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Children Aware of Recession and Family Finances

Sun, 28 Feb 2010 00:00:00 GMT

What happens in the US tends to follow here shortly afterwards. American children are, somewhat surprisingly, aware that their country is in a recession with 7 out of 10 parents of children aged six to sixteen saying that their children understand what is happening with the economy.

The recent survey conducted by financial services global giant American Express amongst 506 households with young children, confirmed that 91% of parents are also committed to teaching their children about financial responsibility in 2010. The survey is the sixth in a monthly Spending and Saving Tracker sampling that seeks to monitor attitudes and views on the economy.

Not only are children aware of the recession, around 20% of children have suggested to parents that perhaps they should not buy certain items during a recession. And it was kids from more affluent families that were more prone to suggesting this.

The survey identifies top lessons for financial planning in 2010. These include:

Understanding debt and how it affects spending and saving (30% of respondents); Teaching the value of money through suitable reward systems such as pocket money (25%); and Learning how money is used in daily life (21%).

Whilst the survey also details how parents give their children cash to pay for daily essentials such as entertainment, school snacks and petrol, 18% say that they give money specifically to be deposited into savings accounts.

This long term savings culture and financial awareness was also a goal of the UK's Child Trust Fund programme introduced in 2005. This programme provides every child born since September 1st 2002 with a financial voucher worth at least £250 to be invested in a long term Child Trust Fund account that cannot be accessed until they are 18. A further minimum £250 voucher is provided on reaching age 7 and parents, family or friends can make additional contributions up to £1,200 per year to help the fund grow.

Child Trust Funds are one of the most participated in long term tax-free savings products in the UK. Whilst the money cannot be accessed until the child is 18, there are many providers and investment accounts available to help the fund grow over time.

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80 Percent of Parents Oppose Child Trust Fund Cuts

Thu, 25 Feb 2010 00:00:00 GMT

As the politicians debate the future of Child Trust Funds, an overwhelming 80% of parents say that all children should remain eligible rather than just those from low income families.

According to the survey conducted by Family Investments some 96% of parents believed that the introduction of the Child Trust Fund programme had been a good thing and had a positive influence on them saving for the future of their child.

Conservative proposals to reform the Child Trust Fund programme mean restricting payments to only those families with a household income of £16,040 or less. They believe that a change of this nature will produce savings of £300m per annum although the Institute for Fiscal Studies believes that the saving will be nearer £225m. The Liberal Democrats have said that they will abolish the Child Trust Fund programme altogether in favour of targeting the savings at current child related support measures.

The lower threshold for eligibility means that someone on the minimum wage would no longer be entitled to a Child Trust Fund account for their child, said John Reeve, Chief Executive at Family Investments.

Child Trust Funds have been popular with parents with 71% opening an account for their child in the first year. In the event that an account is not opened by the parent in the first year, the Treasury will invest the initial voucher into a default stakeholder scheme. Stakeholder funds invest in stocks and shares until the child is around 13 when the investment is moved into less volatile bonds. That initial year's worth of possible growth has been lost so all parents are encouraged to invest the voucher as quickly as possible to get the benefit of long term compounding of interest or growth. Additionally, anyone can invest up to £1,200 per year into a Child Trust Fund account to help the amount grow so that it represents a significant nest egg upon maturity when the child is 18.

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Almost a Third of Parents Fund Adult Children

Mon, 22 Feb 2010 00:00:00 GMT

Parents are having to support their grown up children and are doing so by remortgaging their homes in increasing numbers.

YUCKIES (Young Unwittingly Costly Kids) are behind around 28% of parents being coerced into raising funds to help their 18 – 30 year old offspring get a helping hand into life. Recent figures show a staggering 93% of parents are paying something towards their children's finances with around half saying that they are borrowing to achieve that goal.

The survey, conducted by leading Child Trust Fund provider the Children's Mutual, emphasises the lack of financial planning that had gone into preparing their children for the vagaries of later life. Two thirds of parents have or will reduce their spending to help support an adult child. Actions taken or considered include shopping more economically, selling cars and reducing energy usage.

Children's Mutual Chief Executive David White points out that reaching 18 does not mean financial independence for today's youngsters. What is clear is that only 13% of parents had regularly saved for their child's financial future whilst they were young.

Given these stark findings, the Children's Mutual emphasises the benefits of regular long term savings. Child Trust Funds were introduced by the government to help parents do just that. All children born since September 1st 2002 receive a government voucher worth at least £250 to be invested until the child is 18. With additional contributions of up to £1,200 per year permitted from just about anyone, the Child Trust Fund is an option to help with long term planning. An additional voucher worth at least £250 is provided when the child reaches 7 and with the average monthly regular saving now increasing to £24 per month by those who do save, the financial nest egg available when the child reaches 18 could significantly reduce the unexpected burden on parents as their children mature.

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Children Benefit From High-Interest Savings Accounts

Tue, 16 Feb 2010 00:00:00 GMT

Parents are being encouraged to invest wisely for the long term future of their children by seeking out the best high interest rate savings accounts. Research conducted by the Halifax has shown that, on average, children gain around £1,383.20 each year from a variety of sources. 9% of children have part time jobs whilst others receive gifts from grandparents or are paid for completing household chores. By far the single most popular way for children to earn extra cash is through completing a paper round.

The research shows that 1/3rd of children save for a special 'something' but the Halifax advises parents to help this grow by using a short term high interest savings account.

The Halifax commends the savings habit already being instilled in some of the youngsters today. They believe that this will stand youngsters in good stead for later life.

Whilst there are many children's savings accounts available, many including a range of freebies to encourage take up, long term savings plans focus around the government sponsored Child Trust Fund programme. This scheme provides all children born on or after September 1st 2002 with a voucher worth £250 (£500 for children from low income homes) to be invested until the child reaches 18. A further £250 (£500) voucher is available at age 7 and parents, family, friends or the child themselves can add an additional £1,200 per year to help the fund grow.

Whilst not suitable for short term savings (the account fund cannot be accessed until the child is 18), a Child Trust Fund is a tax efficient long term savings plan that helps teach children the value of investing for the future. There are a wide range of providers and options between investment types from shares and bonds to funds and cash. Changing between fund managers is an easy and straightforward process that enables parents to stay on top of getting the optimal return for their child.

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Jump Launches New Family Podcast With The Guardian

Fri, 12 Feb 2010 00:00:00 GMT

In a new initiative Jump, the leading Child Trust Fund provider, has teamed up with the Guardian to produce a family orientated podcast designed to touch every aspect of today's family life. Podcasts are becoming a popular way for people on the go to pick up information in a convenient format that can be listened to in a variety of ways. Podcasts can be downloaded and played on computers, MP3 players or mobile phones with the correct applications.

The new podcast will be presented by Miranda Sawyer, a Guardian columnist with the first edition being released in early February 2010.

Miranda is keen to emphasise that the new podcast will be aimed at all families, not just the middle of the road average 2.4 kids family. She says that the magazine format will aim to touch families of all sizes and to reassure them that they are not unusual.

The first edition included contributions from Education and Children secretary Ed Balls, Jay Rayner from the Observer and comedian Alan Davies. Balls talks about his family life, Rayner about food and Davies takes listeners through a selection of his favourite music tracks that help him to conjure up a happy family existence.

Although not covered in the initial podcast, family finances will be a topic for future releases. Amongst topics that may be covered are saving for children, including child savings accounts and Child Trust Funds.

The new podcast has been welcomed by James Frost, Marketing Director for Witan Investment Trust. He commends the link between Jump and the Guardian and believes that their quality editorial and technical expertise will help Jump to create a greater awareness of its savings schemes for children, including Child Trust Funds. With all children born since September 2002 having a Child Trust Fund account, looking at investment options to maximise returns for the long term financial future of their children will be a key area for information.

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Long-term Saving For Children Revolutionised By Child Trust Funds

Mon, 08 Feb 2010 00:00:00 GMT

Long-term saving for children has been revolutionised since the introduction 5 years ago of the Child Trust Fund. So claims the Children's Mutual, a leading Child Trust Fund provider.

In the five years since they were introduced, 2010 will see more than 5 million children having a Child Trust Fund account. Anyone born on or after September 1st 2002 will have automatically have received a voucher worth at least £250 to be invested until they are 18 by their parents. Children from lower income families will have received a £500 voucher. All children reaching the age of 7 also
receive a further voucher worth £250 or £500.

In making their claim, the Children's Mutual point to the fact that over half of all parents opening a Child Trust Fund with them have also taken out a monthly direct debit on the same day to increase the amount saved. Up to £100 per month can be saved on a regular basis and no more that £1,200 can be added in a full year. On a broader scale, 31% of all Child Trust Funds receive additional contributions from parents, family or friends.

Before the introduction of Child Trust Funds just 1 in 5 parents were saving for the long term financial future of their offspring.

Although parents can chose where to invest the vouchers, nearly 1 in 10 allow the government to make that option under the default provisions. But 75% do make a positive choice in the first year and get the funds working hard in an account of their choosing. That means that around 85% of all parents were making a choice of where to invest – compared with a take up rate of just 30% on ISA's and 40% for pensions products.

Around £22m is being added by parents to the Child Trust Fund accounts each month. The Children's Mutual estimates that this will generate around £2.74 billion by the time the children reach 18. They also show that around 50% of the government funding for Child Trust Funds is also reaching the 1.5 million lowest income families.

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Child Trust Funds On The Rise

Thu, 28 Jan 2010 00:00:00 GMT

Parents are signing up their children into Child Trust Fund accounts at an increasing rate. Recent figures released by HM Revenue & Customs show that an encouraging 71% of parents are actively enrolling their children into the child Trust Fund programme during the first year after birth. Parents who do not establish a Child Trust Fund with the initial £250 voucher available from the government within the first 12 months will have one opened for their child by the Treasury.

Children born on or after September 1st 2002 have been receiving an initial £250 voucher which can be invested for long term growth or income until the child reaches 18. As an additional benefit, children from low income families receive a £500 voucher at birth. All children receive a subsequent £250 or £500 voucher on their 7th birthday. In addition to the two vouchers, additional one off or regular payments can be made by parents, family or friends into the Child Trust Fund to help it grow over time in value.

