The average Brit will fork out an eye-watering £611 on Christmas presents this year – up £42 from 2023.
Many of us want to make the festive season extra special by treating our loved ones. 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 Barbie 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 – packaging-free – alternative. The added good news is, you can order it online.. right up to the last minute!
Here’s how to pick the gift that will keep on giving.
1. A savings account
Is there something big that an important person in your life would love but is putting off saving up for? It could be a dream trip, a new car or a vintage didgeridoo. It might be beyond your budget but you could start them off on the right path by setting up a savings account. Comparison sites such as Raisin are offering interest rates of up to 4.8 per cent and have ethical options – such as building societies and Sharia-compliant banks – if you’d like to ensure your gift is good.
If you, or the person you’re gifting to, already has some savings to transfer, Raisin is offering Good With Money readers a FREE £100 cashback offer. Use the code ‘SAVINGS100’ until December 16, 2024 – you must fund your first savings account with £10,000 before December 31, 2024. Use this link to claim yours.
Including the cashback, this amount saved at an interest rate of 4.8 per cent over just one year (with no additional contributions) would turn into £10,584.80.
Other options we like include Tandem Bank, Triodos Bank and Nationwide Building Society, which all offer competitive rates while not harming the planet and/or society.
Top-paying ethical savings accounts
2. A Junior ISA (JISA)
A Junior ISA, or JISA, is a great 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 one from Simply EQ or 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 one of this year’s top toys, the Lego NASA Space Shuttle play set at £169.99, just think – if you invest that cost in a JISA every Christmas from when your child is age five until they are 18, they could have £37,103 (assuming a five per cent annual return), according to the investment firm Hargreaves Lansdown.
3. 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 ethical Lifetime ISAs (LISAs)
4. 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. You can personalise the card with their name and choose a picture to suit their personality. goHenry is currently offering a Paddington in Peru-themed card alongside its usual pets, superhero and sports themes.
Top 7 apps to help children manage money
5. 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 someone keen to help change the world for the better, crowdfunding platform Ethex is raising funds for community energy and ethical finance projects. And Energise Africa has several opportunities to invest in projects providing solar energy to homes in Africa. And Triodos Crowdfunding has an open offer in the Bristol Energy Co-operative.
Find out more in our Good Guide to the IFISA
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