Research from Chase Fleming Asset Management reveals that 76 per cent of children
Posted in General on 24. Aug, 2010
Research from Chase Fleming Asset Management reveals that 76 per cent of children will spend their Christmas money almost immediately, while 22 per cent will save it (2 per cent didn’t know).If you are thinking in terms of a present that will last longer than the latest must-have piece of plastic, there are various savings options aimed at children. If you want instant access and a good rate of interest, a building society account is a wise choice. Nationwide’s Smart2 Save account pays 6.95 per cent interest, while Coventry Building Society has an Interest Zone Account for children aged seven and over, paying 6.7 per cent interest.If you want a longer-term savings vehicle such accounts aren’t the best option. A Witan Investment Trust survey reveals that 35 per cent of parents are saving in the hope of providing their child with a lump sum on their 18th birthday. If you want to build up a sum to pay for university or help with buying a first home, you will need to opt for a vehicle in which the money can grow quickly.”The public are becoming more financially astute and are looking at their children’s future,” says Michael Owen, director at independent financial adviser, Plan Invest. “When investing for children, parents have the advantage of being able to look long-term and can consider the stock market.”Tunbridge Wells Equitable offers baby and university bonds. Baby bonds, along with National Savings Accounts, have traditionally been popular investment vehicles for children.
The National Savings Children’s Bonus Bond is tax- free with a fixed rate of return (5.15 per cent), but you can only invest a maximum of £1,000.Baby bonds are tax-free, with the option of regular investments of up to £25 a month or £270 a year. But they are not as popular as they were as they lock away capital for 10 years “I’m not a fan of baby bonds,” says Mr Owen “They are inflexible and a bit pricey. I would advise parents to go for a good quality unit or investment trust.”Some fund managers offer unit or investment trusts specifically for children. Edinburgh Fund Managers is offering an InvestIT for Children Savings Plan, which offers two ways of saving. The first option is a designated account which is most suitable for parents who may want to access the money before their child is 18.
Or you could opt for a trust account which allows children access to their money at 18. Edinburgh Fund Managers calculates that £20 a month saved into the average Edinburgh Fund Managers Investment Trust over the past 18 years would be worth £17,673.”Investment trusts are ideal for children because of the low charges,” says Mr Owen. Investment fund researcher, Fitzrovia International, has found that unit trust and Oeic (Open-Ended Investment Company) charges are 60 per cent higher than investment trusts. While the average total expense of a unit trust and an Oeic is 1.38 per cent, an investment trust is just 0.83 per cent.* Information booklets are available on investing for children: Association of Investment Trusts (AITC), ‘Its for children’: 020 7431 5222; Chase Fleming Asset Management: 0800 204020; Tunbridge Wells Equitable: 0500 800830 and quote PRXmas.. Being your own boss, rather than having another person to answer to, sounds idyllic. But take the plunge and you’ll realise how much easier it was working for someone else.
Being your own boss, rather than having another person to answer to, sounds idyllic. But take the plunge and you’ll realise how much easier it was working for someone else.
Once you join the ranks of the self-employed you are your own mini-business, incorporating finance department, marketing, sales, production and chief executive. And organising your finances is extra complicated.”My financial affairs are so complicated that I need as much help as possible,” says self-employed political lobbyist Mark Brown. “I have a book-keeper who does my accounts each month and saves me so much in tax and accountancy fees that I would recommend it to anyone.”It is vital for the self-employed to appreciate what percentage of their income they should set aside for tax, pension, savings, mortgage and living expenses. “I would suggest that you assume about 35 per cent of your income should be set aside for tax,” says Gary Morris of independent financial adviser (IFA) Towry Law. “Then you should be putting at least 10 per cent of your income into your pension.