According to John Reeve, Chief Executive of Family Investments, around £22m per month is being added to Child Trust Fund accounts by parents or others. All capital, dividend or interest income received is tax free within the account.

Child Trust Funds are long term tax incentivised savings accounts where the money invested cannot be withdrawn until the child reaches 18. Once the Child Trust Fund account is closed and the money becomes available for them to use as they choose, there are no restrictions on how the cash has to be spent.

There are a wide range of investment fund options available to parents and switching between them in easy and low cost. Equally, changing fund manager is an easy process too so whilst access to the money is not possible, making sure that it works hard for the 18 years it is invested is more easily achieved.

Amongst the latest Child Trust Fund Accounts to be launched is a joint initiative by the National Childbirth Trust and Family Investments where cash is donated to charity whenever a deposit is made into an account.

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Pocket Money In Exchange For Good Manners

Mon, 25 Jan 2010 00:00:00 GMT

The Government recently announced plans to make financial education compulsory for children aged five and upwards, therefore the sooner a child understands the concept of money - and later on, budgeting, saving, etc. - the better. That should not be a problem for most of children today, because according to research conducted by the Children's Mutual, a leading provider of Child Trust Funds in the U.K, they receive 83% more pocket money than their parents did. On average, children receive just under £3 a week and 27% of parents who responded to the Children's Mutual survey said that this amount was likely to increase by £1 each year.

In fact, the Children's Mutual has introduced a series of virtual online pets - known as "Pocket Money Petz" - to its website, to help children save and manage their pocket money. The Children's Mutual has picked up on the fact that 37% earn their pocket money by completing jobs around the house and 19% by looking after, or at least helping to look after, a family pet. Children can replicate the process online and in doing so, hopefully learn the basics of money management. This may also help the 44% of children who do not earn their pocket money, but are given it as a reward, or in some cases a bribe, for good behaviour.

The Children's Mutual survey also revealed that 16% of parents are concerned about the amount of money they are giving to their children, but nevertheless continue to do so because other parents are doing likewise. The Children's Mutual has therefore produced two pocket money guides, one for parents and one for children. The aim is to introduce children to the concept of money - earning, budgeting, saving, etc. - at an early age, through games, activities, etc, so they appreciate that money does not in fact grow on trees and are therefore perhaps, a little less demanding. By the same token, the parent's pocket money guide offers advice on how to teach children about money, when to start giving pocket money, for what and how much.

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Child Trust Funds Under Attack

Fri, 22 Jan 2010 00:00:00 GMT

Those who would like to see government spending reduced by having the Child Trust Fund scrapped, along with its initial £250 government voucher, might find that they are abolishing an increasingly successful way of encouraging a savings culture.

The Child Trust Fund (CTF) is a long-term children’s saving and investment account from which your child can withdraw money once they turn 18. The money is free from Income Tax and Capital Gains Tax and parents can deposit a maximum of £1,200 each year. To start the process, the Government deposits a £250 voucher and a further contribution when your child turns seven, with children in lower-income families receiving an additional £250.

Recent statistics from HM Revenue & Customs indicate that 71% of all parents opened a Child Trust Fund within the first year of their child's birth, with the universal granting of a Child Trust Fund Voucher perhaps a main reason for its continued popularity. John Reeve, CEO of Family Investments, the UK’s leading Child Trust Fund provider, notes that “[statistics show] that the initial Government Child Trust Fund voucher is an effective way to encourage parents to take the first steps to save for their children’s future. The success of the Child Trust Fund is engagement and the Government top up is a key factor in driving this.”

The argument against the Child Trust Fund has always been one revolving around unnecessary expense and the locking-up of resources, but a change in government policy now might mean adverse repercussions on the economic fortunes of generations to come. Reeve emphasises that the “groundbreaking savings initiative”, introduced by the Labour Government, means “every eligible child in the UK will now have a savings nest-egg once they reach age 18”. With Family Investment statistics demonstrating that a further £22m is added to Child Trust Funds by parents, family and friends each month, there is a good chance this nest-egg will be a sizable one.

Reeve asserts that the Child Trust Fund's success is indicative of a “burgeoning savings culture”, one which, if it continues to be encouraged, “will make an enormous difference to the social and economic fortunes of a generation”. Along with cultivating a savings mentality, the Child Trust Fund has aimed to ensure each child can reach adulthood with assets rather than the mere prospect of accumulating student debt.

Still, the Child Trust Fund is vulnerable, with Conservatives and Liberals tending to oppose it in favour of government cuts. And in the dregs of a recession, disapproval of the status quo - and any unnecessary government spending – has a palpable chance of trumping what has already proven statistically popular.

If you want your views on keeping the Child Trust Fund heard, why not contact your MP.

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Brand Club For Children Mutual

Fri, 22 Jan 2010 00:00:00 GMT

The Children's Mutual, a leading Child Trust Fund provider, has appointed customer relationship management consultancy Uber to create a virtual brand club for the parent and children customers.

The Children's Mutual, which specialises in family focused financial products, is chosen by 1 in 4 parents as the manager for their Child Trust Fund account.

The aim behind the branding exercise is to make the company really stand out from other providers and to be seen as the helping hand for advice for families and children as they grow.

Child Trust Funds are a growing and significant market. There are now over 4.4 million Child Trust Funds in existence and £2bn under management; the competition for managing those accounts and funds is intense.

Despite the uncertain future of the Child Trust Fund programme, the existing accounts will likely be continued until all have been paid out. Whilst Labour has committed to maintaining the programme, the Liberal Democrats and Conservatives have other plans for abolishing or scaling back what they see as an ill targeted long term and expensive programme.

The scheme entitles each child born after September 1st 2002 to be given a £250 voucher by the government to invest in a wide range of accounts until they are 18. A further £250 voucher is provided at age 7. Low income families receive a £500 voucher at each point. Additional contributions to the Child Trust Fund account can be made by anyone with an interest up to a maximum of £1,200 per year. Parents manage the investment until the child is 16 when they can take a more active role. Funds cannot be accessed until 18 but can then be used for any purpose.

The branding exercise to be undertaken by the Children's Mutual will target all 70,000 of their customers and the project should be completed by March.

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NCT And Family Investments Join Forces

Thu, 21 Jan 2010 00:00:00 GMT

Investment specialists Family Investments, which took over the Child Trust Fund (CTF) business of Abbey and Liverpool Victoria in 2009, has joined forces with leading parenting charity the National Childbirth
Trust (NCT), to offer the first Child Trust Fund run in association with a charity. The NCT provides support for parents through pregnancy, birth and the early days of parenthood and its supporters can take advantage of the new scheme, whereby the charity receives at least £35 for every Child Trust Fund opened. They also receive a voucher worth £25 if they choose to make deposits by Direct Debit.

Family Investments operates two Child Trust Funds, a Stakeholder Child Trust Fund and an Ethical Stakeholder Child Trust Fund. Both involve investment in stocks and shares, at least for the first 13 years of the scheme, but the Ethical Stakeholder Child Trust Fund closely follows the FTSE4Good Index Series, designed to facilitate investment in responsible companies. There are some 4.5 million Child Trust Funds in operation in the U.K. and Family Investments is a leading provider, with over 1 million funds under its control.

Child Trust Funds are available in cash, shares and stakeholder versions. Cash is a safe, but not particularly rewarding, option, while exposure to the stock market for the full 18 years of the scheme can be a risky business; the stakeholder option, where money is gradually moved away from shares into less risky investments in the last 5 years, is therefore often an acceptable compromise. Children born on or after the 1st September 2002, initially receive £250 (£500 if they are from an underprivileged background) from the Treasury, plus a matching payment shortly after their seventh birthday. Parents, relatives and friends can deposit up to £1,200 a year into a Child Trust Fund until a child reaches 18 years of age and returns on investment are tax-free.

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Investing For Children Future

Wed, 20 Jan 2010 00:00:00 GMT

There is any number of savings and investment vehicles for children, but before choosing one in preference to another, parents need to consider what risk they are willing to take or their "risk appetite". A cash savings account or Child Trust Fund (CTF) for example, carries very little risk, but by the same token, typically returns less than an investment in bonds property or shares. An investment in shares represents a higher risk, not least because the stock market is liable to wild fluctuations in the short-term. In the long-term however, returns are higher than those on cash investments. There are of course, very risky single company or single country share investment opportunities available through Child Trust Funds and other investment schemes for those with a healthy risk appetite.

There can of course, be no guarantee of returns on an investment in shares, therefore parents wishing to limit their exposure to the stock market may like to consider what is known as a "stakeholder" Child Trust Fund. Essentially, money deposited into a stakeholder Child Trust Fund is invested in a portfolio of shares initially, but five years before the scheme reaches maturity, money is gradually moved into lower risk investments.

Similar to a cash or shares Child Trust Fund, a stakeholder Child Trust Fund offers tax-free growth on savings up to £1,200 a year deposited by parents, friends or relatives. Children receive £250 from the Treasury to start a fund and a further payment of £250 when they reach 7 years of age. The contents of the fund belong to the child however and can only be accessed when he or she reaches 18 years of age. On the plus side, this means that the money cannot be frittered away before the fund reaches maturity and so provide a "nest egg" with which to begin adult life.

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Pocket Money Average Rises

Tue, 19 Jan 2010 00:00:00 GMT

Prime Minister Harold Macmillan told Britain, "You have never had it so good" back in the Fifties, but these days it is British children who have never had it so good, if research by the London School of Economics is to be believed. According to the LSE, the pocket money paid to children has increased by nearly 500% - or more than five times the rate of inflation - from £1.18 a week to £6.84 in the past 23 years.

The Tunbridge Wells Equitable Group, which trades as the Children's Mutual, has also conducted research into pocket money trends in the U.K. It appears that pocket money is now being used to reward children for the sorts of behaviour that would have been expected as a matter of course in years gone by. Almost 50% of children receive pocket money for good behaviour although, encouragingly, over 33% receive pocket money for completing jobs around the house, while 20% receive cash for finishing their homework on time.

