Family finance planning: how Foresters can help
Wednesday, July 01, 2015
Once you have children, your world changes – and so do the demands on your finances. Here’s how Foresters can help you plan for the defining moments in your child’s life…
There’s a lot to be said for planning: it can make life a whole lot easier. For example, by thinking ahead to when your child may need some financial support, you can start saving years before so that when the money is needed, it’s there.
Planning in advance means that you’re more likely to be able to help your children through those defining – and often expensive – milestones.
Age 11+: Starting secondary school.
The jump from primary to secondary school means (lots) more homework, more responsibility for managing their own lives – and more expenses for you, in the shape of new uniform, PE kit, school trips and generally keeping up with all the gadgets and accessories that their peers have.
Average annual back-to-school cost: £285 for uniform, coats, bags and stationery.
Plan in advance: Our Tax Exempt Savings Plan, which has a 10-year savings term option, could provide a good way to help cushion these ongoing costs or you could consider our Stocks & Shares NISA which is a mid to long term investment that allows you to make withdrawals, subject to a minimum amount, when you need them.
Age 17: Driving lessons
Unless you’re an ex-Top Gear presenter, this may be something you approach with trepidation, but for your child it’s an exciting step to independence. And at least you won’t have to continue providing that teenage taxi service. But this doesn’t come cheap: even after they’ve passed the driving test, there are hefty insurance bills to cover.
Average cost: £1,128 for the average 47 hours of lessons required at an average cost of £24 per lesson.
Plan in advance: A Tax Exempt Savings Plan allows you to save £25 a month for a minimum of 10 years up to a maximum of 25 years, so could help provide the money when you need it.
Age 18+: College or university
This is something a lot of parents have on their radar – while many would like their child to go to university, they don’t want them to be saddled with debt as a result.
Average cost: A typical student on a three-year course outside London can expect to graduate with £35,000-40,000 of student loans.
Plan in advance: This is where a Child Tax Exempt Savings Plan might be handy to help out with some of the costs as your savings are made in your child’s name. Alternatively, a Guaranteed Savings Plan allows you to save a higher monthly amount so the lump sum payout at the end of the savings plan’s term will be higher than that of the Child Tax Exempt Savings Plan.
Age 21+ Their first home
A deposit for their own home is a hefty sum even now, and even if they’re moving into a house share with friends, they’ll need a rental deposit plus furniture, cooking equipment – the list goes on…
Average cost: £27,719 is the average deposit for those buying a property; £900 for a rental property.
Plan in advance: A Guaranteed Savings Plan could allow you to give them a helping hand towards the deposit for their own home, while a Child Tax Exempt Savings Plan might be helpful for buying furniture and putting down a rental deposit.
Age 25+ Starting a family
Admittedly, it’s difficult to put an age on this but, whenever it happens, it’s an expensive business what with all the accessories and childcare costs involved.
Average cost: £230,000 to raise a child – but then you’ll know all about that…
Plan in advance: Our recent Saving for Children survey showed that 77% of teenagers learned about money from their parents, highlighting the importance of financial education as well as providing actual financial support, so you can help your children plan for their own future.
Please Note: 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.
Tax rules may change in the future and depend on individual circumstances.
Guarantees are subject to contributions being maintained for full term.
In the unlikely event that we could not honour the guarantee (i.e. If we were declared insolvent), you may be entitled to make a claim on the Financial Services Compensation Scheme. For further information please refer to the 'Compensation' section of the Key Features.
With regard to our Stocks & Shares NISA, you may get back less than you have paid in dependent on investment conditions.
If you cash-in the Guaranteed Savings Plan, Child Tax Exempt Savings Plan or Tax Exempt Savings Plan prior to maturity or you stop paying contributions, then you/your child may get back less than you have paid in or nothing if this is in the first year.
Inflation could reduce the value of your money over time.
Family Action – The Big Stitch Up
AA Driving School
The Money Charity
LV - Cost of a Child Report 2015
comments powered by