We all want the best for the children in our lives. Whatever their future holds, we want to make sure they’re happy and have every opportunity to do well.

Of course, money isn’t everything, but it can give children a valuable head start. A nest egg can pay for education, give them access to different opportunities and help them establish their adult lives. Starting to save money now will give them more freedom to make the choices they want when the time comes.

Having some savings available in early adulthood can make a real difference. The average debt of a student leaving university is £45,000¹ while the average deposit for a first-time buyer is £50,964².  

What are the investment options for children?

A Junior ISA: This can be a great way to start, with regular contributions or a one-off payment, up to the annual limit. Returns are then free of Income Tax and Capital Gains Tax.

Start a Pension: Might seem crazy, but retirement costs a lot of money. Having a small fund that starts in childhood and could be invested for 50 or 60 years, combined with the efficiency of a pension could make a real difference.

Set up a Trust: There are various ways of doing this that can give different levels of access and control. Taxation can also vary depending on the trust type and who makes the investment, so it’s important to get expert advice.

When is the right time to start investing for my children?

You don’t need to put away a huge amount each month to build a good nest egg for a child. The most important thing is to start saving as soon as you can. If you can start saving while children are young, time is on your side. It’s surprising how much relatively small amounts of money saved on a regular basis can grow over time. The power of compounding, coupled with the right investment choices, can significantly boost the value of your fund as children grow.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances. 

Trusts are not regulated by the Financial Conduct Authority. 

¹Source: commonslibrary.parliament.uk/ research-briefings, December 2021

²Source: Nationwide Building Society, December 2021