In fact, today's children have more spending power than ever before and that is hardly surprising, with children spending £6,000 on average, between their seventh and fifteenth birthdays according to LSE figures. Children aged between seven and ten receive just under £5 a week on average, but this rises to over £10 a week if gifts and part-time jobs, such as paper rounds, are taken into account.

The Children's Mutual is one of the leading providers of Child Trust Funds in the U.K. The Child Trust Fund is a savings and investment product for children. Children born on or after 1st September 2002 receive £250 from the Treasury when their parents register for Child Benefit, plus a further £250 when the child reaches seven years of age. Parents, relatives and friends can deposit up to £1,200 per year into a Child Trust Fund until the child reaches 18 years of age and returns on the investment are tax-free.

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New Website To Help Save Pocket Money

Mon, 18 Jan 2010 00:00:00 GMT

The Children's Mutual, which operates 25% of the Child Trust Funds in the U.K. - a total of over 750,000 - has conducted research into pocket money and found that children today, receive 83% more than their parents did. According to the Children's Mutual, 19% of children receive money for helping to look after a family pet, 37% for carrying out routine tasks around the house and 44% for good behaviour. This may come as a surprise to parents who subscribe to the philosophy that good manners and proper behaviour are expected, regardless of any financial reward.

In fact, the Children's Mutual has picked up on the pet theme and has introduced a number of online pets, known as "Pocket Money Petz", to its website to help children learn about pocket money and savings. The Child Trust Fund is an excellent vehicle for saving for children, but as contributions are made by parents, relatives and friends rather than by the child, it can be useful to have a tool to which children can relate more readily. By performing tasks to look after their pet, children can earn money and hence learn to equate the amount they earn to the frequency, duration and difficulty of the task.

The Children's Mutual has also produced pocket money guides, one for parents and one for children. Many parents find it difficult to know how much pocket money to give to their children and how often, therefore the parents' pocket money guide offers helpful advice on these and other pocket money issues. The children's pocket money guide is a simpler, more colourful publication, with games and activities intended to capture a child's imagination. Nevertheless, it provides sound advice on budgeting, saving, etc. that will last all of their lives. A Child Trust Fund is one thing, but when it matures, children should already be used to dealing responsibly with money.

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London Children Have Highest Savings

Fri, 15 Jan 2010 00:00:00 GMT

More evidence of the North South divide was produced recently as it was shown that children in London have the highest average savings
of any region in the UK.

The research, conducted by the Halifax Building Society amongst its child savings accounts, identified that the borough of Harrow had the highest capital amount saved by under 16 year olds at £2,122. The average for the whole of London is £1,380 whilst those in Scotland have just £875 invested on average. The UK average is £1,064.

The Halifax reported in late 2009 that more students than ever are looking for financial support from the government to help them with funding their further studies after leaving school. This was one of the reasons that the government introduced the Child Trust Fund programme in 2005 to help parents save for the future in a tax efficient way.

Under the programme all children born since September 2002 has received a £250 voucher with which to open a long term, tax free savings account. An additional voucher worth a further £250 has recently been paid to all reaching their 7th birthday. Children from low income families receive vouchers worth £500.

In addition to the vouchers, further contributions can be made by anyone into the Child Trust Fund up to a maximum of £1,200 per annum. Regular monthly contributions of up to £100 can also be made but the aggregate additional amount paid in cannot exceed £1,200 per year.

The funds cannot be accessed until the child reaches 18 but there is a great deal of flexibility on offer as to how the funds are invested and with whom. Parents can change fund managers very easily and also switch between cash investments and more adventurous share, fund or bond holdings.

In addition to their own savings, a tax free amount accumulated under the Child Trust Fund scheme can hold those reaching 18 from 2020 onwards. A combination of instant access and long term tax free savings plans can be a good recipe for helping with future financial planning.

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Primary Schools To Teach Money Lessons

Thu, 14 Jan 2010 00:00:00 GMT

Ed Balls, the Secretary for Children, Schools and Families, has announced that all primary school children are to be given compulsory lessons on how to manage their finances.

Lessons will start in September and will include teaching the youngsters how to save using a piggy bank before moving on to educate them about current and savings accounts. They will also include lessons on how to budget and save.

This latest initiative follows a series of schemes designed to help youngsters and their parents plan for their financial futures. The most notable scheme was Child Trust Funds which were introduced in 2005 but expanded to cover all children born since September 2002. Under the Child Trust Fund programme each child received a £250 voucher to be invested by their parents until they reached 18. Children from low income families received a £500 voucher. In addition to this government handout, parents, family or friends could contribute a further £100 per month as a regular payment or £1,200 per year through a combination of regular or ad hoc payments.

Whilst the cash may be tied up for a long period, the Child Trust Fund scheme is very flexible on how cash can be invested and very portable between different providers. Options range from deposit like accounts through to being able to invest in shares, bonds or funds.

Once the child reaches 16 they can take more control over how the Child Trust Fund is invested but any money cannot be accessed until they reach 18. At that time, any accumulated value can be used for any purpose.

Under the curriculum changes announced by Balls, young children between 5 and 7 will be taught to differentiate between different coins and notes. Those between 7 and 11 will get lessons on financial planning and budgeting and on how to manage a bank account.

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Desperate Parents Raid Children's Piggy Banks

Thu, 14 Jan 2010 00:00:00 GMT

The financial pressures of the recession have finally hit home to children's savings accounts. New research conducted just before Christmas has shown that 1 in 5 parents have raided the children's savings accounts to help out with family finances with 44% of them having taken between £200 and £500.

There is some evidence to show that as much as £5,000 has been taken during the past 18 months to help offset the effects of the recession. Most parents said that they had borrowed to pay regular bills but 20% said that they had dipped in to pay for an unexpected car repair and 14% to pay for a family holiday.

The research, conducted by Engage Mutual, also shows that 82% of parents intended to repay the money as soon as they could.

Nearly 60% of adults also said that their financial position was much weaker than 18 months earlier and found themselves dipping into children's savings because they were desperate.

Saving for the future was at the heart of the Child Trust Fund scheme launched by Gordon Brown in 2005. At that time he announced that all children born on or after September 1st 2002 would receive a £250 voucher to be invested until 18. As a second boost to the Child Trust Fund scheme the government also introduced a further £250 voucher available at age 7.

Once invested, the cash in a Child Trust Fund cannot be accessed until the child reaches 18 meaning that parents cannot dip in to the account to help out with family finances in times of hardship. However, they can save a further £1,200 per year on top of the two vouchers to help the Child Trust Fund grow into a sizeable tax free nest egg.

The Engage Mutual research showed that 30% of parents felt really guilty about dipping into the child's saving account and 60% said that they had worries over their child's long term finances. Investing in a Child Trust Fund can alleviate these problems for the future.

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Low Interest Affects Child Savings

Wed, 13 Jan 2010 00:00:00 GMT

Interest rates offered on child savings accounts have plummeted by 74% in the past year. According to financial website MoneyExpert.com, the average interest rate available on instant access children's savings accounts is just 1.1% compared to 4.64% this time last year. Only Bath Building Society offers a 5% rate of interest on the first £500 invested. The next best rate on offer is from Holmesdale Building Society at 2.7%.

But children are not able to benefit from the top 10 accounts on offer - all are available only to adults over the age of 16.

Pierre Williams, head of research for MoneyExpert.com recognises that rates have fallen during the past year as a consequence of the financial crisis. But he bemoans the fact that children's accounts have been the worst hit of all. He says, "It is a real shame, given that we are trying to instil in our kids the value of saving for a rainy day".

Encouraging financial awareness was one of the reasons that the government introduced the Child Trust Fund in 2005, backdated to cover those born since September 1st 2002. A Child Trust Fund is an 18 year tax incentivise savings account supported by two contributions of £250 from the government - one at birth and the other at age 7. Children from low income families get a £500 voucher to be invested at birth and 7 if they meet the relevant criteria.

In addition, parents, family or friends can invest up to £100 per month as a regular saver or ad hoc contributions up to a maximum of £1,200 in total. Whilst Halifax is currently offering a Children's Regular Saver account at 6% in return for at least £10 per month contributed, a Child Trust Fund can invest in stocks and shares and funds which offer potentially greater returns as the economy recovers. Child Trust Fund accounts can have their balance switched into different forms of investment at any time meaning that savvy parents can make the most of shares and fund prices in a bull market and deposit rates in a bear market.

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Young Savers Not Getting Enough

Tue, 12 Jan 2010 00:00:00 GMT

Banks are doing little to appeal to children when looking for a home for their Christmas savings. Many offer just a miserable 5p per hundred pounds saved per year - well below the rates that are offered to adults for similar instant access products.

An example is Cheltenham & Gloucester, owned by taxpayer funded Lloyds Banking Group, where the 0.05% rate is offered on its poorly named 'Young Investor Account'. An adult with one of their Gold passbook accounts can earn 1.9% before tax - a huge increase on that available to children. But the account is only available to those over 16 years of age.

All children have their own personal tax limit of £6,475 - but very few are in a position to use it. Therefore, any account opened in a child's name should have a form R85 completed and returned to the bank or building society which enables them to have any interest paid gross; that is before the deduction of any tax.

Whilst there are many opportunities for saving, the government launched a Child Trust Fund scheme in 2005 that subsidised a tax free long term savings account for children. Anyone born on or after 1st September 2002 has a Child Trust Fund and with it a £250 voucher from the government that can be invested in a wide range of accounts. In addition, children upon reaching 7 get a further voucher worth £250 to be invested in the same account. Any adult, including parents, family or friends can make further additions to the account up to a maximum of £100 per month or £1,200 per year.
Child Trust Funds cannot be accessed until the child reaches 18 so are less flexible but they do offer the opportunity to invest in stocks and shares as well as ordinary deposit like accounts. Accounts can be switched from one provider to another or investments changed over time to take advantage of different investment risk appetites.

