Saving for your Children future is a major undertaking that no parent should overlook. Luckily, there are so many options on how to save for your beloved children and most parents find themselves overwhelmed by all these choices while trying to choose the best and most favourable option. There are many and different reasons why you would save for your kid’s future ranging from education to assisting your kids in raising some deposit when acquiring their first home. There is also long term saving where you save for the pension of your children and regardless of which option you opt to go by, saving for your Children is one of the best things you can do to secure their future.
Savings account for kids
Most people in UK opt to save for their children through savings account. If you wish, you can direct the bank to put the money in your adult saving account. However, you will also realise that children savings accounts offered by banks and building societies provide better deals and rates on the savings. You can set a saving account on behalf of the children when in their young ages and they can operate the accounts later when they are of age. This is actually the best way of teaching your children on how to save and it is also one of the lowest investments you can make. However, you will also have to appreciate the fact that interests paid into the account comes with tax deductions although you can still reclaim the deducted tax by filling a form.
Child trust funds to save money
Child Trust Funds are also a suitable option of saving for your Children future. In fact, this option is tax free and most children are eligible for this saving plan. A child Trust Fund account is opened by the parents on behalf of the children and family members and friends can deposit money in the fund every year. However, these accounts also come with some limitations at times especially on the maximum amount of money that can be deposited. When the child is about 16 years of age, he or she can operate the account and by 18 years, they are authorised to access the saved money.
A pension plan is a curve ball way to save money for your kids
A pension plan is great way for long term savings for your children and the child can have more than twenty years pension worth before the kids get to contribute into the pension plan themselves. Just like in the Child Trust Fund, other family members and friends can also contribute into the savings once the account is set up. Sadly, funds in the pension saving plan might not be accessed in younger years and the child might only access the money when he or she hits 55 years of age. So with a pension saving plan, the option is largely limiting although tax relief is applied now and then.
You can also save for your children’s future through shares although this is always a more risky option. There are also a number of investment plans tailored for children in UK which you should also think about. When you are saving for your Children future you will have to make a decision between short term and long term savings and then choose the most appropriate option for you and your child.