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Tuesday 15th October 2019

Are you saving for your children’s future? (Big bills are coming!)

Savings
Start small - but start early

Just when you think you’ve emerged, triumphant, from childcare costs, someone sensible reminds you that the worst of it is still to come, namely leaving home.

Because we’re nice like that, my husband and I would like to be in a position to help our son stump up for deposits, driving lessons, perhaps even some wheels, when the time comes. How we achieve that, though, is a truly sobering prospect.

My son (‘G’) will soon be 10 years old. We used to kid ourselves that we still had time to figure all this out, but children have this inconvenient tendency to grow up at the speed of light.

I lose sleep over what it’ll be like in eight years time, with no student grants, exorbitant university tuition fees (currently averaging £9,000 per year) and rising accommodation costs. If G decides university isn’t for him (we won’t have to pawn anything – hurray!) he’ll still need cash to move out, or fund a gap year. Conserving crocodiles or community gardening in Cambodia won’t pay for themselves.

Shaking a collection tin on the high street doesn’t appear on this list of acceptable ways to provide financial security for our offspring. Disappointing, I know, but make a good start with these.

  1. When G was born in 2006, we received £250 from the government’s Child Trust Fund (CTF),  a scheme designed to ensure children had access to tax-exempt savings at age 18. The scheme closed in 2011 and now over 700,000 of these accounts are lying dormant. If you set up a fund between 2005 and 2011 and have since lost track of it, you can find it here. Although this scheme is defunct, you can continue to pay in, either by direct debit or one-off payments.
  1. Junior ISAs have taken the place of CTFs, but CTFs can be transferred across – just contact your fund provider to start the process. Both allow you to save up to £4,080 per year, tax free, and both pay out on your child’s 18th
  1. After a strong coffee and a deep breath, I plan to use a savings calculator to give myself a seismic shock with how much cash we’ll need to stash, in the time we have, to achieve a decent lump sum. I may not like the answer, but it’s a step in the right direction.
  1. Pay into a Friendly Society tax-exempt plans for between 10 and 25 years, to a maximum of £300 per year, with no Capital Gains or Income Tax due while you continue to pay in.
  1. We were given gifts of Savings Bonds by G’s Granddad when he was born. The interest is tax free and you can invest with as little as £25. Calculate the interest here.
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Clare Lawrence

Clare Lawrence

Mouthy Blogger

Clare Lawrence, nicknamed 'Coupon Clare' at college, lives mostly in Cornwall. Proud mum to Gregory, she'll stop at nothing in her quest to save cash!

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