Grandparents’ back to school checklist

Start with your household budget and cash reserves 

The summer holidays are wonderful, but they can be spendy.  

Before you make any gifts or big decisions, give your day-to-day budget a quick health check. A good rule of thumb is to hold six to twelve months of essential spending in easy access cash, depending on your work status, health and how predictable your outgoings are. Anything above that buffer could be made to work harder. 

If you like a simple tool, the MoneyHelper Budget Planner is a free and reputable option. It breaks spending down into categories and highlights where small tweaks may free up cash for your goals.

Where to hold your rainy-day cash 

Keep emergency funds in easy access accounts, but be mindful of deposit protection limits. The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per eligible person, per authorised bank or building society, so spreading larger sums across different banking licences may make sense.  

Regulators have also signalled a planned increase in the deposit limit to £110,000 from 1 December 2025 to make things simpler around home moves and other one-off events. FSCS.

Cash interest rates have eased from the highs of last year as the Bank of England’s base rate now sits at 4.0% following the August decision. Savings rates of around 4% remain available (at the time of writing), so ensure your savings held in the right place.

Make your tax wrappers do the heavy lifting 

The goal now is simple: let your wrappers shelter more of the growth and keep withdrawals efficient. ISAs and pensions are the workhorses here. 

Pensions for you: withdrawals and flexibility (quick sense check) 

• Tax treatment: Money inside a defined contribution pension grows free of UK Income Tax and Capital Gains Tax. When you start taking benefits, you can usually take up to 25% of your pot as tax free cash (within the lump sum allowance, currently capped at £268,275), with the rest taxed as income. Money Helper and GOV.UK. 
• Do you have full flexibility? Check that your existing plan gives you the full suite of withdrawal options:
  • taking occasional lump sums direct from the pot (often called UFPLS) 
  • flexible retirement income (pension drawdown) 
  • an annuity for guaranteed income . You can also blend these. If your current policy does not support these options, or makes them difficult, a modern plan may be worth exploring before you start drawing.
• Keep an eye on charges: Higher ongoing charges and ad-hoc fees can erode the pot over time, especially once you begin withdrawals. Review platform fees, fund charges and any drawdown or transaction fees. 
• If you might contribute again: Certain taxable withdrawals (for example UFPLS or taking income in drawdown) trigger the Money Purchase Annual Allowance (MPAA), reducing how much you can pay back into pensions with tax relief to £10,000 a year. Your provider should issue a flexible access statement when this happens. GOV.UK 

If you are unsure whether your current plan offers full flexibility at sensible cost, this is exactly the kind of sense check we cover our retirement planning service in Cirencester. 

ISAs for you 

• Allowance: Up to £20,000 each year across your ISAs. Some providers offer flexible ISAs, allowing you to withdraw and replace money in the same tax year without losing allowance. GOV.UK+1 
• Why use them now: Interest, dividends and gains are tax free inside an ISA, which matters more with tighter dividend and savings allowances elsewhere. Read our article about why cash ISAs are still worth it for more information.

For grandchildren 

• Junior ISA (JISA): £9,000 per child, per tax year. A parent or guardian opens the account, but anyone (including grandparents) can contribute. Money belongs to the child and usually becomes accessible at age 18. GOV.UK 
• Junior pension (Junior SIPP): Family can pay up to £2,880 a year which the government tops up to £3,600 with basic-rate relief. A long-term gift that harnesses decades of compounding. Fidelity International

Key conditions  

• No minimum hours. Credits are given for each week or part-week you provided care — it does not need to be every week of the year. GOV.UK 
• Parent on Child Benefit. The child’s parent or main carer must be receiving Child Benefit, not need the NI credit themselves, and they must countersign your claim. You must have been under State Pension age when you provided the care and ordinarily resident in the UK. GOV.UK 
• When and how to claim. Apply after 31 October following the end of the tax year using form CA9176. Claims can be made for earlier years back to 2011/12 if you were eligible. Low Incomes Tax Reform Group 
   

Why it helps: each credited week can turn a non-qualifying year into a qualifying one, lifting your eventual State Pension and easing pressure on your investments. 

Help your adult children claim what they are due 

As you plan support for fees, uniforms or clubs, also nudge your children to use the help available to them: 

• Funded childcare in England: from the term after a child turns nine months, eligible working parents can access up to 30 hours a week until school age. Applications are via the official childcare portals. 
• Child Benefit rules: since 6 April 2024, the High Income Child Benefit Charge starts at £60,000 and removes the benefit fully by £80,000 of individual income. If they are caught by the charge, pension contributions or salary sacrifice can reduce “adjusted net income.” 
• Tax-Free Childcare: can be used alongside free hours if eligible, effectively boosting money set aside for childcare within scheme limits. 

School and university support: choosing the right vehicle 

If you want to help with school fees or future university costs, there are options beyond simply paying bills from your bank account. 

• Use ISAs for time-bound goals: For fees due within five years, Cash ISAs can be a holding pen. For longer horizons, Stocks and Shares ISAs open up growth potential, with the option to de-risk as the deadline approaches. Interactive Investor 
• Use JISAs for eighteen-plus goals: Money in a JISA becomes the young adult’s at age 18, with the option to continue sheltered growth in an adult ISA thereafter. A conversation about purpose and values as that birthday approaches is time well spent.
• Consider trusts for control: If you want tighter control over how and when funds are used, a trust may help, but it comes with extra complexity, rules and reporting. That is a planning discussion rather than a one-size-fits-all solution. 

A quick and simple grandparents’ autumn checklist 

• Rebuild the buffer after summer and review where cash sits relative to FSCS limits. 
• Top up wrappers: use ISA and, where relevant, pension allowances early so money works for longer. 
• Grandchildren: agree a contribution plan for JISAs or Junior SIPPs and record any regular gifts from income.  
• Claim NI credits if you provide childcare. Put a reminder in the diary to complete form CA9176 after 31 October for the prior tax year. 
• Point your children to funded childcare and Child Benefit rules so the family claims what it can.  
• Check your State Pension and consider voluntary NI only if it clearly improves outcomes. 
• Book a review of drawdown, tax and investment positioning before year-end to avoid a March scramble. 

Why clients in the Cotswolds choose Abode Financial Planning

We are an independent, locally rooted firm in Cirencester,. Our focus is retirement planning, pensions, investments, wealth management and financial planning for families.

Our job is to help you enjoy life today without sacrificing tomorrow. For many grandparents that means designing a plan that funds purposeful gifts to the next generation, whilst protecting your own independence and choices later in life. 

If you would like a second pair of eyes on your plan this autumn, we would love to help.