By Ameet Magan
The Chartered Institute for Securities and Investment (CISI), one of the nation’s top financial bodies has called for the government to make sure that every child in Britain is provided with a bank account once they reach sixteen.
By providing all children with bank accounts the Institute believes under eighteens will begin to grasp an understanding of finance, especially their personal fiscal responsibilities from a much earlier age.
Financially responsible parents
The new Junior ISA is just one way to save for children and to make sure that they have something to get a start in the adult world.
Of course it’s important to teach our children about financial responsibility but even the most money conscious young adult is bound to have financial concerns in this era of recession and austerity. Often it’s the parents who ensure their kids don’t sink once they leave home by giving hand-outs and helping them financially.
However, some parents don’t just give their kids handouts as they need them. Those capable of a little foresight and financial planning will have ensured they have set aside and saved for their children futures.
Junior ISAs, offered by providers such as Family Investment are tax free savings accounts; allowing £3,600 a year to be saved. The funds can only be accessed by the child when they reach 18 and they offer a logical and straightforward way for parents to start long term saving for their children’s futures.
“Participate… in financial society”
Whilst it may be of educational benefit to teach young people about banks accounts from an early age, allowing them to “participate fully in financial society”, Simon Culhane, Chief Executive of CISI stated.
Another alternative account available to children is the Child Tax Exempt Savings Plan. It is available from many high street providers and allows parents and other adults to save as much as £25 per month tax free.
Whilst it’s important to teach children financial responsibility, and budgeting skills, it may be difficult for them to learn if they don’t have any actual savings of their own to look after.
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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