The average Brit will fork out an eye-watering £548 on Christmas presents this year – up £72 from 2020.
Many of us are looking to make up for lost time spent with friends and family by making this festive season extra special. But when you consider that £42 million of unwanted Christmas presents are thrown into landfill each year, that’s a lot of money (and packaging) simply going to waste.
If you aren’t feeling inspired by the latest lego or LOL toy for the kids, or the usual scented candles, bath sets or chocolates for friends and family, then a financial gift could be the perfect alternative. The added good news is, you can order it online.. right up to the last minute!
Here’s how to pick the perfect gift that will keep on giving.
1. A Junior ISA (JISA)
A Junior ISA, or JISA, is a perfect way to help provide your child or grandchild with a secure financial future. Sure, it might not get them jumping for joy on Christmas morning, but we promise they’ll thank you when all the flashy plastic toys are long forgotten.
JISAs are tax-efficient savings accounts for children, who can only access the money in them when they reach 18.
While only parents or legal guardians can open one for their child, anyone can pay into it. JISAs were introduced in 2011 to encourage families to build a nest egg for their children that can be used to pay for big outlays such as university costs or buying a car or first home.
What’s more, if you choose a sustainable stocks and shares JISA, such as the one from The Big Exchange, then the money in it will be contributing to a better world for your child to live in.
If you’re still torn by this year’s top toy, the Lego Harry Potter Chamber of Secrets play set at £130, just think – if you invest that cost in a JISA every Christmas until your child is 18, they could have £3,467 (assuming a four per cent annual return), according to the investment firm AJ Bell.
See our top platforms for a green stocks and shares ISA
2. Lifetime ISA
Helping your older child to afford their first home makes for a pretty valuable Christmas present. The Lifetime ISA allows anyone aged between 18 and 39 to save up to £4,000 every tax year and receive a 25 per cent bonus from the government to help pay for a house deposit.
So, for every £4,000 saved, they’ll get a £1,000 bonus. Bear in mind that the money you put into a LISA will count towards their yearly £9,000 tax-free ISA allowance.
3. A debit card
Gifting your child their own debit card and account for Christmas can help them develop important financial skills for life. Apps such as goHenry, Rooster and Beanstalk give children as young as six the freedom to earn, spend and save their money in a fun and engaging way, under the supervision of their parents.
It’s also possible for friends and family to gift money onto the card along with a Christmas message. goHenry is currently offering a promotion for Good With Money readers of two months’ free with the code AFUKGWM2M, or one month free with a custom card using the code AFUKGWMCC. You can personalise the card with their name and choose a picture to suit their personality. For superhero fans, goHenry is also offering a free Sony Spiderman debit card.
Top 6 apps to help children manage money
And for adults,
4. An ethical Innovative Finance ISA
An ethical Innovative Financial ISA (IFISA) allows you to invest tax-free directly in organisations that are delivering positive change. Choosing a life-changing project/s to invest in on behalf of someone you care about makes this a thoughtful and personal gift. It will also hopefully bring them a financial return over time as well as a social and/or environmental one.
For a pet lover, the Triodos crowdfunding platform is offering an investment in the Animal Trust, which is working to help pets from lower-income families receive essential veterinary care.
For someone keen to help change the world for the better, crowdfunding platform Ethex is raising funds for EZ-Charge, a trailblazing organisation making electric vehicle ownership and charging easier in Oxfordshire. And Energise Africa has several opportunities to invest in projects providing solar energy to homes in Africa.
You could also look into a regular ISA with Clim8, which invests your money only in companies that are working to tackle climate change, or CIRCA5000.
Find out more in our Good Guide to the IFISA
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