Saving for our children’s future

My children are growing up way too quickly. My son is now 15 and planning on joining the army as soon as he leaves school next year. My girls turn 12 and 7 this year too. I often wish time would slow down and they could stay little and innocent for longer but sadly this doesn’t happen and instead I have to happy watching them grow and become more independent.

Of course most parents want the best for their kids and want them to have the best future possible. Many parents would like to see their children do well at school and hopefully move on to university and attain a good career once they reach 18. Whatever a child chooses to do once they reach adulthood costs money and even tho they are technically adults at the age of 18; it’s usually still down to us parents to help them out financially.

If your children are still young then it’s best to plan ahead for their financial future. Things such as going to university, travelling, cars, and even basics such as clothes don’t come cheap. One way of planning for all these things and more is a Junior ISA.

A junior ISA is a tax efficient way to save for your child’s future. The money in the account can be paid in by parents or relatives and belongs to the child. The account can not be accessed until the child turns 18, meaning it’s protected from anyone taking it out and means a nice lump sum once the child has their 18th birthday.

Just like adult ISA accounts, there are different types of junior ISA’s. There are also many companies and establishments that offer junior ISA’s.

Wealthify Junior ISA offers two types of accounts. The first is their Junior Cash ISA, which works similar to a bank savings account. This earns a small amount of interest at a fixed rate set by the Bank of England. The other type of ISA is a Stocks & Shares ISA. All of my children have a stocks and shares ISA account. They are also known as Junior Investments. The money in the account is invested into financial markets with the aim of earning higher returns. There is a small risk with this sort of account as the investments can and do go down as well as up. With my children’s accounts I have only ever seen a very small drop. The majority of the time their investments go up a fair amount each year. A child can have both types of ISA accounts opened for them.

A Junior ISA can be opened for a child from the day they are born up until their 18th birthday. Opening the account earlier on means a better chance of a bigger investment. Money can be paid into most accounts via a regular direct debit set up or one off payments such as when it’s the child’s birthday or Christmas and they receive money etc. There is not usually a set minimum amount of what can be paid in but most junior ISA accounts do have a maximum annual limit for the accounts.

If you calculate the expenses of an 18 year old and what sort of things you imagine for their future – university, car, house, travel etc, then saving a little each month will certainly be worth it.

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