Tips to help save for your children, too
IF YOU plan to save for your children, a Junior Isa is one of the best options for building up a tax-free pot.
These replaced Child Trust Funds, which were offered to children born between September 2002 and January 2011, and usually pay higher rates.
Emma and John Boyce opened a Junior cash Isa with OneFamily for their daughter, Florence, six, a few months after she was born.
The couple, who live near Bristol, opened the account with a few hundred pounds and pay in £50 a month. So far, they have saved £5,000 and hope to amass £20,000 by the time Florence is 18 years old.
Emma, 42, an IT contractor, says: ‘It’s useful to have somewhere to save cash gifts from friends and family.
‘We hope to put aside enough to one day help our daughter with university fees, a car or a house deposit.’
Verity White, 39, took out a Triodos Ethical Junior cash Isa when her son, William, was born in January 2016, and now he has more than £5,000 stashed away for his future.
Verity, a freelance film-maker, made an initial deposit of £1,000 soon after his birth and now saves about £100 every month. The three-year-old’s grandparents also make one-off payments as birthday and Christmas gifts.
Verity, from Bristol, says: ‘You don’t know what life is going to throw at you in the future, so I wanted to have something locked away that he could use for a house deposit or maybe university.’
Parents can also put money into stocks and shares for their children. There is more risk involved, but you could boost the returns significantly over the long-term.
Experts recommend saving small sums each month to ride out any stock market volatility. And you must remember to check for fees and charges.
Patrick Connolly, chartered financial planner at Chase de Vere, recommends HSBC FTSE All Share Index. Over the past five years, it has delivered returns of 31.8 pc.
He also suggests Rathbone Global Opportunities Fund, which has offered returns of 93.7 pc in the past five years.