As any parent knows children can be very expensive. Even before a child is born there seems to be more and more costs parents are facing; scans, baby showers and maternity care just to name a few.
Parents understand that whilst their children are young, there will be numerous costs that they have no choice but to pay for; childcare, uniforms, clothing, presents and the ever-growing electrical devices that the newer generation “must-have”.
So, once they have reached their later teens the cost of your child should start to reduce in terms of day-to-day costs but what about those important big milestones in your child’s life? As a parent, you want to do as much as you can to help with these events, but these events can be some of the biggest expenses you will face in your child’s life.
University Fees
With more children opting to go to university, a lot of parents want to help them with the tuition and accommodation costs. According to the National Student Money Survey, the average cost of going to university is between £57k to £60k between tuition, accommodation and general living costs. With reports in the likes of the Independent saying parents are saving for university before their child is even born, when should you start saving?
Wedding
Once the joy of the engagement announcement has worn off, the reality of the cost of the wedding starts to hit home. According to bridal magazines, the cost of a wedding can range from £7k to £67K with an average cost of £21k. Nowadays most couples pay for some or all of the wedding themselves although according to www.weddingwire.com 52% of the wedding cost is covered by parents/family.
House Purchase
The biggest purchase any of us make is the purchase of our homes. With rising house costs, getting on the property ladder is getting harder without help towards the deposit. Average house prices in the UK have risen to £367K according to Rightmove, with the average cost of a first-time buyer home at £218k. Based on a 10% deposit rate that would be £21,800.
First Car
Your child has passed their test and, if like me, your 17 year has already decided that she wants a car as soon as she has passed you will need to have the funds readily accessible. The average cost of a first car is £3,562, the first-year insurance an average of £1,737 and the first year of road tax costing £125 – totalling a massive £6,071.
Grandchildren
Your children no longer need any financial assistance but then along comes grandchildren and the cycle starts again. Do you as a grandparent help towards the costs of the big events we have discussed? Maybe you want to help towards schooling costs or maybe you want to be able to take the family away on regular holidays.
So how do you know when to start saving, how much you need to be putting aside and what saving accounts should you be looking at?
At Magenta, our role is to guide and support you to find the answers to these questions.
There are a lot of areas that need to be thought through, such as what event, or events, do you want to save for, as this will determine the amount you need. Monthly contributions can be assessed once we know how much you need to save and when you think this will be needed.
With a myriad of options such as Trusts, Junior ISAs, and Lifetime ISAs for your savings how do you choose? With our knowledge of the allowable contributions, access rules and tax implications we will be able to recommend the most suitable solution for you.
Our team at Magenta have the knowledge and experience to set you on the right path and hopefully also add in some planning for your own significant life events.