Saving for your child's future is always a good idea. If you're in the UK and have a child that was born after on or after 3 January 2011, or before September 2002, then they may be eligible for a junior isa account. This account can help build a tax-free (up to £3,600 each tax year) nest egg for your child until they are 18 years old. After age 18, the child would have access to the account and would be able to spend it however they wish. Ideally, the money would go to college or higher education. If money has already been set aside for that purpose the account would be great for down payment on your son or daughter's first home, or even just a rainy day.
I wasn't fortunate enough to have money set aside for me into adulthood, but I am considering opening an account for my daughter. Even just saving a little bit of money every month adds up over the course of years. If I started to save when my daughter was an infant, that would be a considerable about of money for her when she turned 18. The only downside of a Junior ISA is that the money can't be designated for a specific purpose, like for college or university. Ultimately, you would have to discuss how to properly manage finances with your child before they have access to the account. The last thing you would want to happen is see the money saved for your child spent wastefully.
Here are five reasons to start a Junior ISA:
1. Money for college/university
2. Down payment for a house
3. Emergency funds
4. Travel abroad during Gap Year
5. Save for retirement