It’s clearly important to seek professional independent financial advice if you are investing in equities for the first time to ensure you are investing in areas that are appropriate to your needs and suited to your risk profile. Do remember to check the charges of any funds or strategies you’re considering investing in, as the higher they are, the more they will eat into your returns.
In addition to using your own ISA allowance,
remember that any child born on or after 3 January 2011 and before 1 September 2002 is eligible to a Junior ISA in their own right. You can invest up to £3,600 each tax year and returns are totally tax-free, even if the money is invested by the parent or grandparent. Children born between 1 September 2002 and 2 January 2011 will have a Child Trust Fund (CTF), rather than a Junior ISA.
Money paid into a Junior ISA or CTF is locked away until your child reaches 18. It’s their money to which they have an absolute right to and so while you might have earmarked the money for education, they might choose to blow it on a car or a visit to Las Vegas instead!
The earlier financial preparations begin the better, even planning for university while the child is only a
baby. The longer you have to prepare for the event, the more that compounding of interest and or investment returns have to grow the capital sum. The key to success in planning for this major financial event is, as always, controlled and measured steps.
■ Accurately estimate all costs in present-day terms ■ Inflate this amount to what will be required by the time the money is needed.
■ Decide how this is going to be funded either by committing a lump sum or calculating how much you need to save every month.
Robert MacDonald
Robert is among the most highly qualified Financial Advisors in Scotland being a Certified and Chartered Financial Planner and has been in the business for more than 20 years. The views in this article are personal and provided for informational purposes only and should not be construed as recommendation by the publisher or investment advice by the contributor as laid down by the Financial Conduct Authority.
Clyde Life Magazine
www.clydelife.co.uk | 43
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