Saving for grandchildren who live abroad

Annie Shaw

Annie Shaw looks at ways to open savings accounts for grandchildren who are resident overseas.


We have two grandchildren living in the USA. My husband used to put money into their National Savings account at the Post Office for birthdays and Christmas, but the Post Office no longer offers this facility.

We do not want to take out a regular monthly savings plan, but would like to continue to save occasionally for the boys.

Do you know where this could be done in this country, but in the boys’ or their parents’ names? 

Read our complete guide to giving financial gifts to grandchildren.


The main problems you will come up against are fraud and anti-money-laundering rules. 

It is often possible for a person who now lives abroad to retain a UK account if they open it while they are in the UK, but you will have difficulty finding anyone who will open an onshore account on behalf of a third party who is not a UK resident. 

First, however, I suggest you look at the problem from the other end. Are the children ever likely to live in the UK? If they are overseas citizens, how will they eventually access the money you have saved? Might it not be simpler for the parents to open savings accounts for them locally and for you to contribute to those? 

If you really do want a UK account, are the children just temporarily abroad? In this case, could their parents open an account from a UK address, if they have one, on a visit to the UK? 

Beware of tax

Grandparents often like the idea of opening a ‘secret’ account in which they can save for their grandchildren, either because they do not trust the children’s parents as custodians or because they want to surprise them with a nest egg. 

Secret accounts can, however, be highly problematic in respect of tax and benefits, both in the UK and abroad. They are also easily overlooked and lost if the person who opens them dies without telling anyone of their existence.

Find out more about tax and giving money to children.

Savings accounts for children

If your grandchildren have ever lived in the UK, they may already have a Child Trust Fund or Junior Individual Savings Account (Junior ISA) each. You can continue to pay into these even though the beneficiaries now live abroad (although not ordinary ISAs – available to children over the age of 16 – which can be retained if the child moves abroad but no more contributions can be paid in). 

Finally, you can still buy National Savings and Investments accounts, such as tax-free Children’s Bonds (formerly Children’s Bonus Bonds) as a grandparent, although the Post Office no longer sells them over the counter. 

You now have to buy them by post if the children live abroad. You’ll need to check with the parents that local regulations allow you to invest in the bonds for them and about the tax position in the individual state where they live. And the parents will also need to send proof of the children’s identity and address, if NS&I does not have these on record. You can get more information by calling 0500 007007.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.