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CTF Not Working For Poorer Families

Mon, 11 Jan 2010 00:00:00 GMT

The success of the Child Trust Fund Scheme has been largely confined to wealthy families, according to the Conservative Party. Research has shown that 80% of parents in affluent areas have claimed the Child Trust Fund vouchers whilst those in the most deprived areas, such as Bradford West, where only 57% of parents claim the initial £250 voucher. Over a quarter of all children in Bradford West live in deprived households and would more than likely qualify for the enhanced £500 voucher available to low income families.

When initially launched in 2005, Chancellor Brown (as he then was) described the scheme as one which would, "enable all young people to have more of the choices that were once available only to some". The 10 poorest regions, where 39% of children live in deprived households, have a take up rate of 69% whereas in the 10 wealthiest regions, where less than 4% of children live in deprived homes, the application rate is 83%.

Although introduced in 2005, Child Trust Funds were back dated to cover any child born on or after September 1st 2002. Each child received a voucher worth £250 to be invested until they reach 18 in a range of funds or deposit like accounts. Children from low income families were entitled to a £500 voucher. If a parent didn't claim and invest the voucher in the first year of the child's life then the funds were automatically allocated to a stakeholder fund by the Treasury. The government also introduced a further voucher for £250(£500) for all children upon reaching 7.

In addition to the lower take up, poorer families also invest less into the Child Trust Fund accounts for their offspring. The poorest regions invest an average of £225 compared to parents in London who invest £368 per year. Up to £1,200 can be invested tax free each year under the scheme.

If the Conservatives are elected into Government they have already stated that they would abolish Child Trust Funds for all but the poorest third of families. They claim that this will better target the benefit towards those that really need it.

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Five New Years Tips for Children’s Savings

Thu, 07 Jan 2010 00:00:00 GMT

New Year’s is often a perfect time for making resolutions to keep as the new year begins, and leaving behind old habits. This year, why not resolve to spring into action and do as much as possible to build up your child’s nest egg? To get you started, here are five New Year’s tips for saving for children:

1. Don’t forget to invest your Child Trust Fund voucher.
Parents of children born on or after 1 September 2002 all receive a £250 voucher from the government to open a Child Trust Fund account, into which family and friends can deposit up to £1,200 a year tax-free until the child is 18. Many parents have yet to invest the voucher, which expires after 12 months. If you do not open a Child Trust Fund account before your voucher expires, the government will open a stakeholder Child Trust Fund account for your child – so it is best to make sure you invest it as soon as possible, in order to have full control over which account your child’s savings are kept in.

2. Keep an eye on your child’s savings account.
Use online comparison tables, like those at MyEggNest.com. Comparing the past performance of each provider, along with the various interest rates they currently offer, may influence your opinion on which type of account (and with which provider) is best for your child. Many parents don’t realise that they can change Child Trust Fund providers – or the type of savings account they invest in – if they are not happy.

3. Double-check you are claiming all governments benefits available to you.
There are a variety of benefits available for all parents – the Health in Pregnancy Grant (a one-off payment of £190 for anyone at least 25 weeks pregnant), not to mention Child Benefit. You may also be able to claim Working Tax Credit, which offers help towards the costs of childcare if you qualify for the childcare element. In addition, Childcare Vouchers allow you to allocate a portion of your salary to childcare costs, with no tax or National Insurance charged on the amount.

4. Look into other savings account options.
While Child Trust Fund accounts can only be opened by someone with parental responsibility for the child, grandparents might be able to help build up their grandchild’s nest egg with a Unit Trust Account or Tax-Exempt Savings Plan. A Unit Trust Account allows the trustee to set up an account in their name for the benefit of the child as beneficiary, while Tax-Exempt Savings Plans provide a simple and tax-free way to save up to £25 for each family member per month.

5. Earn free money with cashback shopping.
As the saying goes, “those who look after the pennies, look after the pounds”! Every little bit counts when it comes to saving money to add to your child’s account, and sometimes taking small steps to spend wisely can go a long way. Cashback shopping programmes are a great way to earn free cashback for your child’s savings account through online shopping. Registering with websites such as Kidstart.co.uk or CTFCashback.co.uk takes only a few minutes, and any relative or friend can set up an online account to contribute to your child’s savings. The free cashback you receive from hundreds of online retailers is deposited straight into your child’s account, and shopping with cashback clubs costs no more than it would have cost you anyway.

As you can see, building up your child’s nest egg can go beyond simply setting up a Child Trust Fund account. Keeping an eye on the best account options for your child’s savings, and taking steps to spend wisely in everyday life, can go far towards starting off the new year on a smart and money-savvy foot.

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Child Beneft Rises

Fri, 18 Dec 2009 00:00:00 GMT

The electioneering has already begun for the hearts and minds, or more importantly the votes, of the British electorate. Alistair Darling, the Chancellor of the Exchequer, announced that he was to bring forward a rise in child benefit payments to April 2010 rather than April 2011 as previously announced.

The inflation busting announcements not the first time that Labour has introduced tempting offers to parents before an election. In 2001, just a couple of months before the crucial election at the time, they announced the introduction of Child Trust Funds with £250 to be given to every newborn child. However, it then faltered on the proposals and it wasn't until April 2005 that they actually introduced child trust funds - which happened to be one month before the general election of that year.

Since that date over 4.5 million child trust funds have been set up with around a third receiving regular top ups from parents, family or friends. Top ups can be made up to £1,200 per year in either regular monthly payments or as single contributions or both. The child trust fund account will grow tax free until the young adult reaches 18 when the account is closed and the funds can be used for any purpose.

The government has repeatedly committed itself to the programme and recently introduced a further £250 voucher for all children on their 7th birthday. Low income families (currently those with household incomes below £17,000) receive a £500 voucher at birth and at 7. There are a wide range of fund options available from bearing interest type deposit accounts through to funds investing in stocks and shares or bonds.

The Conservative and Liberal Democrat parties have different plans for the child trust fund programme. The Conservatives would change the scheme to low income families or those with a disabled child. The Liberal Democrats have said that they would stop the scheme and use money now to enhance family benefits.

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Child Trust Funds Are They Worth Saving

Thu, 17 Dec 2009 00:00:00 GMT

With the debate over the financial future of the country raging, the two main contenders to take over from Labour as the government have already laid their cards on the table regarding the future of the child
trust fund programme. The Conservatives have said that they would limit the scheme to low income families (currently defined as household earnings below £17,000 per annum) or for those with a disabled child whilst the Liberal Democrats have said that they would abolish the programme completely and use the funds elsewhere in education and benefits.

But with Child Trust Funds now passing their 7th birthday, perhaps it is possible to ask the question of whether they have been a useful means of improving savings and investments for children.

The answer from Kate Moore, head of savings and investments at Family Investments, says that yes, they have helped families save more for the future. By creating an environment that encourages savings, she says that the child trust fund scheme is clearly achieving that goal with over 11 million adults contributing to 4.5 million child trust fund accounts. More than £22m is being invested every month into a third of all active accounts.

Ms Moore also believes that the existence of the scheme encourages parents and children to be more financially aware and will improve financial literacy in future generations.

Danny Cox, head of advice at Hargreaves Lansdown, takes the opposite view. He says that the aims of the child trust fund scheme are laudable but simply gifting a sum to an 18 year old when they have had no involvement in its generation does little to help improve financial literacy. He argues that more should be done through the National Curriculum to get children aware of finances and options. He also says that the government contributions of £250 at birth and age 7 are too small to get the industry interested or to cover the advice costs that would be necessary to make it work efficiently.

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Child Trust Funds For All

Wed, 16 Dec 2009 00:00:00 GMT

In comments that pre-empted the Budget speech made by Alistair Darling, the Prime Minister, Gordon Brown told MP's that he fully supports the concept of saving for children. He also commented that he failed to understand why opposition parties had not identified with the success of the Child Trust Fund programme.

Both Conservative and Liberal Democrat parties have identified the child trust fund scheme as one that would be targeted for savings if they were to be elected to office in the forthcoming general election. Their plans range from abolishing the programme all together to restricting the benefits to those with family incomes below £17,000. Mr Brown said that savings for all youngsters should be encouraged regardless of the financial status of their parent's.

Martin Shaw, general secretary of the Association of Friendly Societies agrees with Mr Brown. He echoes the sentiment that the child trust fund scheme has encouraged parents and grandparents to save for the financial futures of their children with recent research confirming that the level of saving has increased threefold.

Child trust funds were introduced in 2005 but backdated to cover all children born on or after the 1st September 2002. Each child received a voucher worth £250 (or £500 for those from low income families) which could be invested in a wide range of newly developed tax free funds until the child reached 18. Parents, family or friends could make additional contributions of up to £1,200 per year in either regular monthly contributions or ad hoc payments. The government introduced a further voucher worth £250 (£500) when the child reached 7. Funds cannot be accessed until the child reaches 18 but all interest, dividend or capital growth remains tax free.

Parents can easily change the way that funds are invested or the manager of the plan at any time.

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Child Benefits Maximise While They Exist

Tue, 15 Dec 2009 00:00:00 GMT

Childcare vouchers, childcare tax credits and the Child Trust Fund scheme are currently methods that parents can use to pay, at least in part, for childcare and to put money aside for their children when they reach adulthood. It appears however, that all of these schemes will cease to exist in their current form after the next General Election, regardless of which party takes power.

Prime Minister Gordon Brown, worried that higher-rate as well as basic-rate taxpayers are benefiting from the scheme, has already said that he wants to replace childcare vouchers with funding for nursery places instead. His current position is that companies currently issuing childcare vouchers can continue to do so until 2015, but no new companies will be allowed to join the scheme after April 2011. The scheme currently saves a higher-rate tax payer, claiming the maximum £55 per week, £1,196 per year in tax and national insurance costs. Of course, if Labour fail to win the election, as seems likely, Mr. Brown will have no say in the matter, but the Conservative Party has made no firm commitment to the continuation of the scheme.

