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In the past tradition placed responsibility for the major cost of the wedding on the bride’s parents, and wise ones may have taken out a long-term savings plan to pay for the event. Nowadays both sets of parents often contribute towards the cost and increasingly many couples pay for the majority of the cost of the wedding themselves.


As planning a wedding is an emotional occasion do decide in advance how much you wish to spend on the “big day”.
  • Shop around for the best deals, particularly cars, flowers and a photographer, but remember to always ask for references – cheapest isn’t always best
  • Put a plan in place to make sure you have the money to pay the bills when they come in

Whilst getting married is a wonderful occasion, remember it is just a single day of your future together, so don’t get too carried away on the cost, particularly if one reason to get married is to start a family in the near future.

COST OF BRINGING UP CHILDREN


Estimates vary but parents typically spend towards a third of their household income on their children. Whilst it is impossible to control many of the costs associated with bringing up children, it’s useful to remember that in the early years, certain costs can be contained, such as the temptation to keep buying lovely clothes, shoes and toys that in reality they will grow out of very quickly or get easily bored with. Do be aware other family members will need ideas on what to buy your children for birthdays and Christmas.

PROTECTING YOUR FAMILY


You never know what the future will bring so be prepared in case things go wrong. Insurance provides help if disaster strikes or loss occurs:

  • Life Insurance – pays out a lump sum when the policyholder dies
  • Critical Illness Cover – pays a lump sum to the policyholder if a diagnosis of a specified critical medical condition is made during the policy term
  • Income Protection – pays a percentage of an earner’s normal monthly income for a set period if the policyholder is unable to work due to illness or accident
  • Family Income Benefit - A regular monthly income to dependants for a fixed period if the family breadwinner dies
  • Private Medical Insurance – provides private medical treatment for an acute illness or injury on a short-term basis
  • Health Cash Plan policies provide a lump-sum payment for up to 100% of treatment costs

SAVING FOR YOUR CHILDREN


As children grow up, you will probably want to make sure they have some savings. Children’s savings accounts, Child Trust Funds and Junior ISAs are the most popular options to do this.

This will probably be an account that your child – or, depending on your child’s age, a parent acting on their behalf – accesses infrequently. It could be any type of account that you think is suitable, including instant access, regular savings or a fixed term bond.

It will, however, allow money to be withdrawn without any legal restriction, unlike a Junior ISA. There may be restrictions placed on the account by the bank or building society, particularly if it is a fixed term account, but that aside you or your child will be able access the money when it is needed.

This type of account can be used, for example, for saving up for a new bike, driving lessons or a special school trip. The account that is chosen may be specially designated children’s account or simply an “adult” account controlled by an adult on behalf of the child.

JUNIOR ISA


Junior ISAs, launched in November 2011, let you save and invest on behalf of a child aged under 18. These are tax-efficient savings accounts which allow parents and other family members or friends to put money aside for their child, who cannot touch the money until they are 18 years old.

By starting to save early, you can put your children on the path to a solid financial future. And with no tax on the earnings, the money you put away can grow even faster.

From April 2015 anyone with money in a Child Trust Fund can transfer it to a Junior ISA.

Whilst a child’s parent or legal guardian must open the Junior ISA account on their behalf, money in the account belongs to the child. However they can’t withdraw it until they turn 18, apart from in exceptional circumstances. They can, though, start managing their account on their own from age 16.

TAX ON CHILDREN’S ACCOUNTS


The Junior ISA limit is £4,128 for the tax year 2017-18. If more than this is put into a Junior ISA, the excess is held in a savings account in trust for child – it cannot be returned to the donor.

When your child turns 18, their account is automatically rolled over into an adult ISA (sometimes called NISA).

They can also choose to take the money out and spend it how they like – for example, on driving lessons, further education or job training.

For more information see the HM Revenue & Customs website.

Junior ISAs have replaced Child Trust Funds (CTFs), a similar type of account, which was available to children born between 1 September 2002 and 2 January 2011. CTFs have now been discontinued and no new accounts can be opened. However, those children who already have CTFs will retain them until they reach 18, and contributions can still be added to them.

The original CTFs received top-up money from the Government while Junior ISAs do not. Since 1 July 2014, the maximum annual amount that can be invested in either a Junior ISA or CTF is £4,128. With a Junior ISA, the start date for the year is the first day of the tax year (6 April); with a CTF the start date of the year is the child’s birthday.

Anyone with parental responsibility for an eligible child may open a Junior ISA for a child under 16 years old. Children aged 16 or 17 may open one for themselves.

Junior ISAs are available from a wide range of providers including banks, building societies and insurance companies. You can choose to invest in stocks and shares or in cash, as there are two types of Junior ISA:
  • Cash Junior ISA: This has no tax on interest on the cash you save
  • Stocks & Shares Junior ISA: Your cash is invested; you have no personal liability to tax on any capital growth or income you receive

A Junior ISA can generally only be opened for a child who is under 18 years old, resident in the UK and qualified to hold a CTF which means the child must, as highlighted above, have been born between 1 September 2002 and 2 January 2011. The residency requirement does not apply if you are a child of parents in the Armed Forces living abroad. For more information, see gov.uk.

A child can have one cash Junior ISA and / or one Stocks & Shares Junior ISA, but only £4,128 can be contributed in total in any tax year. Once set up, the account can then be topped up to the annual limit by parents, grandparents and family friends, or indeed by anyone else, including the children themselves. Since no withdrawals may be made until the child turns 18, Junior ISAs (and CTFs) are mostly suitable for long-term savings goals, such as funding university study or the eventual deposit on a home in many years’ time.

As touched on earlier, since April 2015 a CTF can be transferred into a Junior ISA with the same provider, although it may be necessary to change provider (if the parent so wishes). One of the reasons a parent might wish to switch might be potentially better returns from a wider range of investment funds.

If you're looking for children's savings accounts, we offer a Junior Saver account and a Junior ISA account.

YOUR CHILDREN’S EDUCATION


School should be a happy and fulfilling time for your child, and for some people it’s worth paying in order to get it right. While the cost of schooling in the State system may be free, other costs soon mount up whether they are uniforms, shoes, sports gear, lunches, transport and computers, or school trips.

GOING PRIVATE


The cost of paying for private schooling varies widely from school to school. The 2016 Independent Schools Council (ISC) Annual Census revealed that the average boarding fees per term for pupils at ISC-member senior boarding schools was £10,217, with day fees at £6,104. ISC-member prep boarding school fees are a little less, at an average of £7,572 per term for boarders and £4,590 per term for day pupils. The average boarding fee across the prep, senior and sixth-form age groups at ISC-member schools was £10,317.

You should be aware, though, that if you choose to invest in a Stocks & Shares ISA, the value of your investment can fall as well as rise and you may get back less than you invest.

Sometimes other family members will contribute toward school fees, notably grandparents for whom not only is it an act of generosity, it could also be part of their Inheritance Tax (IHT) planning strategy. Regular gifts out of income, which can include insurance premiums and a commitment to pay school fees, are exempt from IHT.

Other parents remortgage their home to meet shortfalls in meeting the fees, but beware the risk of losing your home should you be unable to repay your mortgage.

If you choose a private education for your children, remember that the fees are just the start of your expenses. Like the State system, there will be plenty of extra costs such as uniform, equipment and school trips to pay for, and these are likely to far outweigh the comparative cost incurred at a State school.

If you have any questions, please contact our friendly team on 03300 244612.

Family Building Society
Ebbisham House
30 Church Street
Epsom
Surrey KT17 4NL
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