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Saving for your childs future
One in ten potential students is put off from pursuing higher education because of the extreme cost of attending university.
Many universities will charge as much as £9,000 for a degree course and, on top of that, students may need to borrow maintenance loans to cover the cost of living to avoid spiralling debt.
Many universities will charge as much as £9,000 for a degree course and, on top of that, students may need to borrow maintenance loans to cover the cost of living to avoid spiralling debt.
A survey by ComRes, questioning 1,009 A-level students in England, found that two thirds of them would consider an apprenticeship rather than pay the higher tuition fees.
Nearly half of those surveyed said they would attend a university close to home to cut living costs.
Nearly half of those surveyed said they would attend a university close to home to cut living costs.
Specialist debt advice is available to help manage your finanaces however many simply cannot afford the tuition fees and there has been a 12% slump in applicants this year because of this situation.
Our advice is to plan for your child’s future now.
Junior ISAs
These tax-free savings accounts, which will allow you to create a nest egg for your child’s future, will replace the Child Trust Fund.
A recent study found that 36% of parents would consider taking out a Junior ISA for their child. A further 43% would contribute if a relative or close friend opened one. Junior ISAs have a £3,600 limit per year. They will be officially launched on 1st November and are available to any child under 18 years of age born before September 2002.
It must also be noted that the account cannot be accessed until the child reaches the age of 18. Parents will have to make sure that any money put aside is money they can do without.
For a child born this year, if parents were to put in the maximum ISA limit of £3,600 in November, then again in April 2012 and at the start of each tax year thereafter, this could amount to £124,568 assuming interest of 5% by the time the child reaches the age of 18.
Children’s Savings Accounts
The alternative to a Junior ISA could be a traditional children’s savings account. The difference is that money can be withdrawn at short notice and parents can put away as much as they like. However, if the interest on the money is more than £100, it is subject to tax.
Children’s Bonus Bonds from National Savings & Investments, as well as Premium Bonds, are other examples of long-term tax-exempt savings available for children.
The sooner you start saving the better but for many the question must be asked - can you afford to start saving? Let us know on our releated Facebook wall post.
The sooner you start saving the better but for many the question must be asked - can you afford to start saving? Let us know on our releated Facebook wall post.
Moneyextra.com recommends you take independent financial advice before acting on any article
Back2011-10-27 16:31:15 © Moneyextra.com