.
Another option that William and Kate could consider is NSI children’s bonds and premium bonds. If daddy William and mummy Kate give money to George, and the income arising from this money exceeds £100, then they will be liable to tax on this income. If they save with a Junior ISA this rule will not apply. There are however, no issues if the money came from Grandpa Charles and Nana Camilla, or even Uncle Harry.
Alternatively, William and Kate could save up to £3,600 per year into a stakeholder pension or SIP (self invested pension) for George, which he won’t be able to access until he’s 55 – just in time to invest in a top quality polo horse with a comfy saddle then.
Finally, Grandpa Charles could consider using his £3,000 annual inheritance tax allowance to provide for his Grandson’s future. Charles could also invest in premium bonds on behalf of George, giving him some control over the gift.
The question of financial security for the future King of England is probably a moot one, but for the other 1,999 babies it is an important one to consider.