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saving for your childs future with junior isa projections

 

 

 

What your child could have at age 18

Give your child a financial boost for when they reach adulthood – to help open up a range of opportunities and their goals – no matter how big or small.

Saving for University?

They may not know what they want to be when they grow up, but when they reach age 18, a savings pot will help open up a range of opportunities. Further education at university is one of them, however the costs can be daunting.

 

saving for university money bad graphic

A three-year course for the 2021/22 academic year could see students leaving university with a debt of £46,026 (outside of London) or £54,537 (living in London).

With a tuition fee of £9,250 per year, this means that a maintenance loan for someone living outside of London is £18,276 – that is £6,092 per year and splitting that to per month means a student gets £507 to cover rent, academic bills, to eat and socialise. For someone living in London this is £26,787 for the three years, £8,929 per year and £744 per month.

So, although most students will be eligible for a loan from Student Loans Company which they will then pay off once earning a certain salary, a savings pot at 18 can provide that extra income each month. This money before university could take those money worries of every student away and not have to live the stereotypical student life of pot noodle for dinner 7 days a week.

 

How much could you save towards university?

(Click the boxes for more information)

 

£20
a month for 18 years

£7,470
at 18, with a 5% growth rate

This could give them an extra £200 a month to live on for 3 years.

If you opened a Junior ISA for your baby, and invested £20 a month for 18 years, your child could receive £7,470 at age 18. This could give your child £207.50 per month over a 3 year period to go towards university or living costs.

£150
a month for 18 years

£56,000
at 18, with a 5% growth rate

This could pay off future university fees.

A Direct Debit of £150 per month for 18 years would mean your child could have a Junior ISA value of £56,000. This could help cover off university fees and maintenance loans or give extra money for living costs.

£75
a month for 18 years

£28,000
at 18, with a 5% growth rate

This could help cover university fees and maintenance loans.

Saving £75 a month for 18 years could give your child £28,000 which could help them pay off their university fees.

Saving for their first home

 

house graphic saving for a first home with a Foresters Lifetime ISA

The average cost for a first-time home buyer today in the UK is £220,000. The housing market has seen some incredible increases over the years, especially for those living in London or the South East.

With an average deposit of 22%, means today you would need £48,400 – but this does not include stamp duty and other house buying fees.

However recently the banks have reintroduced a 5% deposit mortgage, which does give a glimmer of hope for today’s renters wanting to get on the property ladder.

 

Although we cannot predict how the housing market will be in years to come, we know that owning a home will always be a costly milestone for any young adult, and any financial boost would be gratefully received.

graphic - 71% of 23 to 38 year olds worry they will never be able to own a home

How much could you save towards their first home?

(Click the boxes for more information)

 

£50
a month for 15 years

£14,100
at 18, with a 5% growth rate

This could cover a 5% deposit and potentially extra house buying fees.

If you start saving £50 a month for 15 years (assuming your child is 3 years old), your child could have £14,100 at age 18. This amount could be a great boost towards helping your child get on the property ladder.

£200
a month for 15 years

£56,400
at 18, with a 5% growth rate

This could help towards a substantial deposit on a first home.

If you saved £200 a month for 15 years (assuming your child is 3 years old) their savings pot could be worth £56,400. This could give your child a substantial amount towards buying a property. Or your child could put down a 25% deposit on the average cost of a home today.

£9,000
single contribution in 15 years

£15,200
at 18, with a 5% growth rate

This could cover a 5% deposit and potentially extra house buying fees.

If you maxed out the full £9,000 for one tax year with 15 years of investment at a 5% growth, this could result in a £15,200 savings pot available at age 18. This amount could be a great boost towards helping your child get on the property ladder.

Saving for a car?

 

 

Another milestone that your child may want to tackle as they approach adulthood is learning to drive and gain that independence. Today, the cost of a provisional driving licence, lessons and theory and practical tests totals up to £1,551.

 

Car icon, how much could buying a car cost

 

However this would depend on how many hours of lessons and retakes are required. The average price of buying a first car (second hand) is currently £3,410, with an average yearly insurance of £972. Combined, this all totals £5,933.

 

 

So if you open a Junior ISA and save £25 per month from your child’s first birthday, at age 18 they could have £8,530, based on a 5% growth rate less charges. This could help cover the costs of learning to drive, passing and buying a car.

A Junior ISA with Foresters is a simple and affordable way to save towards a child’s future. Savings start from as little as £10 for monthly contributions and £20 for single contributions. You can contribute up to the annual contribution allowance of £9,000 for this tax year. 

Our Junior ISA invests in a professionally managed fund, meaning our fund managers at Schroders make all the investment decisions for you. Monthly contributions can increase each year in line with inflation, so this is another thing you don’t need to worry about when saving for your child’s future. 

Family and friends can also contribute to their future, making these milestones even more achievable for when your little one reaches adulthood. 

A Junior ISA with Foresters

Use our Junior ISA calculator to work out what your child’s Junior ISA could be worth at age 18. 

Junior ISA Calculator

 

Important information:

  • The amounts projected above are only estimates of what the savings could be worth on your child’s 18th birthday. They assume an annual growth rate of 5% and an annual charge of 1.5% (reducing to 1% after 10 years). Any monthly contributions also assume to increase by 2.5%pa to keep pace with inflation, subject to allowable limits.
  • These figures are only examples and are not guaranteed. The actual value could be more or less than shown, and could be less than has been paid in. What you will get back depends on how much your investment grows and on the tax treatment of the investment.
  • Inflation would reduce what you could buy in the future.
  • The Forester Life Junior ISA is a stakeholder account and as such meets the standard for capped charges.
  • There is an annual charge of 1.5% of the value of the funds you accumulate. If your fund is valued at £250 throughout the year, this means that we charge £3.75 that year. If your fund is valued at £500 throughout the year, this means that we charge £7.50 that year. After 10 years these deductions would reduce to £2.50 and £5.00 respectively.
  • These figures assume contributions and investment over 18 years (or a shorter period where mentioned). Top-ups to existing Plans will be invested for a shorter period depending on the age of the child at the time.
  • Every year we send a statement showing the value of the Plan.
  • All payments are locked into the Plan until the child’s 18th birthday and cannot be reclaimed by the donor(s).
  • For more information please read the Junior ISA Key Information Document and Brochure.
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