The Conservative Party has also said that it will reform tax credits, so that families whose income exceeds £50,000 per annum cannot claim for childcare and deny access to the Child Trust Fund scheme for those earning over £16,000 per annum. The Child Trust Fund scheme, introduced in 2005, allows parents and other relatives to contribute £1,200 per year to a fund, held in cash or shares, until a child reaches 18 years of age and until then, all returns are tax-free. The Treasury makes a contribution of £250 to start the fund and again when the child reaches 7 years of age. Conservative proposals would effectively wreck the Child Trust Fund industry, because only a third of the 750,000 children born in the U.K. each year would qualify for the scheme.

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CTFS Different Methods Of Investment

Mon, 14 Dec 2009 00:00:00 GMT

The Child Trust Fund , originally introduced in 2005, has become a popular method of providing children with a financial "nest egg" when they reach adulthood, not least because of Treasury contributions and tax benefits. Children born after 1st September 2002 receive £250 (or £500 if they come from a low income family) to start a Child Trust Fund and a further payment of £250 or £500, when they reach 7 years of age. Parents, grandparents, etc. can contribute up to £1,200 per annum to a Child Trust Fund, which remains exempt from Income Tax and Capital Gains Tax until the child reaches 18 years of age.

Over £2 billion is invested in Child Trust Funds across the U.K. and monthly contributions, in total, amount to £22 million. There are however, different types of Child Trust Fund for parents to choose from, depending upon their preferences as investors. Cash is the safest, but also typically the least lucrative of the options, while shares or equities can be highly lucrative - the FTSE 100 index has risen 50% since the spring of this year - but nevertheless, expose the fund to the volatility of the stock market. The fact that the Bank of England has maintained the Bank Rate at a record low of 0.5% since March 2009, has adversely affected interest rates on saving accounts, while practical constraints or inexperience may mean that the stock market is not suitable for all investors.

The third option, a stakeholder Child Trust Fund, is the choice of 68% of parents and represents an acceptable compromise between cash and shares. Money is initially invested in a number of companies, in accordance with Government regulations, but when your child becomes a teenager, money is gradually moved to lower risk investments or cash, so the fund is protected against losses as it approaches maturity.

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Children Funds Have Money Boost

Fri, 11 Dec 2009 00:00:00 GMT

Every child born in the U.K. on or after 1st September 2002 receives a voucher worth £250, or £500 in the case of disabled or disadvantaged children, from the Treasury to open a Child Trust Fund account. However, thanks to a scheme known as "Child Trust Fund Cymru", children born in Wales between 1st September 2002 and 31st August 2004, who already have a Child Trust Fund account, are also eligible for an additional payment of £50 or £100. A total of £2.5 million has been set aside by the Welsh Assembly Government in 2009/10 and 2010/11 as part of an overall strategy to tackle child poverty and improve opportunities later in life. The increase in funding comes at a time when, according to the latest figures from HM Revenue & Customs, Wales is lagging behind England and Scotland in terms of average contributions to Child Trust Funds.

Introducing the Welsh premium, Social Justice Minister, Dr. Brian Gibbons, said that he hoped that the extra payments would not only provide assistance for families who need it most, but that Child Trust Funds generally, would encourage investment in the future of Welsh children, regardless of Government contributions. Parents, relatives and friends can contribute up to £1,200 a year over and above Government contributions and any growth of the fund is exempt from Income Tax and Capital Gains Tax until a child reaches the age of 18, when he or she can access the money.

Approximately 64,000 Welsh children are eligible for an extra payment - 12,000 for £100 and 52,000 for £50 - according to the Welsh Assembly Government. Application forms are available from local education authorities or direct from the Government itself, for children schooled outside the local education authority. The return of application forms by the end of December would ensure payment by the end of March, the Welsh Assembly Government said.

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The Children Mutual Says Children Unaffected By Recession

Thu, 10 Dec 2009 00:00:00 GMT

The recession, which the U.K. entered officially in January 2009, is unlikely to affect the amount of money spent on Christmas presents for children this year, according to The Children's Mutual. In fact, research commissioned by the leading Child Trust Fund provider in the U.K. revealed that children will receive £4 billion worth of presents - at an average of £380 per child, an increase of 20% on last year - and £960 million in cash this Christmas.

Chief Executive of The Children's Mutual was delighted at the news, but was also keen to point out the benefits of investing for children in the long-term, as well as the short-term. The Child Trust Fund scheme allows parents, relatives and friends to collectively invest up to £1,200 a year on behalf of a child every year until the child reaches 18 years of age. Child Trust Funds typically receive an increase in contributions of 25% during the Christmas period as parents ask that money be invested on their child's behalf.

This type of gift may not have the immediate appeal of a bulging Christmas stocking, but contributions - including contributions of £250 or £500 from the Government at the start of the fund and again when a child reaches 7 years of age -can be held as cash or shares and grow in a tax-free environment. It is not difficult to see how a proportion of money spent on Christmas presents, which may not last very long, invested in a Child Trust Fund for the first 18 years of a child's life can ultimately provide a gift that will last far into adulthood. The ability to raise a deposit for a home or pay off a student loan for example, at an early age could be the best Christmas present that your child ever receives.

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CTFS Might Not Reach Full Potential If Limited

Wed, 09 Dec 2009 00:00:00 GMT

The Child Trust Fund scheme was introduced in 2005 as universal savings scheme for children. Every child born on or after 1st September 2002, qualifies for a Child Trust Fund and there are now over 4.5 million in the U.K., with a total annual investment of £278 million. In less than 5 years, the Child Trust Fund scheme has proved hugely successful, allowing an entire generation to start life with a financial asset that matures as they do and in which they have some say from the age of 16 onwards.

Nevertheless, if shadow chancellor George Osborne has his way, a promising start for what was intended after all, to be a long-term savings product may come to nought for all but the lowest income families. Mr. Osborne proposes to deny access to the Child Trust Fund scheme to families with an income of over £16,000, which effectively means that thousands of ordinary, average income families - and two-thirds of the 750,000 children born in the U.K. each year - could miss out.

Critics of Mr. Osborne's proposal argue that the full socio-economic benefits of the Child Trust Fund scheme can only be realised by long-term commitment to it; the first Child Trust Funds are not due to mature until 2020. The scheme must be universal to encourage good financial habits for everyone, with no stigma attached to receiving Treasury contributions, they say and changes to the structure - allowing parents to contribute £1,200 a year, as at present, but with no Treasury contributions, for example - would only weaken the savings culture that it was intended to promote. The Child Trust Fund scheme, as it stands, is also a valuable teaching tool when it comes to financial education in schools but its usefulness depends once again, on it being universally available.

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Children Should Know More About Savings

Tue, 08 Dec 2009 00:00:00 GMT

According to The Children's Mutual - the leading provider of Child Trust Funds in the U.K. with over 725,000 accounts - children typically start to form ideas about the value of money and the concept of saving, as well as spending, at around the age of 7 years. This is the time when parents should introduce pocket money, either as a weekly allowance or as a reward for undertaking household tasks, so that children can learn that they will not always immediately have enough to pay for everything they want and be introduced to the concept of "earning" money, at a rudimentary level. Children in the U.K. spend £13.10 a week on average, with £6.84 a week - a 500% increase since the late Eighties, compared with an increase in the total rate of inflation of less than 100% in the same period - coming from their parents, so the encouragement of healthy financial habits from an early age can benefit children and their parents in the years to come.

In fact, a simple explanation of a Child Trust Fund could be used to illustrate the benefits of regular saving to a child. Every child born in the U.K. after 1st September 2002 - not coincidentally also the start of the school term - receives an incentive of £250 from the Treasury to start a Child Trust Fund when its parents register for Child Benefit and an additional payment of the same amount at the age of 7 years. Aside from the Treasury contributions, parents and other relatives can contribute £1,200 a year into a Child Trust Fund, until the child reaches the age of 18 years. A child may not be willing to wait that long to access his or her own savings, but if he or she knows that a Child Trust Fund is already in operation it may encourage saving on a smaller scale.

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Help Your Child Become A Millionaire

Mon, 07 Dec 2009 00:00:00 GMT

The cost of bringing up a child in the U.K. from birth to maturity is just over £43,000 according to a recent survey, so it is understandable that saving for a child's future is not the number one priority for parents. However, the introduction of the stakeholder pension in 2001 allowed anyone to pay up to £3,600 a year or £300 a month - actually £2,880 a year or £240 a month, because of tax relief on contributions - into a pension scheme for a child, without reference to their income. This level of contribution between birth and 16 years of age could, at an annual growth rate of 6% and subject to administration charges of 1.5% of the fund in the first 10 years and 1% thereafter, provide a pension fund of £1.2 million at the age of 55, regardless of any further contributions.

Money invested in a pension scheme cannot of course, be accessed until the "child" in question reaches 55 years of age, but the idea is that once a child reaches adulthood, he or she faces less pressure to make personal pension contributions and can use surplus income for more immediate concerns, such as paying off a student loan or raising a deposit for a home. The timescale involved may not be suitable for everyone however and a Child Trust Fund which is tax-free and can be accessed only by the child and even then, only when he or she reaches 18 years of age, is another alternative. In fact, each child born in the U.K. after 1st September 2002, receives a voucher worth £250 from the Treasury to start a Child Trust Fund and an additional payment of the same amount shortly after his or her seventh birthday. Parents, grandparents, etc. can collectively contribute £1,200 a year to a Child Trust Fund, not including Treasury contributions and the fund is exempt from Income Tax and Capital Gains Tax until the child reaches 18 years of age.

Contacts

Please contact Steve Weisner for a FREE Consultation on how to set up a Children's Stakeholder Pension.

Steve Weisner
Independent Financial Adviser
Radcliffe & Newlands
5th Floor Crystal Gate
28-30 Worship Street
London
EC2A 2AH
Email: SWeisner@myeggnest.com
Tel: 020 7382 0437
Read about Steve

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New Childrens Mutual Advert Features Babies In Grown Up Jobs

Mon, 30 Nov 2009 00:00:00 GMT

What did you want to be when you were younger? A doctor, a pilot, a flight attendant? The Children’s Mutual’s new advert, ‘What I Want To Be’, features babies mimicking common professions in a production that made use of Japanese puppetry techniques - and budding actors that absolutely loved getting stuck into the dirty jobs that make up the daily grind of many adults.

