Learning how to effectively support your financial dependents is a main focus for many investors.
Therefore, it’s important to know how you can achieve this in the right way for your financial situation, and give your dependents security and support in their finances.
In this article, you’ll learn some of the ways you can support your financial dependents, and what you should consider when doing so.
Seek financial advice
One of the most effective ways to support your financial dependents is to seek financial advice from a modern wealth management service.
As with any type of financial journey, an expert adviser can help you take the right approach to your specific situation, and build your wealth in a way that’s right for you.
You can discuss every element of your situation with your adviser, including things like how many dependents you have, what their ages and needs are, and how you wish to support them.
As well as this, your adviser can conduct a full analysis of your income to help them create an accurate financial plan for supporting your dependents.
If you have any concerns or challenges you might be facing with this goal, your adviser can ensure you address this in your approach, to help you overcome these challenges and restore your financial confidence.
Tailored guidance like this from your adviser will give you the best chance of a successful financial outcome for you and your dependents.
Invest in Junior accounts
You can also consider investing in Junior accounts for your children, if these are the dependents you wish to support.
Examples of these are Junior Individual Savings Accounts (JISAs) and Junior General Investment Accounts (Junior GIAs).
When investing in a JISA account, you can contribute a certain amount of money each year that is sheltered from tax. This amount is determined by the JISA allowance for the tax year. For the 2023/2024 tax year, this is £9,000.
This money can only be accessed once your child turns 18.
Junior GIAs also allow you to save money for your child, except there is no maximum limit each tax year. However, the returns are taxable, so make sure you consider your child’s personal income allowance and capital gains allowance to ensure the money is received as tax-efficiently as possible.
These accounts can help you build your child’s wealth for when they become adults, and this can go towards things such as fees for their education, or to purchase a property.
Leave an inheritance
Supporting your financial dependents can also be done when you pass away, by leaving an inheritance.
This involves you leaving your estate to your loved ones – which can include your wealth and assets such as cash, investments, property, trusts, personal items, and more.
With this, you can know that your dependents will be financially supported even when you’re no longer there, since they’ll have your wealth handed down to them.
We highly recommend consulting a financial adviser for this, since Inheritance Tax can have an impact on your estate, depending on how you arrange it.
Using your adviser’s guidance, you can make sure your financial dependents receive your inheritance with as much of it sheltered from tax as possible.
If you’re looking for ways to support your financial dependents with your wealth, then speak to your modern wealth manager to explore some of the options we’ve mentioned in this article.
Please note, the value of your investments can go down as well as up.
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