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In this section

Your child's received an inheritance. Now what?
Important information - the value of investments can go down as well as up so you may not get back what you invest. Tax treatment depends on personal circumstances and all tax rules may change in the future. You cannot normally access money in a SIPP/Junior SIPP until age 55 (57 from 2028). Withdrawals from a Junior ISA will not be possible until the child reaches age 18. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
Your child's inheritance and you
If you’re reading this, it’s likely that your child has received an inheritance, or is about to. If that's the case, you'll probably have questions about what happens next and how you can use your child’s inheritance to give them a financial head start in life. We appreciate that this may be a sensitive time for you and your child. Take time to think through your options. We're then here if you need us.
If you're a trustee responsible for your child's inheritance until they take control and would like to talk to someone about their inheritance, financial advice might be for you. If you already know you want to invest it for their future, learn more about our Junior ISA and Junior Self-Invested Personal Pension accounts. They're both tax-efficient ways to build a better financial future for your child and we don't charge a service fee on junior accounts. Call us on 0800 058 4443.
What happens when your child inherits?
While a child can be a named beneficiary of an estate, the will determines the age at which they'll actually inherit. The minimum age they'll be able to take legal ownership of an inheritance is 18 years old (or 16 in Scotland). But the terms of the will could stipulate any age - whether that's 21, 25, 40 years or beyond. So, until your child actually inherits, the investments, property, cash or other assets due to them will be held in trust by the trustees named in the will.
The testator (the person making the will), can include a letter of wishes to sit alongside their will. This letter might well list out how an estate can be used for the benefit of the minor while held in trust - especially if the testator is the parent. It’s possible in certain circumstances for the inheritance to be paid to the parent of the minor but is dependent on the terms of the will and/or statute.
Depending on the terms laid out in the will, it may be a while - years, perhaps even decades - before your child legally has access to their inheritance. If you have access to your child's inheritance, you'll probably want to make sure it's working as hard as it can for them - so that the value of their inheritance won't depreciate over time. One way of giving it the potential to grow over time, especially if your child is still only young, is to invest it. Of course, the value of their investments could fall too, but that's something you need to weigh up before making any decisions.
Things to ask yourself
If you've been appointed as a trustee to your child's inheritance, you may want to ensure it works as hard as it can for your child until they inherit. Any decisions you make will need to respect the terms outlined in the will. And if a co-trustee has been appointed, you'll need to make decisions for your child's inheritance together. If the terms to your child's inheritance are unconditional, here are some things you might like to consider.
- What might the inheritance be used for? Could it be put towards university fees, a deposit towards a first property or perhaps their retirement if you feel you can financially support them earlier in their life?
- How much do you think you should put away? Is your child likely to have financial needs that need to be met as a minor? You may want to keep some cash set aside for these before deciding what to do with the rest.
- If you think your child is unlikely to need the money until much later in life, you might consider investing some - or all - of their inheritance. In which case, what age would you like your child to have access to their investments? Some accounts, like a junior ISA, will allow your child to access their inheritance at 18. While a junior self-invested personal pension is for their retirement. The earliest they'll be able to access their junior SIPP is 57 under the new rules which come into effect in 2028, although control of the account passes to them at 18.
If your child's inheritance is sizeable and you're thinking of investing it, you might like to speak to a financial adviser. They'll be able to give you a personal recommendation and may bring you peace of mind.
How we can help
If you're the trustee or co-trustee of your child's inheritance and can decide what to do with your child's inheritance (as outlined in the will) until they have control of it, you can find out about our Junior ISA and Junior SIPP accounts - and how they differ - below. The good news is, we don't charge a service fee on junior accounts.
At a glance | Junior ISA | Junior SIPP |
---|---|---|
Tax efficient |
Yes |
Yes |
20% tax relief |
No |
Yes |
Yearly allowance |
£9,000 |
£2,880 from the child and £720 in tax relief making a total of £3,6001 |
Who the registered contact can be |
Parent or guardian |
Parent or guardian |
Age your child gets control |
18 |
18 |
Age your child can access money |
18 |
Normally from 55 (57 from 2028)2 |
Who is able to open an account |
Parent or guardian |
Parent or guardian |
Maximum age of child you can open an account for |
17 or under |
17 or under |
Minimum regular savings |
£25 per month |
£20 per month |
Minimum lump sum investment |
£100 |
£800 |
1for children who aren’t earning.
2Withdrawals could be subject to income tax and tax rules could change in the future. The minimum age that most customers can access their pension benefits is age 55 (57 from 2028).
A quick note about Child Trust Funds: Child Trust Funds were available to children born between 1 September 2002 and 2 January 2011. However, these have now been replaced by the Junior ISA. As both saving schemes carry tax advantages, it’s not possible to have both. We cannot open a Junior ISA for anyone with a Child Trust Fund.
What next?
What to do with an inheritance
All inheritance topics
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
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