The Children’s Mutual champions families and understands the aspirations of parents and children – so they thought they’d have some fun showing the things kids may get up to when it’s time to enter the adult world. The idea came when eCommerce Manager Nathan witnessed his friend, Martin, do a quickfire jobs demonstration by puppeteering his daughter’s arms and hands to mimic common jobs such as chef, percussionist and accountant. Babies mimicking grown-ups, surely a winner! With appropriate apologies to Martin, Nathan nicked the idea and went to Production International to produce the advert with the online team in tow.

Director Steve, a puppeteer as well as a director, suggested using a western take on a Japanese puppetry technique called Bunraku – whereby puppets (or in this case babies) and props are controlled by guys in black suits and hoods, operating on a black background so they can barely be seen. This way all of the attention is on the babies and props making it look like they are in full control.

Six babies were used in the shoot, four boys and two girls and they were aged between seven and eleven months on the day. They were handpicked from Scallywags casting agency, bar one, who is the son of an employee of The Children’s Mutual. Luckily the babies were in good spirits all day and were natural performers. All of the babies had at least one chaperone, and in most cases both parents attended the shoot.

The team managed to rattle through 14 of the 16 planned jobs and life events in a lively day from 9.30 am until 4.30 pm. The babies loved performing and the crew and representatives from The Children’s Mutual loved watching them perform even more. Babies came and went, numerous nappies were changed, faces wiped, feeds administered, naps taken in the quiet room, whilst all the time the shoot continued and the director bonded and worked with the babies in a serene manner.

The end result is a compilation of babies transplanted into the daily grind a range of professions, which provides comic relief and nostalgia for the days of one’s own pipe dreams – and perhaps a reminder that the power to ensure your own child’s opportunity to pursue their aspirations is in your hands.

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Parent Child Trust Fund Take Up Still Thriving

Fri, 27 Nov 2009 00:00:00 GMT

_{^{In their annual Child Trust Fund Statistical Report http://www.hmrc.gov.uk/ctf/statistical-report-2009.pdf the Government reports that parental CTF take-up increased marginally by 1% (from 73% to 74%) during 2007-08. The number of Child Trust Fund vouchers issued in the year up to April 2009, however, was 823,504 – or 70,000 a month. Parents opened 552,438 accounts directly on behalf of their children and HM Revenue & Customs opened a further 211,366 accounts where vouchers issued in previous years had expired.

In their annual Child Trust Fund Statistical Report http://www.hmrc.gov.uk/ctf/statistical-report-2009.pdf the Government reports that parental CTF take-up increased marginally by 1% (from 73% to 74%) during 2007-08. The number of Child Trust Fund vouchers issued in the year up to April 2009, however, was 823,504 – or 70,000 a month. Parents opened 552,438 accounts directly on behalf of their children and HM Revenue & Customs opened a further 211,366 accounts where vouchers issued in previous years had expired.

The Child Trust Fund is a long-term savings and investment plan set up by the Government to encourage parents to save for their children’s future. Available to all children born on or after 1 September 2002, parents receive an initial £250 in vouchers to open their account, with a further £250 when their child reaches seven. In addition, parents, family and friends can contribute up to £1,200 to the Fund each year.

Although opening a CTF is a relatively straightforward procedure, choosing the right one for you can be more difficult. There are three types of accounts (cash, stakeholder or shares) available from numerous banks and building societies each with their own offers, terms and conditions and rates. In fact, during the last year alone (to April ‘09), there was an increase in CTF providers from 49 to 71.

With so many CTFs available, parents are often left confused. Research has shown that many are simply overwhelmed by the sheer amount of information available. MyEggNest.com on the other hand is an invaluable resource for parents, providing easy to understand comparison table of the three types of Child Trust Funds: Cash, Stakeholders and Equity (or Shares).

Joe Luong, MyEggNest MD, says, “Our feedback has shown that many parents are simply overwhelmed by the amount of information available from various financial bodies regarding Child Trust Funds. What parents really need is clear, concise information so they can make an easy comparison. MyEggNest.com enables them to effortlessly research everything they are likely to need from one reliable source.’}}

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Families Encouraged To Save With Child Trust Fund

Thu, 26 Nov 2009 00:00:00 GMT

The Children's Mutual has reiterated its plea to parents to open Child Trust Fund accounts for their offspring if they are to help them improve their chances of social mobility when they grow up.

The plea follows a recent speech by David Cameron in which he threw the spotlight on social mobility as a key factor inhibiting the development of the UK. Lower income families save more as a proportion of their income than more affluent homes. This, says David White, chief executive of the Children's Mutual, is the reason that Child Trust Funds were introduced by the Labour government. Mr White stated that the Child Trust Fund was introduced to help create a level playing field by providing children with a financial dowry when they reached 18 on which to embark on achieving their ambitions and fulfilling their goals.

Andrew Hagger, of comparison website Moneynet, agrees but says that greater competition is required to improve interest rates such that parents are encouraged to save. He bemoans the low rates available on child savings accounts and cites this as a reason that parents do not bother.

Child Trust Funds were introduced in 2005 to provide every child born since September 1st 2002 with a £250 voucher that can be invested in an account that matures when the child reaches 18. Children from low income families receive a £500 voucher. In addition, all children under the programme receive a further £250 (£500) voucher on their seventh birthday. Under the Child Trust Fund rules, parents, family or friends can top up the account by up to £100 per month on a regular savings plan or £1,200 by ad hoc contributions.

Since the scheme was introduced, around 4.6 million Child Trust Fund accounts have been opened with approximately £2 billion pounds invested. The Children's Mutual also released research findings that showed 74% of parents have actively opened an account whilst 30% of low income families make regular monthly contributions into Child Trust Funds.

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Tough Competition For Child Savings

Wed, 25 Nov 2009 00:00:00 GMT

Andrew Hagger, PR and communications manager for Moneynet, stated there was only six providers offering regular savings accounts available to children. He further said that more competition and innovation was required from the leading building societies and banks to improve the range of accounts on offer to children. The findings also showed that 38% of accounts available were paying 0.5% or less where the invested amount was less than £1,000.

The best available rates were for funds invested in Child Trust Fund accounts where the average was 2.36%. Child Trust Fund accounts were introduced in 2005 but backdated to 2002 and provide all children with a kick start of a £250 voucher provided at birth by the government which has to be invested in a long term savings account. Children from low income families receive a £500 voucher. The government has recently extended the Child Trust Fund programme such that additional £250 (£500) vouchers are given when the child reaches their 7th birthday. In addition to the vouchers, parents family or friends can make additional contributions of up to £100 per month or £1,200 per year to help the account grow.

Child Trust Funds are long term tax incentive savings accounts where the money cannot be accessed until the child reaches their 18th birthday. All interest, dividend or capital growth within the account is tax free. Given the long term nature of the account, the rules around changing provider and type of account are very flexible. Therefore, parents can elect to move Child Trust Fund manager or the type of account in which the money is invested if they feel they are not getting the best return for their child. Money can be invested in Child Trust Funds that have the nature and characteristics of a deposit account or in more adventurous funds, bonds stocks or shares. Switching providers and fund types is low cost except where they are invested in stocks and shares where there may be dealing charges.

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One Million Accounts With Family Investments

Tue, 24 Nov 2009 00:00:00 GMT

Family Investments has announced that it has now more than 1 million Child Trust Fund accounts. The company also said that it now has over 1.1 million accounts in total and is the first provider to reach this milestone. Family Investments has announced that it has now more than 1 million Child Trust Fund accounts. The company also said that it now has over 1.1 million accounts in total and is the first provider to reach this milestone.

Child Trust Funds were launched in 2005 by the government as a means of encouraging parents to save for the long term financial futures of their offspring. The scheme was backdated so that any child born on or after September 1st 2002 received a voucher worth £250 (£500 for children from low income families) to be invested until the child reached 18. In addition to the voucher given at birth, children currently receive another voucher worth £250 (£500) on their seventh birthday. Parents, family and friends can also make additional monthly or ad hoc contributions to the Child Trust Fund up to £100 per month for regular savings or £1,200 per annum in total. Funds in accounts cannot be accessed until the child reaches 18 but parents can change provider and the type of account in which the funds are invested at any time. Providers offer a range of accounts from those that perform like deposit accounts through to ones invested in funds, stocks and shares.

John Reeve, chief executive of Family Investments believes that the 1 million account milestone consolidates his company's position as a leading provider and proved the wider success of the Child Trust Fund programme. Already over £2billion has been invested into 4.6 million accounts. The tax free status of the accounts is also encouraging additional savings by parents and friends of £289 million per annum.

In addition to selling their own Child Trust Fund accounts, Family Investments took over the administration of around 400,000 accounts from Abbey and LV= and became the provider for Abbey.

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Quarter Parents Do Not Open Child Trust Fund

Fri, 13 Nov 2009 00:00:00 GMT

Recent government statistics show that nearly three quarters of all parents are opening a Child Trust Fund account for their offspring in the first year of life. 4.6 million children now have a Child Trust Fund account with around £2bn invested in a wide range of accounts.

But that still means that a quarter of parents fail to take advantage of this government sponsored initiative and get the initial voucher, worth at least £250, invested and earning for their child.

Each child receives a £250 voucher at birth from the government and parents have contributed an additional £289 per child (in the year to April) to top up the account. Children from low income families get a voucher worth £500. Additional vouchers worth £250 (or £500) are paid again when the child reaches 7.

Some analysts, however, are not fully behind the Child Trust Fund scheme that was launched by the Labour government in 2005. The money invested in a Child Trust Fund cannot be accessed by the family or child until they reach 18 and then can be used for any purpose. Martin Lewis, of MoneySavingExpert.com, says that a better move would be to invest savings into an ISA where you still get the tax benefits plus have access to the money at any time.

