Even if they just start off with a piggy bank, teaching children the habit of saving is one of the best long-term gifts you can give them.
Although children don't usually have income of their own, what they do have is time on their side. The earlier you start them off saving, the more chance the money has to grow. This can be particularly welcome when, for example, they need funds for higher education or buying their first home.
You can start your kids off with savings vehicles designed especially for children. There are just a few things to be aware of: if you make a gift to a child and the gift earns more than £100 interest per annum, you will currently be taxed as if it were your own money – although this rule does not apply to a Junior ISA (JISA). In other cases, for example a gift from a grandparent, the child will be taxed and like adults is entitled to a personal tax allowance.
There are many ways you can save for children. You can set up children’s accounts with banks or building societies, or choose products which have certain tax benefits such as National Savings and Investments' Children's Bonus Bonds, or a JISA. And not a lot of people know that you can even start a pension for your child - a radical idea, but the rewards can be dramatic.
Start planning for your child’s future today by getting advice from a financial adviser who can help you on the road to building up their savings.