‘What if Christmas, he thought, doesn’t come from a store. What if Christmas, perhaps, means a little bit more” – Dr Seuss’ The Grinch.
A contribution towards a child’s future can start with £25. Here are five ways to give, with some practical checks before you part with your money.
Choosing a Christmas present for a child can involve plenty of guesswork. Will they like it? Have they already got it? Will it still interest them by January?
A financial gift could help pay for something they’re saving towards now, or give them a little more freedom when they’re older. And you don’t need hundreds of pounds to make a start.
Whether you have £25, £50 or £100 to give, the right home for that money depends on when the child might need it and who should look after it. You can also consider what it supports along the way.
Here are five options for Christmas 2026.
1. Add to a children’s savings account
For a child saving towards a bike, a school trip or their first laptop, a savings account is a straightforward place to put Christmas money.
An easy-access account allows withdrawals when needed. Regular savers can suit relatives who would like to contribute each month, although these may limit deposits and restrict withdrawals. Check the terms as well as the headline interest rate.
Ask the parent or guardian whether the child already has an account you can pay into. If you’re helping choose a new one, check who can manage it and when the child gains control.
For a greener gift, look at the provider’s lending policies and where deposits go. Mutual ownership can be a reason to consider a building society, but it doesn’t tell you everything about its environmental record.
One tax point for parents: if money you give your child earns more than £100 in interest in a tax year, all that interest is treated as yours for tax purposes. Whether tax is due depends on your allowances. This rule does not apply to gifts from grandparents or other relatives and friends, or to money in a Junior ISA.
2. Contribute to a Junior ISA
A Junior ISA can suit money intended for adulthood, perhaps to help with university, driving lessons or setting up a first home.
There are two types: cash Junior ISAs, which pay interest, and stocks and shares Junior ISAs, which hold investments. Interest and investment returns within the account are free from UK income tax and capital gains tax.
The total Junior ISA allowance is £9,000 for 2026/27, shared across both types. That is a ceiling, so there’s no need to feel your contribution has to come anywhere close.
Anyone can pay into an existing Junior ISA. Check with the parent or guardian first so that gifts from different relatives stay within the child’s allowance.
The money belongs to the child. They can take over managing the account at 16 and normally withdraw it from 18. You can explain what you hope the gift will help with, but the spending decision will ultimately be theirs.
If you’re saving for a child’s future, you may also want to consider the world they’ll grow up in. An ethical Junior ISA lets you bring those priorities together, provided its investments reflect what you care about. Older children could help explore the choices, from avoiding fossil fuels to supporting renewable energy. Check what the fund actually invests in, alongside its charges and risks.
If you choose investments, their value can fall as well as rise. Consider how long the money will be invested and how comfortable the family is with that risk. For an ethical Junior ISA, look beyond the name to the funds’ holdings, exclusions and charges.
3. Give Premium Bonds
Premium Bonds can add a little anticipation to a financial gift: each eligible £1 Bond goes into a monthly draw for tax-free prizes.
You can buy them for a child under 16 from £25. A nominated parent or guardian manages the Bonds until the child turns 16, so agree this with them before buying. NS&I also offers a gift card you can give the child.
The drawback is that Premium Bonds pay no interest. A child could hold them for years without winning, particularly with a small amount. Inflation can reduce what the original money will buy over time.
They may appeal to a family that enjoys checking for a prize, but they won’t provide the predictable interest of a savings account.
4. Start a pension for their much older self
A pension is a gift for the distant future. It could be worth considering if you’re happy for the money to stay invested for decades and the child’s nearer-term needs are covered.
A parent or legal guardian can set one up. For a child with no earnings, contributions of up to £2,880 a tax year can usually receive basic-rate tax relief, taking the total to £3,600.
You can contribute much less. A £100 payment would normally become £125 once tax relief is added.
The trade-off is access: the money is tied up until pension-access age, and the rules may change before today’s children reach it. Investments can also lose value.
Check charges carefully, especially for a small pot, and look at the actual investments if you want the gift to support environmental or social goals.
See our top ethical pension funds
5. Give cash with a savings goal
Sometimes a gift of money in a card is the most useful option. It lets the child choose what they want and practise deciding how much to spend or save.
You could put £25 towards a bike fund, offer to match an agreed amount they save themselves, or split a gift between spending money and longer-term savings.
Make it personal with a note explaining what you thought it could help them do. For a younger child, a picture of their savings goal can make the gift feel more tangible.
If you’re giving larger sums, consider inheritance tax rules. The annual exemption generally lets you give away £3,000 in total each tax year without it being added back to your estate for inheritance tax purposes. It is not a limit on how much you can give, and other exemptions may apply.
Make the gift work for the family
Before opening anything new, speak to the child’s parent or guardian. An existing account may already do the job, and they may have a more immediate use for the money.
For an ethical gift, ask two questions: does this account suit the child’s needs, and are you comfortable with what the provider does with the money? A green-sounding name alone won’t answer either.
Choose an amount you can comfortably afford. A £25 contribution towards something a child cares about can be a thoughtful present in its own right.
Tax information relates to the 2026/27 tax year and depends on individual circumstances. Rules can change. Investments can fall as well as rise in value.
See our top ethical Lifetime ISAs (LISAs)
