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Just £31 a week can help give your child the keys to financial freedom

2nd February 2016 Print

Every parent wants to give their child a good start in life, but this often comes at a cost. Paying for driving lessons, their first car and insuring it, funding a gap year and covering university tuition fees all adds up and can cost you over £40,000. But saving for your children needn’t be as daunting as it sounds. Fidelity International calculates that by saving just £31 a week into a Junior ISA as soon as your child is born can give them £41,886.06 over 18 years.

If you are able to increase your contributions to £78.46 a week, thereby maximising your child’s JISA allowance, you could provide your child with a significant sum of £106,208.07 on their 18th birthday. This would not only cover the cost of getting them on the road, that gap year and their university fees but also provide the average deposit required of £33,000 for their first property.

Maike Currie, Investment Director for Personal Investing at Fidelity International, comments:  “Raising children can be expensive and it’s never too early for parents to think about how they can start to save for them. The sooner you start saving the longer your investment has to grow and the longer you’ll benefit from the magic of compounding - the effect of generating earnings on top of previous earnings.

“Saving into a Junior ISA is also a great way of spreading the cost of giving your child a head start in life and them the financial freedom they will yearn for when they reach their 18th birthday.

“Think about saving each month as this is much easier than stumping up a large lump sum each year. As our analysis shows, even a small amount of money invested regularly can build into a sizeable sum.

“One thing to bear in mind is that with a Junior ISA, the money is invested and locked away until the child is 18. When the child is 18 it becomes their ISA and they assume full control.”