Welcome to our guide on Saving and investing for the next generation
Taking proactive steps in securing your child or grandchild’s financial future is a multifaceted endeavour requiring thoughtful planning and strategic decision-making.
Today’s young generation is anticipated to face a future with considerably higher expenses than their parents and grandparents.
The rising education, housing, and general living costs have created a financially challenging landscape. As such, many parents and grandparents are taking proactive measures to provide a financial safety net for their children and grandchildren.
Additionally, a greater awareness of the importance of financial planning and wealth accumulation has prompted many individuals to take proactive steps in securing their children’s financial futures.
Investing in your child or grandchild’s future is a thoughtful and responsible step towards securing their financial stability.
In the UK, initiating an investment early for a child makes sense and can be highly beneficial in the long run.
This compounding effect can significantly boost a child’s savings over time.
Why start investing early?
Investing early for your child or grandchild has a multitude of benefits. It maximises the power of compound interest. Simply put, the sooner you start investing, the sooner you start earning interest on the interest you’ve already earned. This compounding effect can significantly boost a child’s savings over time.
Early investment also has the potential to provide a higher return on investment. The rationale behind this economic case is that the longer the investment period, the higher the potential returns, making early childhood an opportune time to begin investing.
Additionally, starting a pension for a child, despite being many decades away from their retirement, makes financial sense. It is a long-term investment that could provide a significant nest egg when your the child reaches retirement age.
Only a parent or guardian can open up a pension for a child, but then anyone can make contributions.
Our ‘Guide to Saving and Investing for the Next Generation’ explains.