New Ways to Save for Your Children’s Futures

It might seem strange to start thinking about investing for your child’s future when they are not yet out of nappies. But there is a lot of common sense in thinking about how you can put some money aside for them, because it will put them in a much stronger financial position once they reach the age where they are thinking about leaving school and setting up a life of their own.



The question is really how can you do this? Child Trust Funds used to provide a good method for starting things off, as the government provided two payments seven years apart to help parents save for their children. But now they have been abolished you have a decision to make on how you will start to put money aside for your children.



Fortunately there are still more solutions you can opt for. One of the easiest is of course to open a savings account in each child’s name. This could be a good way to get the ball rolling if you simply want to put a small amount away for each child whenever you can. Alternatively you could set up a regular deposit into each account.

Of course there are also accounts available that are specifically set up for children. These child savings accounts are run by lots of organisations but watch out for the interest rates to make sure you get the best ones.



One popular way to invest some cash for kids is to buy some Premium Bonds. The plus point is that there is the chance the bonds will win up to a million pounds, but the negatives are that they may not win anything at all. This would mean the value would depreciate over time.



In the future the new Junior ISA will also be made available by the government. It will have many of the same features as the normal ISAs that are available now, but it will be ideal for children to have so their parents can save for them.



Of course you can also invest in stocks and shares in various ways as your children are growing up. This courts more risk however, so it depends on how confident you feel about investing in this way as to whether you go down this route or not. It could lead to you bringing in more than you would from a simple savings account, but similarly you could end up with less than the original amount invested as well.



That said, there can be tax issues for a parent with regard to some of these options. For instance, if interest on one of these accounts was to reach £100 per annum then it will be taxed on a parent. As such, it is important to seek advice before opening any sort of account for a child.



Perhaps the best way to invest for your children is to look at child pensions. But whatever you decide to do, a plan of investing in more than one way could be the best thing you do for them for the future.