3 Ways to Save For Your Childs Future

*This is a collaborative post on ways to save for your child’s future

We all want to give our children the best start in life. Setting them up financially can help massively once they reach adulthood. We live in such an uncertain world, you only need to look at the recent events of the pandemic and Brexit to see that we just don’t know what’s around the corner. And so having some funds available to utilise is always going to be useful as they set out into the world.

Whether it’s to help with a mortgage deposit for a house, money towards their first car and driving lessons, university and student accommodation costs or setting up their first business, starting saving in the here and now can give your child the opportunity to help themselves later on, and put them on a prosperous path. Here are some ideas.

Open a savings account

You can set up an account with a bank or building society on behalf of a child. They can start managing their own account when they reach the age of seven. Although if you plan on saving for long-term goals it can be wise to go with an option that can’t be touched until they’re eighteen or twenty-one. On birthdays, Christmases, and gift-giving occasions, you could ask friends and family to make a deposit into this account instead of buying things like toys and gifts (since kids tend to always have too many of them anyway!)

You could set up a standing order from your bank and have a small amount transferred into it each month. This will allow it to slowly build in the background. Another option, if you’re financially able, is to have their child benefit money paid into it. If you don’t need to rely on the money in the here and now, it can build up over time. Then they can utilise it later on. 

Save for your childs future by making an investment

Making an investment is a great way to save for your child. If you’re in a position to invest money into something like a buy to let mortgage, by the time the house is fully paid off your child will be an adult and could either move into it or you could sell it and they could use the money elsewhere. An investment is a fantastic choice as it will appreciate in value over time. It will keep up with inflation far better than money in a savings account. 

Consider NS&I Premium bonds

Unlike other savings or investments, where you earn interest or a regular dividend income, with Premium Bonds you’re entered into a monthly prize draw where you can win between £25 and £1 million tax-free. On average, one in three people win a prize each year with a £1,000 investment. You can keep buying bonds for your child until you reach the maximum holding level of £50,000. They’re backed by HM Treasury, so all the money you invest is 100% secure. There’s no way of losing money, and so even if they don’t win prizes the bonds in the account will remain the same.