News and Articles

Build a Nest Egg for when your Children need it

By | Savings | No Comments

The thought of a child flying the coop and leaving the family home can be a daunting thought for parents, with many asking how will their fledgling cope financially. Parents and family members often do what they can to give children a financial helping hand with things such as university tuition fees to buying a car or putting a deposit on a property.

When you think about the rising costs associated with your child growing up, it is easy to understand why many parents begin saving for their child’s future when the child is young. Building a nest egg for your child for when they need it can help them buy their first car, cover university tuition fees and living costs or could even help them buy their first property.

As an Independent Financial Adviser (IFA) in Lincoln and across the East Midlands, we work in partnership with our clients to ensure they have the most effective and efficient strategies in place for building a nest egg for their child’s or children’s future.

Saving and investing for your Child’s Future

According to research, it is becoming more commonplace for new parents and grandparents to start thinking about the financial future of their children and grandchildren from birth with many setting up and making regular payments into children’s bank savings accounts. Aside from savings accounts, many parents are setting up Junior Individual Savings Accounts (JISAs); one of the biggest benefits of JISAs is that any returns will be exempt from personal taxation. You can make savings easily on day to day expenses such as downloading music for example you could use youtube to mp3 shark instead.

JISAs can hold stocks, shares and cash savings that are tied up until the child’s 18th birthday. This makes this form of nest egg ideal for adopting a long-term approach that involves investing in assets such as shares and which offers potentially greater returns than cash, whilst accepting the risks of market linked investments. This would offer the best opportunity and potential to allow your child’s money to grow more than if placed in an ordinary deposit savings account. Young adults face many large expenses from university costs to buying a home or getting married, a JISA could help cover some or all of these costs.

JISAs & Tax Rule Changes

It is important to mention that if you’re considering investing through a JISA for your child’s future the tax rules applicable may change in the coming years and the tax advantages will depend on your personal circumstances. We would recommend seeking independent financial advice to ensure you understand the saving and investment options available to you and regularly review these once they are in place to keep abreast with changes. If should be remembered that JISAs are only one of a range of possible solutions.

At Castlegate, as an IFA and a firm of Chartered Financial Planners in Lincoln and the surrounding areas, we can support you with all aspects of financial planning to help you build a nest egg to help your children in the future. As an IFA in Lincoln we provide financial advice that is tailored and bespoke to you, sourced from the wider market and unique to your personal circumstances.

If you are looking for an IFA in Lincoln or across the East Midlands to provide advice and guidance on finance planning, please do not hesitate to get in touch to talk about the most appropriate saving and investments products for your personal circumstances and financial objectives.