What do I need from my savings plan?

Before you choose a savings plan for your children, you should consider what your goals are. If you have a clear idea of what you want to achieve, you’ll be able to select the plan which works best for your family. A savings plan for your children can be used for a range of options, including:

• School fee planning

If you’re planning to opt for private education for your children, typical fees are around £3,500 a term. Depending on what kind of private education your child receives, you’ll need to prepare for the financial burden. Unexpected costs, such as sports, field trips and uniforms can add to the cost.

• University costs planning

University tuition is becoming more expensive every year – from September universities will be able to charge up to £9,000 a year in fees. On top of academic fees, your child will face the additional cost of living and maintenance – especially if they choose to move away from home. Investing before your child goes to university can be a huge help when the costs eventually hit.

• Reducing inheritance tax

If you want to reduce the sting of an inheritance tax on your estate and give your child or grandchild the best possible start, investing in a savings plan, such as a junior ISA, means the money will be passed on to your beneficiaries without loss.

What are my options?

When it comes to finding the plan that’s going to work best for you and your children, make sure you’re aware of your options.

• Junior ISAs

If you have a long time to go before school or university begins, a JISA is a great, high-interest choice for increasing investment. Regular monthly deposits are relatively simple to access when necessary and the lump sum you receive at the end will be tax-free. While there are limits on how much you can deposit in an ISA, they remain a very popular choice.

• National Savings Bonds

The Children’s Bonus Bond, offered by National Savings Investments, is backed by the government and offers a completely risk free way of saving for your child. The bonds offer a fixed rate of tax-free interest for five years and even deliver a bonus at the end if you hold onto them for the full term. Since the interest and payment are guaranteed, this is a good option if you have a precise idea of what you’re saving for.

• Child Trust Funds

A relatively recent government initiative, the CTF insures every newborn child is entitled to a payment of £250 to £500, invested on the child’s behalf until the age of 18. While the government makes additional contributions, parents and friends are also be able to contribute to the fund themselves. Once money is paid into the account however, it must remain there until the child reaches 18.

Being aware of every approach to saving for your child’s future is the first and best step to ensuring they have the head start you want for them.

http://ezinearticles.com/6757578