How saving £70 a month could set your child up with a £21,000 nest egg when they turn 18
PARENTS who start saving when their babies are born could give their child a nest egg worth thousands of pounds.
Putting money into a junior Isa can help you boost your savings - with just £70 a month turning into £21,000.
A junior ISA is a tax-free savings account for under 18s where you can save up to £9,000 a year.
As the tax year ends on April 5, you've got just over a month to make the most of this year's tax-free allowance.
If you saved £70 a month over 18 years, your child could get a lump sum of £21,000 when they hit the age limit.
That's assuming a growth rate of 5% and that you open the account when your child is born.
The figures, which you can work out by using , also account for fees of 1.5%.
The amount you'll get depends on how long you save and how much you put in each month.
For example, if you saved the full £9,000 a year you could have £228,919 after 18 years.
But that would involve stashing £750 a month into the Isa, which isn't realistic for many people.
How can I open a junior Isa for my child?
You can get a Junior ISA from a range of banks, building societies, credit unions, friendly societies and stock brokers.
Contact any of these directly for more information about how you can open a Junior ISA with them.
Make sure you compare different options first, to get the savings account that best suits your needs.
You can use a comparison website such as to do this.
Anyone can pay money into a Junior ISA, but the total amount paid in cannot go over £9,000 in the 2021 to 2022 tax year.
The money belongs to your child and cannot be withdrawn until they turn 18.
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