There are many options to choose from when you are considering saving money for your child's future. Here, CEO of Nutmeg, Nick Hungerford, shares his to tips for investing in your child's future.

Parenting on Female First

Parenting on Female First

1. Check you are receiving the correct amount of child benefit: HMRC pays £20.30 per week for an eldest or only child and £13.40 per week for each subsequent child. So a family with two children where neither parent earns more than £50,000 will receive £1,752 per year. However, new rules came into effect on 7 January this year which will hit higher earners. If either parent earns more than £60,000, you receive no child benefit at all. If one parent earns between £50,000 and £60,000, the benefit is gradually tapered to zero. You can find the full details on HMRC’s website.

2. Start a Junior ISA: If your child was born before September 2002 or after 3 January 2011, you can start a Junior ISA on their behalf. This can be a tax efficient way of saving or investing up to £3,600 a year.

3. Get in the savings habit: The good news if you have a young child is that you have plenty of time to build up a nest egg. A little goes a long way. Thanks to the wonders of compound interest, start saving and investing just £10 a week when they’re born and at an annual rate of 3 per cent, it will be worth £11,420 by the time they’re 18.

4. Don’t forget school and university fees: Not to cause alarm, but if average private school fees continue to rise at a similar rate, seven years of education for two children in the 2020s could set you back £270,000.  And that’s before they even make it to university. (More here: http://nutmegonomics.nutmeg.com/2012/12/10/how-much-will-it-cost-to-send-my-children-to-private-school/).

5. Ask the family to help: Don’t forget their grandparents - you know the ones who’ve sat on 30 years of rising house prices. Lots of providers now make it easy for family members to contribute to a child’s savings pot.

6. Set a target for all of your goals: Nowadays there are companies such as Nutmeg (www.nutmeg.com), an online investment manager, which give you all the control you want over your finances, with none of the hassle. You can set up goals for whatever is important to you – your children’s future, your next home – and it will do all the hard work for you.

For more information, visit www.nutmeg.com

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