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Invest for children with abrdn Investment Trusts

The importance of giving children a financial head start in life

It is natural for the older generation to want to do all they can for the younger, and money may not be the whole solution, but it can certainly be a big part of that help.

It’s never too late but it’s certainly never too early to start investing for your loved ones. If you are considering this, a stock market investment (such as an abrdn Investment Trust) may prove particularly rewarding. If you’re wanting to help a loved one with university fees or a downpayment on a first home, starting to invest in the early years of their life means potentially around 20 years’ worth of investing. That should be long enough to ride out the ups and downs associated with equity investments and deliver a decent return.

Investment trusts: a simple way to invest in stock markets

An investment trust is a simple and cost-effective way of investing for children. Their features include:

  • Wide spread of risk: an investment trust can invest in lots of different companies’ shares, providing instant risk diversification
  • Access to a wide range of global investments and risk profiles
  • Managed by a professional fund manager
  • Easy trading: leading investment platforms (such as interactive investor) allow you to buy investment trusts cost-effectively on behalf of children
  • Flexibility: you can make lump sum investments and/or drip feed regular savings into the investment trust(s) you have chosen
  • Dividends can be reinvested in further shares which can significantly enhance returns over the long term

What options do I have

Investing for children need not be just for your own children. Grandparents, godparents and other friends and family members can all contribute too. A Junior Individual Savings Account (Junior ISA) may be your first port of call, as there are tax benefits, but you can also invest on a child’s behalf in your own name. Below we consider the pros and cons of each route:

Junior ISA

A JISA is a tax-efficient way to save and invest for a child. Anyone can pay into a Junior ISA but it must be opened by a parent or adult with parental responsibility. Up to £9,000 can be paid into a Junior ISA (2024/25 tax year) each year. Once the child reaches age 18 the Junior ISA matures into an ISA and they can access their money at that point. Cash cannot be withdrawn before then.

There are two types of Junior ISA: Cash and Stocks & Shares. The latter gives access to equity investments such as abrdn Investment Trusts). For a Cash ISA there’s no tax to pay on any interest received. For a Stocks & Shares Junior ISA there’s no tax to pay on capital gains or dividends.

Minimum subscription levels are usually very accessible. For the interactive investor Junior ISA you can invest from just £100 lump sum or £25 monthly.

Any subscriptions paid to a Junior ISA are considered a gift to the child and cannot be returned once gifted.

Investing in your own name

If you want a more flexible arrangement than a Junior ISA, you can invest on behalf of a child in your own name through a general investment account. However, be aware that these do not have the same tax advantages as ISAs. You will pay tax on any gains, dividends, and interest on this portion of your portfolio. However, this is a very straightforward and flexible way of investing for children with no annual maximum investment limit. The assets remain part of your estate and you have control over when and how the child will receive the money.

Alternatively, you may wish to explore setting up what is known as a ‘bare trust’ or a more formal trust, in which case you can make use of a child’s personal allowance (as with adults, children aged under 18 are entitled to a tax-free personal allowance each year. This is £12,570 in the 2024/25 tax year). The account can stay open beyond the child's 18th birthday although the money in the account legally belongs to the child. You should seek professional advice on whether this is a viable route for you.

Tax issues

It is important to plan financial help for children in the most tax-efficient way. If you plan to invest for a child and have any questions about income tax, capital gains tax or inheritance tax and your own personal circumstances, you should seek independent financial advice.

Three steps to get started

abrdn investment trusts offer you an extensive range of carefully crafted investment portfolios - each built on getting to know our investment universe through intensive first-hand research and engagement.


Investing in our trusts is easy:

  • Choose your investment trust(s) based on your needs. Use our simple Trust Finder tool to match our trusts to your preferences.
  • Buy your investment trust(s) via the third-party platform of your choice. For tax efficiency, our trusts can be held in a Junior ISA. You can access a range of platforms featuring our investment trusts via the links below.
  • Stay informed. Register to receive updates on abrdn investment trusts direct to your inbox. You can also follow us on LinkedIn or X for the latest trust news.
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Platforms featuring abrdn investment trusts

A range of leading third-party platforms and share-dealing services let you buy and sell our investment trusts. Please note that many of these platforms operate on an ‘execution-only’ basis. This means they can carry out your instruction to buy or sell a particular investment trust. But they may not be able to advise on suitable investments for you. If you require advice, please speak to a qualified financial adviser.

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