Your children will always come first when it comes to planning for your household. In times of especial economic difficulty, your children’s future might seem all the more insecure – making it all the more important that you make the right steps to ensure they are well set-up. What are some of the best ways to save for your child’s future?
Piggy Banks
Piggy banks are an iconic ornament in any child’s bedroom, and the perfect way to introduce your children to the concept of saving. Pocket money and cash allowances are small but inoffensive ways for your children to accrue money, and can be used to demonstrate the value of putting money to one side in service of an ambition or goal.
After breaking a piggy bank or two with your children as they buy favourite toys and clothes, you can give your children control of their own piggy banks – and even begin to sneak some bonus money of your own in, as a form of ‘interest’. A big piggy bank could be a brilliant way to put money aside alongside your children’s, in order for them to buy some big-ticket items when they get older, such as a laptop for their studies.
Children’s Savings Accounts
Of course, the piggy bank can only be so useful when it comes to saving for your children’s future – as an educational tool, and a short-to-medium-term pocket money saver. Long term savings to set your children up comfortably when they grow older requires more meaningful engagement with financial products available to you as a parent.
One of the simplest and most effective ways to build a proper nest-egg for your children is through the opening of a dedicated bank account in their name. Children’s savings accounts enjoy relatively high rates of interest, since they do not typically allow easy access for withdrawals; since the primary aim is to build savings for children over time, withdrawals are largely unnecessary.
With a high rate of interest, your children’s nest-eggs can start to accrue their own value even as you and other family members chip in to it. Over a decade or more of small savings, you can create a robust financial net for your child to receive on their 18th birthday.
NS&I Premium Bonds
You can take the concept of the children’s saving account and apply it to other kinds of financial product, in order to maximise the passive earning potential of any savings kept and set up your children for adulthood. Junior ISAs, or JISAs, are one popular form of savings account that also utilise limited access to maximise interest rates – and can give you more active control over returns via stock and share investment.
However, NS&I premium bonds are a simpler way in which savings can be maximised, being a low-effort way in which to benefit from potential returns in the form of prizes. You can bequeath the premium bond account to your children on their 16th birthday, and it can be grown to a maximum holding of £50,000.
