Saving for your child’s future

There are lots of different ways you can help secure your child’s financial future. These include savings, pensions and retirement planning.

Children’s savings choices

Parents and grandparents can help children get into good money habits early. From setting money aside for their future to getting them used to saving.

By putting away little and often into a savings account, the interest earned can really add up. It can be the start of a deposit for a car or flat, or give the child financial security for the future.

Showing children how to save

Putting away a little each month can help children to learn about being careful with money. There are many benefits to opening a savings account for your child, including:

  • Creating good habits.
  • Providing a safe place to keep money.
  • Helping children set and work towards their savings goals.
  • Allowing children to earn interest, which can grow over time - even on small sums.
  • Supporting future financial security.

Ways to save

We all want our children to have financial security. There are things you can do to plan ahead, to help give them financial stability in the years to come.

Children’s savings account

Savings accounts for children are a great way to put away money for them to use in the future. Or you can encourage them to save with their own savings account. 

Adults over 18 can open a child savings account, for a child under 16 and deposit money into it. You can keep track of the money you’ve paid in and earn interest on it over time.

Learn more about child savings

Child Trust Funds and Junior ISAs

For children born between 2002 and 2011, there’s a possibility that they have a Child Trust Fund as part of the governments financial scheme. Although Child Trust Funds have been replaced by Junior ISAs, it’s important to remember that existing accounts can continue to receive contributions, or parents can opt to transfer their savings into a Junior ISA.

Child Trust Funds and Junior ISAs can be managed by parents or guardians until the child reaches 18. At this milestone, the funds can be transferred into an ‘adult’ ISA, at which point your child can manage the funds.

Ask HMRC to find a Child Trust Fund Child Trust Fund link

Child pension

Any parent or legal guardian can set up a child pension, to support a secure financial future for their children. Your child can access these funds once they reach the age of 55. This is set to increase to 57 years old in 2028, with the possibility of further adjustments in the future. 

Each tax year, you can contribute up to £2,880 into a child pension. The government will then boost this amount by 25%, increasing your yearly total to up to £3,600. Any growth is tax free. Like any investment, the value of your fund can fluctuate, meaning it can go down as well as up. 

Learn more about child pensions Learn more about child pensions at MoneyHelper link

Wills and inheritance

A Will isn’t just about money, it can also set out financial arrangements and appoint a guardian for your children, if anything happens to you. You can outline your desires about financial provisions for your children whether that’s monetary or making them beneficiaries for any existing policies.

It’s important to consider who you want to appoint as their guardian, and the timing of when the child should receive full control of their inheritance.

See Citizens Advice Scotland See Citizens Advice Scotland for more information link

Information correct as of June 2023.

Savings tips and tools

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