Worrying about how your teenager handles their money? Don’t. Our Saving for Children research found that they are more responsible than we think when it comes to money.
We carried out a survey into how adults save for children, and how teenagers plan to use the money saved for them, which revealed that a whopping 62% of teens said they would put money into a savings plan if they received £10,000.
The vast majority of adults (73%) are already saving, or intend to start saving for their kids, but our study showed that some parents and grandparents are worried about the financial mistakes teens could make once they get their hands on the cash.
Adults Vs Teens
Our survey showed some unexpected sensible behaviour, with more than half of teens saying they would put money into education, and 21% would use it for a deposit on a home. This could be the result of finance now being taught as part of the UK’s national curriculum, but the majority of teens surveyed said that they don’t learn enough about financial education at school and that their money management lessons start at home.
Our savings plans can help you save from as little as £25 a month for yourself or £10 a month for your children.
This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.
What’s the best saving account for my child?
When it comes to building up a pot of cash for a child’s future, there’s a lot to consider…
Deciding how to save for a much loved child’s future can be a pretty daunting task. Should you make the most of your child’s increased Junior ISA (JISA) or Child Trust Fund allowances, each now offering up to £9,000 annual tax-free savings in the current 2020/2021 tax year, or should you branch out and find a different account or save for your child in your own name?
Choosing a way of saving for your child that suits you can be made easier by asking yourself a few questions:
How much would you like to save, and for how long?
Can you commit to longer-term, monthly payments?
Would you prefer the money to be untouchable, until the child is a certain age?
Would you like to have a say in how the money is spent?
Do you mind an element of risk which could generate a potentially higher rate of return?
“It’s their money and they should choose how they spend it”
If you feel that it’s their money and it’s up to them what they do with it, then a regular savings plan like the Child Tax Exempt Savings Plan offered by Foresters Friendly Society, could be one to consider. Monthly payments of £25 are manageable, the plan guarantees a tax free cash sum for your child, providing all monthly payments are maintained for the full term of the plan, and the money can’t be accessed until the plan, which can run for between 10 and 25 years, matures. Plus as the plan is set up in the child’s name, the cash will go directly to them.
“I’ve saved the money so I feel I should have a say in what it’s spent on”
If you’d like to have more control over when the child you’re saving for receives the money and what they use it for, a Tax Exempt Savings Plan could suit. It works in much the same way as the children’s version, but the money is saved in your name instead, so the payout will go to you ensuring you retain control.
“I want a flexible plan, so I can access the money if I need to. I’m also comfortable to balance an element of risk with the potential for higher returns”
If this sounds like you, then you could be in the market for Foresters Stocks and Shares ISA. You can save regularly or pay in lump sums (currently up to £20,000 per tax year), plus it offers you the flexibility of being able to make regular and one-off withdrawals.
Stocks and Shares ISAs are intended to be longer-term investments (5-10 years), so they can potentially yield better returns than a Cash ISA. However, depending on how long you’ve had the Stocks and Shares ISA and when you withdraw money, as with any investment linked to the stock market, there is the potential that you could get back less than you put in.
Setting up a savings plan is a bit like raising a child – you’re in it for the long haul! So, check out all the details, weigh up the options and make an informed decision that you’ll feel comfortable with for the next 5, 10 or even 25 years. For more information about our product range read more at forestersfriendlysociety.co.uk
Tax rules may change and depend on individual circumstances.
Inflation could erode the value of your money over time.
The content of this article is for information purposes only and does not constitute financial advice. We do not offer financial advice. If you’re unsure as to the suitability of a product you should seek advice from a Financial Adviser, which you may have to pay for.