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Alternative Options for Parents
| Date: 25 October 2011 |
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With the Junior ISA to be released next month, parents should be aware that although it has been very well publicised it is not the only children’s saving product that exists. The Junior ISA was the successor for the Child Trust Fund (CTF) and it offers a straightforward and effective way to save for a child’s future.
Not an exact replacement
The Junior ISA is a simple savings vehicle for parents and it allows parents or any concerned adult to set money aside that will potentially cover the cost of university, a first car or even a deposit for a house. Click Here if you would like to know more or if you would like to find out how to apply.
The Junior ISA is not entirely the exact replacement since it comes without government contributions. The CTF was targeted to trying to get lower and middle-income families to save for the future of their child with the help, in the shape of contributions from the government.
Taking in all the facts regarding the Junior ISA will be apparent that it is the leading route for long-saving, especially if you have in your mind plans to help your child cover the cost of university or getting them on the property ladder.
Savings Alternatives
However, it would be wrong to assume that Junior ISAs are the only product that exist. There are others in the form of traditional ISAs which allow investments reaching £10,680 to be made per individual in their own name. This account is similar to the Junior ISA, but it is different in the fact that the parent will maintain control over the account even after the child turns 18.
ISAs are just one alternative that parents can explore as an option, there are other which include standard savings account and such things as children’s bonus bonds.
Child Tax Exempt Savings Plans
You can also use Child Tax Exempt Savings Plans (TESPs) offered by Friendly Societies as an alternative to the Junior ISA, which may better suit your needs - especially if you prefer to contribute smaller amounts each month (typically ranging from £10 - £25, depending on the provider). Shepherds Young Saver Plan is an exception to this monthly limit, allowing parents and friends more flexibility with premiums from £7.50 per month up to £100.
If you are interested in finding out what your other options are so that you know your choices, simply ask an expert.
MyEggNest's Top Tip: Shepherds Young Saver Plan
Child Tax Exempt Savings Plans (TESPs) are currently the most tax efficient way to save for your child - and Shepherds Young Saver Plan gives you the chance to lock away more per month than any other TESP.
The plan allows parents to save from as little as £7.50 to £100 each month - 4 times more than any other provider - and offers sickness benefits, along with the ability to withdraw up to 25% of the fund after 10 years.
For more information and reviews, click here
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