It is as if children have become a luxury item. From their first squeal through to the age of 21, you will pay out more than £200,000¹ in their name. This can be a hefty chunk of your after-tax income and it is therefore worth planning ahead where you can, to minimise the burden of some of the more predictable expenses.

However much you have available, you will find there is an option which is suitable. Some will be specifically designed for children – and some will even have tax benefits thrown in.

Choosing the right option

Child Trust Funds were removed by the Coalition Government in the Emergency Budget so this route is no longer an option unless you are topping up an existing plan². However, friendly society children’s bonds, with low minimum investment levels, continue to be available and can be used by anyone connected with your child – even friends and god parents as well as close relatives. They also offer tax breaks.

However, the list does not contain just the one option. There are also a large number of generic products offering minimum investment levels of just £20 or £30 a month. The choice of funds is vast and the terms are also more flexible. Taking costs, your tax position and your attitude to risk into account, some could be used instead of – or perhaps as a top up to any of your existing plans.

Planning for your children’s future

With such a large range of options available, being sure you make the right choice can be daunting – and take a significant amount of your time as you search through the different offerings and find out all the details.

Instead, you could ask us for help. Not only can we quickly outline what the different options mean for your child’s future, we can also assess your situation, with full knowledge of the wide range of products available.

For more information on how you can make the most of the money available to your child, please contact me today or sign up for my email newsletter to receive a free copy of my guide to children's savings.

Sources: 1: Liverpool Victoria, Annual Cost of a Child survey 2010, published Feb 2010; 2: Payments into Child Trust Funds officially cease in January 2011, though existing plans will continue and holders may continue to make personal contributions to them subject to the annual limits.