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Good Advice

Children's savings - MyEggNest explains

Have you thought – really thought – about saving for your children’s future? For most of us, the £250 government voucher we receive when our child is born is a good kick-start for setting up a Child Trust Fund (CTF), but not all of us compare the different CTF providers, nor do we make regular payments in to the fund. Many of us, too, are unaware of the other children savings options on the market.

All Change for Child Trust Funds

Now, with a change in government meaning the end of CTF’s as we know them, it is more important than ever to make sure your child’s money is properly invested in the right plan for you.

MyEggNest.com, the UK’s leading independent children’s savings website, helps families make informed decisions covering not only CTFs but also the full range of children’s savings options available on the market.

Tax savings

While the current CTF allows tax-free savings of up to £1,200 a year, alternatives like Tax-Exempt Savings Plans are just as tax-efficient (only minus the initial free voucher). Unit Trusts for Children are another option and allow you to invest in a ‘pot’ (Investment Fund) which is managed on your behalf. National Savings Children’s Bonds (for those under 16) allow you to collect interests and bonuses completely tax-free, and for older children an Individual Savings Account (ISA) allows tax-free deposits of up to £7,000 a year.

Family contributions

It’s not only parents that can help build up a child’s nest egg – most of these plans allows grandparents, godparents and anyone with an interest in the child’s well-being to contribute. Another scheme which is open to anyone is a Children’s Stakeholder Pension, which offers high tax relief and no restrictions on starting or stopping contributions.

Which savings plan?

There are many ways of giving your child a huge head start in life but it can often be confusing and somewhat overwhelming when choosing which type of saving plan to go with.

MyEggNest’s comparison tables are a great source of information, providing a simple and quick way to view the wide range of options available, and the hundreds of parents’ reviews means that there is first hand advice and comment available from real users. For any other questions you might have, MyEggNest’s ‘Ask the Experts’ service puts you in touch with an independent Financial Adviser for free, impartial guidance.

MyEggNest.com also provides articles, give-aways and competitions, (with prizes including piggybanks, Mr Men toys, children’s savings books and cash-prizes), all to help encourage money-saving habits for both parent and child.

The issuing of new CTFs may soon be halted due to governmental budget cuts, but there are plenty of other ways to build up your child’s nest egg and we must not lose sight of the importance and benefits of saving for our children’s futures.

The true value of the Labour Child Trust Fund scheme was not the £250 voucher itself, perhaps not even the actual savings put aside, but the development of a better ‘savings mentality’ for all families in the UK is a legacy that we hope will grow from strength to strength.