The three quarters of parents that have opened an account can choose where to invest so as to optimise the return on their Child Trust Fund account. Options include deposit type accounts through to riskier stocks and shares or funds based alternatives. For the quarter of parents that do not elect within the first year where to invest the initial voucher, the government will place the funds into a default stakeholder type account. This invests in stocks and shares before switching to less risky bonds when the child reaches 13.

The Conservatives have already stated that they will limit the availability of new Child Trust Funds to those families earning less than £16,040 per year if they get into office next year.

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New Website From Children Mutual

Fri, 13 Nov 2009 00:00:00 GMT

Leading Child Trust Fund provider the Children's Mutual has launched a new cashback site that enables shoppers to earn money in £10 increments with thousands of retailers. The money earned can be invested directly into a Children's Mutual Child Trust Fund account of their choice as single top up contributions.

The new site works with a list of over 1,000 retailers, including high street names such as Boots, Debenhams and Marks & Spencer. It allows registered members the opportunity to get up to 20% cash back with some retailers also offering additional discount voucher codes to help on-line shoppers save even more.

Tony Anderson, marketing director of the Children's Mutual, says that the site was introduced to help parents get great value on their purchases whilst also encouraging parents and others to save through a Child Trust Fund for their child's future financial needs.

Mr Anderson also points out that expectant and new parent surveys conducted by the Children's Mutual have highlighted that 90% of respondents would like to get 'money back' for their spending on items necessary for their new child. British parents spend around £605 on items such as car seats, prams and buggies with a further £3,383 on decorating and preparing a nursery.

But the new website doesn't stop at retailers of items supporting the birth of the child. The online cash back site also has retailers of school uniforms and family holidays allowing parents and others to make additional contributions to their child's Child Trust Fund account right through their growing years. Total annual contributions to any Child Trust Fund cannot exceed £1,200 but with an average of £24 being saved per month (by those making additional monthly contributions) the added cash back earnings from on-line shopping should enhance the long term returns from the account.

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More Child Trust Funds Opened

Thu, 12 Nov 2009 00:00:00 GMT

October has seen the strongest rise yet in the number of new Child Trust Fund accounts being opened by parents. Figures released by leading provider, the Children's Mutual, also show that a record number of direct debuts have also been set up this year in order to make regular additional payments into their child's account.

David White, chief executive of the Children's Fund, says that with half of all customers making additional contributions from the birth of their child then they could produce a fund of £9,750. This is based on the average monthly contribution being just £24. Parents, family or friends can add a maximum of £100 to the Child Trust Fund or a maximum of £1,200 per year based on regular and ad hoc contributions.

The release of Child Trust Fund statistics comes at the same time as the government confirms that 74% of all parents open up a Child Trust Fund account in the first year of their child's life. If no account has been opened by the parents in the first year the Treasury automatically invest the initial voucher worth £250 (or £500 for children from low income families) into a stakeholder type account linked to shares and bonds in the early years. In addition to the voucher at birth, the child will receive a further £250 (£500) on their 7th birthday. With a wide range of options available for investment, parents are urged to act quickly to get their funds working for the long term. Accounts cannot be accessed by the child until they reach their 18th birthday but fund managers and the type of account held can be easily changed through the life of the Child Trust Fund.

The news shows that parents are more proactive with savings for their children than for themselves. Just 40% have invested in a private pension and 30% have opened an ISA in the past.

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Ethical Funds Believe In Positive Benefits

Thu, 12 Nov 2009 00:00:00 GMT

Figures just released show that over £7bn has been invested with ethical funds compared to just £1.5bn 10 years ago. However, with over £400bn invested in non ethical funds there is clearly a barrier for people in believing that they can get an adequate return for their investment.

Penny Shepherd, Chief Executive of UK Sustainable Investment and Finance, believes that there are also positive benefits for the environment and society. She says that opting to buy green is a positive choice where your money can work hard for you.

Ethical banking has seen a growth in popularity following the recent financial crisis. The Co-op group has reported a 17% increase for the half year to July with a 50% rise in the number of customers opening accounts. Credit Unions based around communities have also seen a growth in popularity.

There are a wide range of ethical investment opportunities available too from savings accounts to Child Trust Funds . Even if you do not want to do the hard research yourself, there are fund managers and companies out there that will select and manage your investment on an ethical basis.

Child Trust Funds are long term tax friendly saving instruments for children that are sponsored and subsidised by the government. Each child, since September 1st 2002, has received a £250 voucher at birth. Children from low income families receive a £500 voucher. A further £250 (£500) is being paid to children when they reach 7 and can now, for the first time, be invested in an ethical fund offered by the Children's Mutual. The funds in the account cannot be accessed until the child reaches 18 but parents or others can top up the vouchers by making regular contributions of up to £100 per month or no more than £1,200 per year through regular payments and single top ups.

The difficulty of finding ethical companies into which to invest is highlighted by the FTSE4Good UK index. This was introduced to help ethical investors track socially responsible firms but it is difficult not to select what, to some, may be potentially controversial companies such as BP or Tesco.

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Postal Strike Child Trust Fund Safe With The Childrens Mutual

Wed, 11 Nov 2009 00:00:00 GMT

Delays or problems caused by the postal strike can be avoided for new customers wishing to open a Child Trust Fund account with the Children's Mutual. Customers can now use the internet or telephone to open an account and not miss out on the early opportunity to kick start their child's savings account.

Until recently, the only way to open a Child Trust Fund account was to send the paper voucher issued by the Treasury to a fund manager with an application form. Recent changes to the system mean that Child Trust Fund managers with the appropriate technology can now open an account electronically for their customers or by using a telephone help line. The Children's Mutual was one of the first Child Trust Fund providers to adopt the new voucherless system.

Tony Anderson, marketing director for the Children's Mutual says that opening an account online or over the phone is a quick and easy way for parents to open a Child Trust Fund. He commented that anything that makes the system of saving in a Child Trust Fund simpler will help families save for the future.

Child Trust Funds are long term, tax free, savings accounts that were introduced and sponsored by the government to help parents, families and friends save for the financial future of their children. Whilst the invested proceeds cannot be accessed until the child reaches 18, all the monies invested in an account grow tax free. In addition, the government contributes a voucher worth £250 at birth (£500 if the household income is defined as low) and a further £250 (£500) when the child reaches 7. Additional sums up to £100 per month for regular savers or £1,200 per year can be added to top up the account to help it grow.

Funds can be changed easily through the life of the account to reflect the risk appetite of the parents. There are low risk interest bearing accounts and riskier investment options based on stocks, shares, funds or bonds.

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Recession Not Affecting Child Trust Fund Contributions

Tue, 10 Nov 2009 00:00:00 GMT

The recession is doing little to dent the savings appetite of parents into Child Trust Funds. The latest quarterly survey findings from TISA (Tax Incentivised Savings Association) show that during the third quarter of 2009 an additional 30,000 Child Trust Fund accounts received monthly contributions by direct debit than in the previous quarter. This means that there are now 640,000 Child Trust Funds (or 21.5% of the total number of funds) receiving regular payments from parents or friends. This is worth an additional £14.4m and is an aggregate increase of over £800,000 on the previous quarter.

When looking at single top ups as well as regular monthly payments, there is also an increase in total contributions made to Child Trust Funds. 30.8% of all accounts surveyed (which represents 65% of all Child Trust Fund accounts) received additional deposits - an increase from 30.2% in the previous quarter. Around 1.4 million parents, relatives or friends are making contributions totalling £22m per month into a Child Trust Fund account. The average monthly amount paid in has also risen from £22.38 to £22.59. The maximum contributions that can be made to an account are £100 per month or a maximum of £1,200 per year.

Tony Vine-Lott, director general of TISA is encouraged by the findings. He also hopes that the second voucher payments to be made by the Treasury to all children reaching 7 from September will stimulate further interest and encourage families to strengthen the message that money awareness and other efforts to improve financial literacy will continue.

Whilst the levels of saving increase are modest, Vine-Lott is encouraged that contributions to Child Trust Funds are continuing to increase through these tough economic times. He commented that, "it does confirm that parents see the value of providing their children with a financial nest egg when they reach 18".

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More Stay At Home Dads

Tue, 10 Nov 2009 00:00:00 GMT

Leading Child Trust Fund provider the Children's Mutual has released new research results that show that there is a growing trend of fathers electing to stay at home to help look after their children and tend to the home.

The survey, conducted amongst 2,187 fathers during June 2007, showed that 26% of dads elected to work part time and 24% chose some form of flexible working pattern. 14% of fathers stopped work outside the home completely. The current recession is also encouraging 43% of fathers to spend more time at home with only 27% believing that they should focus on earning more money.

Fathers who stay at home spend the bulk of their time looking after children (4 hours 22 mins) with cooking (3hrs 50 mins) and looking after the family finances (3hrs 45mins) coming in closely behind.

David White, Chief Executive of the Children's Mutual, is encouraged by the shifting social trends that make stay at home dads more acceptable. He said that, "Being a lead provider for his children, whether as a main breadwinner or lead carer", is one of the most important roles. One of the ways that dads can really make a difference is by planning for the child's long term financial needs by saving regularly over the long term.

A Child Trust Fund is one such way of providing that long term financial nest egg for the offspring. Opening an account at birth and saving regularly can help give the youngster a financial head start in the future, says White.

Child Trust Funds are long term, tax efficient savings accounts for youngsters. Each child born since September 1st 2002 has received a kick start voucher from the government worth £250 that can be invested in a range of accounts from deposit type savings options to funds, shares or bonds. Children from low income families receive a £500 voucher. Children will also receive a further voucher worth £250 (£500) when they reach 7 so the government will have provided a total of at least £500 to help the account grow.

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London Mums And Eddie Catz Mumreneurs Fair And Xmas Party

Mon, 09 Nov 2009 00:00:00 GMT

London Mums, the only free and independent peer support group for mums based in London, and Eddie Catz, the London-based children’s Entertainment Centre, announced today that they will host the annual London Mums Christmas party as well as the second London Mumpreneurs’ Christmas fair on 20th November at the Eddie Catz in Putney from 5 pm to 7 pm.

