It is no secret that, in many ways, the children and young adults of today have it much tougher than their parents. In the 1960s, a fairly standard salary of about £1,300 could get you a house, a car and comfortable living.
Fast-forward to today and a similar salary (adjusted for inflation) wouldn’t even come close to giving you the same purchasing power. In light of this intimidating fact, here are some of the ways you can help to save for your child’s future.
Start saving early
One of the best measures you can take to ensure that your children have the best opportunities as they grow older is to start saving money early on. Putting aside some cash each month, either into a savings account or anything similar will help you to build a fund which could be used for emergencies, a child’s mortgage deposit, a car, or anything in between.
The amount you invest each month is entirely down to you and may depend on what you intend to use the money for. Even £30 per month would equate to £7,200 (without any interest added on) over 20 years, so be sure to do some calculations of your own to help you decide.
This may seem a little overboard if your children are still young, but taking out a child pension may also be a good way forward. These can be set up by a parent or legal guardian and cannot be touched by the child until they reach 55 years of age.
Contributions are topped up by the government, and you can save up to £2,880 each year, so your child pension could be worth a very significant amount if it grows in value (as a result of interest or investment returns).
Another option is to seek specialist advice from a firm like Tilney that can help you to create a comprehensive plan for saving for your children. These firms have years of experience in helping people to save for their children’s future, but they can also be costly, so it is worth shopping around to find the most cost effective option.
Backed by professional advice, you should have a clear goal and greater confidence when saving for your children’s future.
These are some basic methods which should help you to make your own individual plan for saving. Be sure to do some further research to find the best methods for your requirements.