Saving for your children's futures

Estimates vary in terms of how much of their income parents spend on bringing up 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.  

Some useful tips and advice can be found on Money Helper.

The cost of 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.

The cost of paying for private schooling varies widely from school to school. 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.

Saving for your children

As children grow up, you will probably want to make sure they have some savings. Children’s savings accounts 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It will, however, allow money to be withdrawn without any legal restriction, unlike a Junior ISA.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 a 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.

Since April 2015 anyone with money in a Child Trust Fund (CTF) can transfer it to a Junior ISA. 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.

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.

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

Protecting your family 

You never know what the future will bring so it's important to be prepared in case things go wrong. Insurance can provide help if disaster strikes or loss occurs and can offer financial support to your family.

• 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

To help make sure your family is financially protected, we've partnered with Cavendish Online, one of the UK's leading financial service providers.  You can find more information here

Family Building Society receives payment from Cavendish Online where an introduction to their services leads to a transaction taking place.