Children and parents alike will be entertained by Amanda Frohlich, founder of Amanda Action Club, well known as the entertainer to stars like the Beckhams. Amanda's show is like a personalised and Christmas-themed physical development class for pre-schoolers using Amanda’s upbeat versions of classic nursery rhymes and carefully selected stimulating toys. Amanda will also exclusively present her new second music album.

Kids will have the chance to meet Santa in a grotto, get a free gift and enjoy free photo sessions well ahead of Christmas (in time to prepare the Christmas cards) as well as a free face-painting.

Monica Costa, founder of London Mums and mumpreneur, said: “Our London Mums’ parties have become regular gatherings for our members from across London and real opportunities for mums to enjoy the benefits of face-to-face meetings in a very pleasant environment.”

Alongside the party there will be a small mumpreneurs’ fair, the second event of this kind jointly organised by London Mums and Eddie Catz. During this event London Mums will officially present its newly published, free editorially - driven magazine, including articles by Rod Campbell, Elizabeth Pantley, Sue Atkins and an exclusive interview with BBC star Amanda Hamilton.

“Maria Johnston, owner of Eddie Catz, and I are both mumpreneurs and we were inspired to create a joint event designed to help emerging companies and to inspire mothers who would like to start their own business ventures. This is the second of a series of mumpreneurs’ events we are planning to organise in the near future”, added Monica Costa.

Tickets are £10 per child (babies under 8 months go free) including a light meal and a gift from Santa and £4 per Mum/Adult including a glass of mulled wine, a mince pie and a goody bag. To book visit Eddie Catz

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Sensible Co-op child trust fund

Mon, 09 Nov 2009 00:00:00 GMT

Using a Child Trust Fund to help with planning for the financial future of children has been backed by Zack Hocking, head of investments at the Co-operative. This comes as research has revealed the cost of keeping children entertained through the half term break could be up to £1bn. The findings show that the cost of entertaining a child for a day through the half term break can run into hundreds of pounds adding up to around £432m nationally. Add to that the cost of fuel and the additional costs of bringing a friend and it can be seen that the period just before Christmas can be an expensive time.

The news comes as the Co-operative Investments is launching its Ethical Child Trust Fund to help parents save for the long term. The fund is offered through the Children's Mutual, a leading provider of Child Trust Funds in the UK and is the first of its kind to invest in ethical assets.

Zack Holding comments that the half term break and Christmas periods are expensive times for parents and that it demonstrates the need for sensible financial forward planning. One way to do this is to invest on a regular basis into a Child Trust Fund account so that there will be a nest egg available when the young adult reaches 18.

Child Trust Funds are tax efficient, long term savings accounts sponsored by the government. Since September 1st 2002, every new born child has received a voucher worth £250 (or £500 for those from low income families) from the government to be invested for the next 18 years in a range of savings accounts under a Child Trust Fund banner. The government has further extended the scheme by paying an additional £250 (£500) voucher on the child's seventh birthday to help the fund grow. In addition, parents or friends can add to the account by up to £100 per month or £1,200 per annum with all the interest, dividend or capital growth being tax free.

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Most Parents Dont Want To Limit Child Trust Funds

Mon, 09 Nov 2009 00:00:00 GMT

Child Trust Funds were introduced by the Labour Government as a way to encourage parents to save and provide some financial support for their children as they reached adulthood. Every child born since September 1st 2002 has received a voucher worth at least £250 to be invested into a long term, tax free savings account for the child that will mature on their 18th birthday. Children from low income families receive a voucher for £500.

The scheme was recently extended so that all children receive a further voucher worth £250 (£500) on their seventh birthday. In addition, parents, relatives or friends can make additional monthly or single contributions to top up the Child Trust Fund account up to £100 per month or £1,200 per year.

Child Trust Fund accounts are now widely available through a range of managers. Child Trust Funds also offer a range of investment opportunities ranging from deposit like accounts through to options using shares or bonds as the basis for future growth.

The Conservative Party believe that the Child Trust Fund system is an expensive luxury in the current financial and economic climate and that it should be provided on a restricted basis to lower income households. Currently, a lower income household is one where the aggregate income earned is less than £16,040 per annum although this amount changes annually and is based on the overall benefits limits defined by the Government.

Alistair Darling, the Chancellor of the Exchequer, has recently reaffirmed the government's commitment to the Child Trust Fund programme and reiterates that it helps parents instil a form of financial discipline into planning their child's future. Once the Child Trust Fund account matures, the money can be used by the young adult for any purpose.

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Education Fee Planning

Fri, 30 Oct 2009 00:00:00 GMT

With news headlines continually reporting on failing state schools, many parents feel that the only options open to them to get their children into a good state school, is either to move house or change religion! Both are totally impractical and can be financially restrictive. Initial selling and moving costs need to be taken into account as is the fact that many house prices in sought after catchment areas are often much more expensive than similar sized homes outside that area.

Deciding to adopt a particular religion as a tactic to increase the chances of your child being accepted into a high performing faith school is a gamble that not always works. Although parochial schools tend to accept those students who follow a particular faith, there are limited spaces available for non-practicing students. However, because faith schools are often associated with a high standard of teaching, there is a high demand and long waiting lists for a coveted place regardless of your faith.

One way to provide your children with a higher quality education is to enrol them in a private school. However, most parents quickly pass over this option due to the very high costs associated with it. Joe Luong, founder of www.MyEggNest.com disagrees. ‘With some careful financial pre-planning this can become a very real possibility that’s well within the reach of lots of parents’.

The independent children’s’ savings website www.MyEggNest.com suggests that parents should:

• Start saving as soon as a child is born by setting up a child savings account or an ISA. Parents can save up to £7,200 a year, tax year free of income tax and capital gains tax and for those aged over 50 the allowance recently increased to £10,200.

• For a new born child, the cost of educating them from age 11 to age 18 at a cost of £10,000 per annum in today’s terms, assuming a 5% investment return and 6% school fees inflation, would need an overall fund of £166,510. To pay for this you could either invest £75,758 today or start making monthly savings at a rate of £747 per month.

• ‘Parents could also benefit by investing in a tax-efficient manner for example using an ISA wrapper or by using their annual capital gains tax allowance. This could currently save them 40% of the costs or indeed 50% next year, of school fees when compared to methods of savings which are taxed. Likewise being efficient for inheritance tax-purposes could also lead to a saving of 40% of the costs for grandparents wishing to help funding in this area,’ Says Steve Weisner, Financial Planner at Radcliffe & Newlands.

• Investigate scholarships and bursaries that could contribute 10% to 100% of school fees. Bursaries are means tested to provide financial support for children who could not otherwise afford the cost

• Consult an independent financial advisor to plan for your individual circumstances or utilise www.MyEggNest.com free ‘Ask the Expert’ advice on suitable financial options. Ask the Expert

Choosing a school is one of the most important decisions you will make for your child so you really need to plan well in advance. Until recently, the problem of paying for education was one that concerned only the wealthy. Now it can affect any parent and child. With forward planning and/or some good advice, you should find that providing your offspring with privately funded education is far from a financial nightmare.

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How To Approach Pocket Money

Thu, 29 Oct 2009 00:00:00 GMT

An understanding of the concept and value of money is essential for any child and most children are introduced to money through the pocket money that they receive from an early age. There are, of course, no hard and fast rules as to when children should start to receive pocket money, but those as young as four or five years of age may already understand that money is needed to buy things and, once it has all been spent, no more is available for a while. If so, they may be ready to start receiving a small amount of pocket money and start learning about rudimentary money management, as well as achieving a little independence.

Pocket money can, of course, be paid to a child unconditionally, as a weekly gift or as a reward for completing certain tasks to your satisfaction during the week. Paying pocket money as a reward for, say, tidying their rooms or clearing the table or other small easy tasks can help children to understand the concept of earning money, without feeling that they are being taken advantage of.

The next question of course, is how much pocket money should your child or children receive. Interestingly, recent research has shown that pocket money is out of step with inflation and the average amount of pocket money paid fell from £8.01 per week in 2007 to £6.13 per week in 2008. The average figure does not, of course, provide any indication as to what proportion of pocket money was gifted to children or any other conditions imposed, but, in times of economic uncertainty, pocket money does appear to be seen as a means of paying just small current expenses. Roughly a third of children do save some of their weekly pocket money, but nevertheless, still rely on their parents for more expensive items such as mobile phone, iPods, etc...

If you want to manage your child's health as well as his or her spending, you might like to forbid spending pocket money on sweets or chocolate. That does not mean that your child has to go without these items altogether; you can include sweet treats in your weekly shopping and issue them in a controlled way, but there are plenty of other exciting items - magazines, DVD, toys, etc. - that your child can be encouraged to buy instead.

So-called "pester power" can also be a problem, particularly if children see their grandparents or other relatives on a regular basis. Grandparents are renowned for their generosity to their grandchildren, but can often be seen as a "soft touch" by children, especially if their attempts at badgering their parents into submission have failed. Letting relatives know that you are helping your child to understand that saving for more expensive items is an important and necessary life skill can help them not to inadvertently undermine your efforts. ,

Older children probably need guidance rather than strict instruction regarding what their weekly pocket money is supposed to cover. It may, for example, include a component for essential items, such as bus fares or lunch money and so - inevitably with a little help from yourself - introduce the concept of budgeting. If an older child is saving for a more expensive item, it may help to have a proportion of his, or her, pocket money deducted at source and paid into a savings account. The child can be involved in the process of selecting a savings account which pays the best rate of interest and allows money to be withdrawn when it is required; this latter point is important if a child is saving for a specific, seasonal purchase, holiday, or outing.

Many parents allow their children to earn extra pocket money by doing jobs in and around the home above and beyond what they are normally expected to do. Children should be made aware however, that there is a limit to the amount of extra pocket money that they can earn in this way and that not every job necessarily has a price tag. Good manners, doing homework or going to bed on time, without a fuss, are all things that you would expect of a child, regardless of financial reward, so make sure that your child understands this. General good behaviour can of course, be rewarded with an occasional outing to the cinema, skating rink or bowling alley instead.

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