5 ways parents could save their child’s future
28th December 2011
Saving for your child’s future can be difficult, especially during these bleak economic times. There are some attractive and effective options available to safeguard your child’s future though. Here is a quick way you could save money for your teenager’s future.
Junior ISA
It’s a tax-free savings account which allows you to deposit a total of £3,600 a year in either a cash ISA or a stocks and shares ISA. Cash ISAs work in a similar way to a savings account with a fixed rate of annual interest, apart from the fact that they are tax free. Stocks and shares ISA accounts are an ideal way of building up a savings pot over several years by depositing bits here and there, replacing the Child Trust Fund.
Parents will be pleased to know that the accounts will be locked until the child is 18. However, teenagers aged 16 and above can manage the account for themselves.
Life insurance
You can protect your own financial future and that of your child with life insurance. In case you cannot provide for your children as a result of illness or death, you can gain peace of mind that they will have some sort of financial stability.
Savings account
The majority of high street banks will have a specialist account for children and young people. You could start helping your child to learn about personal finances by opening a savings account.
Investing
Investing in stocks and shares could see your money increase over a certain period of time. You might find the return very rewarding and this could ultimately be used to finance your child’s future. The stock market is regarded as one of the best options for long term investment over five to 10 years.
National Savings
A children’s bonus bond from National Savings is only available to those under the age of 16, although adults must purchase them. They are bonds which have a fixed rate and can be held until the child turns 21. They are also tax free and good value for money for young people who are paying tax.
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