Why should I start a Junior ISA for my child?
There are many different reasons to open a Junior ISA for your child. Saving and investing in their future can be important to help give them the best possible start to their adult lives.
As children reach the age of 18 and face the reality of life as a young adult, they currently face two hugely expensive obstacles.
The first, university, continues to get more and more expensive, with a three-year course costing nearly £30,000 in tuition fees alone from next year. Having money saved to help deal with the cost of higher education can alleviate a lot of their doubts about the value of getting a degree.
Graduates traditionally earn more money than those without a degree, and having a degree opens up many doors further down the line when applying for jobs. With many students expected to turn down that opportunity because of fears about the huge student loans they will be left with, your child may be influenced by money when deciding whether to pursue further education – when really, they should be basing their decisions on non-financial reasons.
The second cost is a house deposit, the first step on the property ladder. With mortgage providers currently expecting around 20% of the house price for an affordable deal, and the average home costing over £160,000, children are looking at having to save up a massive £32,000 just to get on the property ladder.
With the average first time buyer now well into their thirties, many people leave university and pay more money in rent than they would on a mortgage, often for up to 10 years.
This is because they can’t afford the deposit which would allow them to pay a mortgage, and those 10 years would represent a third of even a thirty year mortgage.
There are many smaller things you may wish to help your child save for – driving lessons, their first car or even a once-in-a-lifetime gap year – and a Junior ISA can be the perfect savings pot to put a percentage of their wages in when they have a part-time job at school, and don’t know what to do with all the money they’re earning.
The possibilities are endless, and saving isn’t easy, but the lump sum at the end will make their and your life just that little bit more comfortable, whatever they choose to use it for.