Fair Play for Children News — Saving For Your Children: Why Financial Support Really Matters
Andre Jackson is a freelance writer, with interests in daily living, mobility aid and the UK business sector. He has been writing for the past three years and is always looking for new collaborations with small businesses in the United Kingdom and also across Europe.
When the UK’s base interest rate was increased to 0.50% at the end of 2017, the Bank of England (BoE) sought to drive organic economic growth and boost savings rates. With some experts predicting a further increase as soon as May, now is the ideal time for aspiring savers to begin building wealth.
This is particularly relevant for concerned parents who want to save money on behalf of their children, with four out of five guardians actively committed to setting cash aside for their offspring in the modern age.
It’s a fundamental principle of parenting that adults strive to safeguard their children’s future, and a rising interest rate mitigates one of the main challenges associated with saving. With this in mind, the next step is for parents to seek out expert advice and create a viable plan that enables them to optimise their savings.
What Options Exist for Savers?
Recent research conducted by ISA provider Scottish Friendly has cast light on the most popular savings vehicles for children, and this offers crucial insight into how you can get started as an eager parent.
The findings were especially interesting, with the Junior ISA used by just 21% of parents to accumulate wealth for their children. This seminal and dedicated savings vehicle was launched back in November, 2011, but the diversification of the financial market in the wake of the great recession has encouraged parents and guardians to compare a wider range of options.
As a result of this, 26% of parents currently invest in child trust funds, which serve as a secure vehicle that only become accessible when infants reach adulthood. A further 9% choose to save money in dedicated investment accounts, which are slightly riskier but tend to deliver greater yields.
The dominant vehicle are traditional and child-focused savings accounts, with 66% of parents continuing to leverage these. With the base interest rate likely to increase further in the spring, these simple accounts could well become even more popular as 2018 progresses.
What Support is Out There for Savers?
While having an understanding of the savings market is crucial, this means little unless you can access expert support to ensure that you make an informed decision.
Take financial planning firm Tilney, for example, who have an entire arm dedicated to the process of actively saving money for children. This service includes in-depth advice that will ensure that you have the right questions in mind when considering your options, such as when the money is required and your initial savings objectives. Similarly, the brand will encourage you to determine how much control you want as a saver, in terms of accessibility and the type of assets that are included as part of the account.
This type of support will also encourage you to consider whether or not you’re the best person to open an account, as in some instances it may be tax-efficient for grandparents to invest in a savings account. This is part of a wider service that can reduce tax and commission costs while optimising the total amount that you’re able to save.