5 Best Investments for Your Grandchildren in the UK (2026 Guide)

Ruby Layram 2nd Feb 2026 No Comments

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If you’re a grandparent (or a very forward-thinking parent), you might be wondering: What’s the best way to invest for my grandchildren’s future?

Whether it’s for university, a first home, or simply giving them a financial head start, investing early can make a huge difference thanks to the magic of compound interest.

The key is choosing investments that:

Can grow over the long term
Are tax-efficient
Suit a child’s long investment horizon
Balance growth with sensible risk

In this guide, we reveal the 5 best investments for grandchildren in the UK in 2026, explain how each works, and highlight the risks to be aware of before you invest.

You might also like: How to gift money to grandchildren

1. Junior ISA (JISA): The Best All-Round Investment for Grandchildren

If you only choose one option, make it a Junior ISA.

A Junior ISA is a tax-free savings or investment account for children under 18. Once opened, anyone can contribute- parents, grandparents, aunts, uncles and friends.

Why Junior ISAs are so great:

Tax-free growth (no income tax or capital gains tax)
Long time horizon (up to 18 years)
Compound interest works its magic
Money becomes the child’s at 18

There are two types:

Cash Junior ISA: safer, but lower returns
Stocks & Shares Junior ISA: higher growth potential over the long term

For grandchildren with 10–18 years ahead of them, a Stocks & Shares Junior ISA is often the better choice.

Example:

Invest £50 per month from birth with a 6% annual return and your grandchild could have over £18,000 by age 18.

Things to note:

The child controls the money at 18
Annual allowance for 2026 is expected to remain around £9,000 per year
Parents must open the account, but grandparents can fund it

2. Index Funds & ETFs

If you want simplicity and diversification, index funds and ETFs are excellent choices.

These funds track markets like:

FTSE Global All Cap
S&P 500
MSCI World Index

Instead of picking individual shares, your grandchild owns tiny pieces of hundreds or thousands of companies worldwide.

Why they work well for children:

Low fees
Diversified risk
Historically strong long-term returns
Minimal maintenance
You can invest in these through:
A Junior Stocks & Shares ISA
A Bare Trust investment account

Popular choices:

Global equity index funds
Sustainable or ethical funds
Technology or future-themed ETFs

3. Bitcoin & Cryptocurrency

It might surprise you to see Bitcoin on this list, but for children, time is their greatest asset.

Bitcoin is extremely volatile, but it also has:

A fixed supply
Growing institutional adoption
Increasing recognition as “digital gold”
A long runway for potential growth

For grandchildren who won’t need the money for 10–20 years, they can afford to ride out volatility in a way adults close to retirement cannot.

Why Bitcoin can make sense (in moderation):

Long-term growth potential
Hedge against inflation and currency debasement
Teaches children about digital finance
High-risk, high-reward asset

How to do it safely:

Keep it as a small portion (5–10% max)
Use a reputable UK exchange
Store securely (hardware wallet if possible)
Never invest money you can’t afford to lose

Bitcoin is not suitable for all grandparents, but for those comfortable with risk, it can add diversification and future-focused growth.

Read: Bitcoin price prediction 2026

4. Premium Bonds

Premium Bonds remain a popular gift for grandchildren because:

They’re backed by the UK Government
There’s no risk to capital
Monthly prize draws up to £1 million
Tax-free winnings

They’re not technically an “investment”, but they’re a safe place to store money with the chance of winning prizes.

Best for:

Very young children
Risk-averse families
Short-term savings
Birthday or Christmas gifts

However, returns are unpredictable and often lower than inflation over time.

5. Property-Linked Investments (REITs or Property Funds)

Buying a property outright for a grandchild isn’t realistic for most families- but you can still invest in property through:

REITs (Real Estate Investment Trusts)
Property investment funds
Property ETFs
These allow you to invest in:
Offices
Warehouses
Shopping centres
Residential developments

Without the hassle of being a landlord.

Why property exposure can help:

Diversifies beyond shares
Can provide income and growth
Hedge against inflation

These can be held inside a Junior ISA or investment account.

Risks to Consider Before Investing for Your Grandchildren

Before you invest in any of the above options, remember:

Markets go up and down
Crypto is highly volatile
Junior ISA money can’t be accessed until age 18
Your grandchild will legally control the funds at 18
Inflation can erode cash savings

It’s often best to diversify across several options rather than putting everything into one investment.

The Best Strategy to Invest for Your Grandchildren

The best way to invest for your grandchildren is to diversify- build a portfolio that contains a mix of different investment products.

This allows you to take advantage of different corners of the market and protect your grandchild’s pot from being wiped out!

A sensible example portfolio might look like:

50% Stocks & Shares Junior ISA (index funds)
20% Cash Junior ISA or Premium Bonds
15% Property or thematic ETFs
10% Bitcoin or crypto
5% ethical or education-focused funds

When it comes to the best investments for grandchildren in the UK, the biggest advantage you can give them is time.

Starting early means:

Small contributions grow into meaningful sums
Risk is spread over many years
Financial education begins young

A Junior ISA should always be the foundation, with other investments added depending on your risk tolerance and values.

Whether you choose funds, bonds, Bitcoin or a mix of all three, you’re not just giving money, you’re giving your grandchild opportunity.

*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.

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5 Best Investments for Your Grandchildren in the UK (2026 Guide)