If you are wanting to set aside some money for your children’s future, then there are many saving options available to you. Although this may seem a long way off, starting a savings plan today will help in the long run with the likes of driving lessons, university fees, weddings or even a deposit on their first home. You don’t have to have a lot of money to get the savings plan started. If you can set aside even a small amount of money each week or month you’ll be amazed how quickly this will grow especially when interest starts to accumulate. A lot of parents who can afford to, choose to invest their child benefit in a savings scheme for their children.
If you can’t afford anything at all, then why not ask grandparents and other relatives to put money aside for your child’s birthday, rather than buy them things they don’t necessarily need. There are several child specific trusts available.
• Investing in shares tends to generate a better return than paying into savings accounts (long term). However shares are more risky than savings accounts.
• Banks and building societies offer savings accounts just for children.
• There are various tax-free savings schemes available for children:
– NS&I children’s bonus bonds provide tax-free interest for children under 16. Available in issues, between £25 and £3,000 per issue, per child. These bonds are backed by the government so your investment will be secure.
– Junior ISAs are also available to children under 18 (who do not have a child trust fund). There are two types:
- Cash junior ISA
- Stocks and shares junior ISA
The above are tax-free but please don’t be swayed just by that fact. These are a long term investment.
• Stakeholder pension, yes thats correct a stakeholder pension. Both parents or grandparents can save up to £3,600 a year into a stakeholder pension scheme on behalf of their children or grandchildren. However as you can imagine this is ‘very’ long-term as your child will not have access to the funds until at least the age of 55.
And remember when your children are old enough, you could teach them to save and to fill their piggy bank. Giving them a target. They can then either invest/save or if they must… treat themselves to a little something as a reward!
For more detailed information, contact us via the opposite form and we will arrange a consultation with you to discuss the options further.