Investing for children is becoming more relevant for the child than it ever has in my opinion.
So why is it more relevant to the child now than before? Well my thought is that in the past any investments made in the name of the child were perhaps more convenient for the parents than the child. It is nice to start your child(ren) off with a savings or investment account while they are young. However, the sentiment tended to stop there, as just a sentiment.
I heard recently that one in every three children born today in the UK will live to 100. Throw in an increasingly competitive work environment, high house prices (relative to average incomes) meaning the average age of a first time buyer is now 37, non-existent final salary employer pension schemes, a lack of engagement with saving for retirement etc. etc. and you start to see why it is actually quite important to get your child(ren)s investments up and running sooner rather than later.
There are many options you could choose ranging from savings accounts with a bank, building society or credit union, or investments with a whole host of providers. If you choose investments for the long term growth potential then you have the choice of Bare Trusts, Junior ISAs, Child Trust Funds (though these are now discontinued), or investing in your own name and designating the account to the child. Once you have chosen which method of investing is right the next important stage is to work out what to invest in. Again there are many different options and the balance of investments chosen will determine what levels of growth you see.
Needless to say with so many options it is important to get good quality investment advice before you make your final decision.
Download our free guide – Investing for Children.