Breakfast Meeting: Investing for Children

Buying a first home or paying for further education or training for your child can be made far more affordable by starting early.

The principle is very simple: the longer the investment has to mature, the greater the benefit will be from the year-on-year compound growth of reinvested returns. Investing £200 a month for five years for example, can grow to over £13,000.*Assumes an annual growth rate of 5% net of charges.

There are a number of government schemes to save for children. The tax-friendly Junior Individual Savings Account (JISA) is a very attractive option. Any returns are free from Income Tax and Capital Gains Tax. Savers can typically make regular or one-off payments up to the current annual limit of £9,000.

Less well-known is that children can have a pension fund as soon as they are born. Setting one up can bring significant tax advantages since, as you save, the government adds a generous tax relief.

Contributions up to the maximum of £2,880 a year are automatically grossed up by the government to take account of tax at 20%, giving a maximum annual investment of £3,600. Even a few years of contributions can build a substantial pot.

Feel free to come along to this free event to find out more!