08 Dec 2020
Parents want to give their children the best possible chance at a good financially stable life, but often do not know where to begin. Kids are expensive and saving for their future can be challenging.
Let’s ask some questions
• Do you want your kids to struggle when they retire?
• Do you want your kids to study whatever they want without you worrying about how to pay for it?
• Do you want them to have a rainy-day fund for emergencies?
I’m sure the answer to all these questions are yes, but which are the best ways to invest for your children? You want to teach them the value of money management and saving from an early age, and you want to give them a boost in life which you probably didn’t have.
• Savings accounts – this is a great way to teach them about regular monthly savings and compound interest. The money is not tied down and you can withdraw it whenever you want. Savings accounts these days do not offer much in the way of returns and is ideal for a short-term savings goal.
• Trust – A trust is a financial product in which you can place assets (money, property investments etc.) It is administrated by a trustee for the beneficiaries in its simplest form. This is a good way to protect any assets you wish to leave your children. You can also invest regularly into a trust.
• Junior Self-Invested Personal Pension (SIPP) – This is a long-term savings plan for your children’s retirement. Your child’s retirement is very far away, but time is compound interest’s best friend. If you invest £50 a month for your child when they are born and they continue to contribute when they are adults, the 55-year investment could be worth around £358 000 at maturity. (6% interest p.a. and 2% annual inflation increase)
• Education savings plan – Education costs are staggering these days. Opening an education savings plan when your child is born, will give them the opportunity to study anything they desire when they finish high school.
Teaching your children about good savings habits and giving them the financial stability you never had, is part of your legacy to ensure your children have success in life without battling any financial worries.
Speak to your deVere Acuma adviser today about the various options you have to invest in your children’s financial future. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.