If you are a parent of young children, as I am, you probably wonder from time to time about their financial future, for example:-
- If they want to go to university, how will they/we pay for it?
- How will they afford the deposit on their first home?
According to new research, over 40% of parents aren’t regularly saving for their children’s future. Those who are saving are only putting away an average of £34 a month for each child. Once inflation is factored in, this is unlikely to produce a pot in the future large enough to cover university costs or a deposit on their first home.*
The average house price could hit £1.3 million by the time a child born this year hits the age of 30 if property prices continue their current upward trend.*
Of course, many parents just can’t afford to save for their children. It’s not a case of not wanting to, but simply not being able to. Parents also have their own retirement to plan for as well as wanting to spend any spare cash on themselves.
FMB can help with your financial planning. We can use cashflow modelling software to see if there is any spare money in the budget that could be saved for your children. We can give you a realistic idea of what this will be worth in the future and how far away this might be from your target amount. We can give advice on the best vehicle to save this into; such as a Junior ISA or another form of savings account. It is important to ensure that savings you do make for your children are invested in the best possible place and in a tax efficient manner.
Since April 2015, parents are now able to transfer the old style Child Trust Funds to Junior ISAs. As more providers are offering these newer savings products, parents may benefit from a wider choice of investments or lower charges.
Call us on 01539 725855 if you would like to discuss the financial future of your children.
*Source: Yahoo Finance 14.04.15