How much do you need to save for your child’s future?
Discover how to work out if you are saving enough to reach your saving goals for your child
Some parents wish to give children a head start in life by helping them to acquire their first car, assisting them with university fees, contributing towards their wedding or towards a housing deposit. However, for the average person it is not affordable, unless we have a strategic plan in place to save for the future of our children, such as a dedicated children’s savings plan.
According to research from money.co.uk, parents need an estimated £259,000 to cover those expenses. Whilst this total is daunting, focusing on a more specific goal such as saving for a housing deposit, a car or university fees can help you to set more realistic saving goals.
Shepherds Friendly carried out a survey with 2,000 parents and found:
- 43% of parents would consider opening a savings plan for their child
- 35% of the above said they would save more than £50 a month
- 65% of the above said they would save £10-£50 a month
When asked what they would like their children to use the savings for:
- 32.8% of parents said towards a housing deposit
- 10.4% of parents said towards their first car
- 20.7% of parents said towards university fees
- 36.1% of parents said other goals such as traveling
Average cost of common parent saving goals:
- First house: £220,000 for first time buyers
- Cost of car: £3709
- Driving lessons: 20 lessons x 24 = £480 (for the average new driver)
- University fees: £44,500
- Between £1,500 and £10,000 can be spent on a round the world ticket (depending on the mileage and number of stops)
Did you know?
It’s not just parents that can open a children’s saving plan, there are a range of plans that are also available to grandparents and extended family too.
Use the calculation below to work out if you are saving enough for your little one’s future
- Amount you can afford to save each month x 12 months = Annual savings
- Annual savings x How many years you want to save = Approximate total savings
Then carry out some research to discover the average price of what you want your child’s savings to go towards. This can help you decide whether you feel you are saving enough for their future.
Find out more about Shepherds Friendly’s Junior ISA...
*Remember: When investing, your capital is at risk.
In poor investment conditions we may apply a Market Value Reduction (MVR).
Please seek independent advice on any financial product and inheritance tax advice.