School Costs
You may need to find money for school fees – a week at a nursery is likely to cost around £88*; a young adult boarding at a private sixth form could cost £8,000 per term*. Not only could private education cost you more than buying a house, but it’s worth noting that school fees have risen three times faster than inflation over the last 20 years.
Planning to meet school fees requires time and thorough research. If you wish to privately educate your children but are concerned about paying the fees, talking to an IFA is a good start.
State schools may be ‘free’, but on average parents have to find £1,300 per child per year for school-related costs, such as transport, uniform, lunches, school trips, music lessons, sports equipment… the list is extensive!
With this in mind, it’s sensible to have a savings account set up as soon as possible to help each of your children along their way through school. With funds in place, your children will be able to get the most out of their school years.
If you can put £50 into savings for each child each month from birth, by the time they are 11, you’ll be ready for their secondary school expenses.
Saffron offer a number of children’s accounts, offering you a friendly, local place to start saving for your children’s futures. As your children get older, they can help by adding their pocket money or birthday/Christmas money to their savings. By getting children involved in their accounts, their financial literacy gets a real head start.
University Fees
As tuition fees rise, the cost of an undergraduate degree is now around £10,000 and likely to rise – and that’s excluding rent, bills and living expenses.
While some support is available in the form of student loans and limited bursaries, students typically emerge from higher education with thousands of pounds of debt.
• Why not help your children to put themselves through university? You could open them a savings account and offer to match or better anything they can put away…
• Alternatively, factor the fees and cost of living in to your financial planning. Depending on how old your children are, there may be an investment option out there that will deliver what they need by the time that they need it.
If you’re planning to invest to cover University fees, a conversation with an IFA is a good place to start! Visit our website, call 0845 600 7432, or ask in branch.
Getting on the property ladder
Many parents want to help their children buy their first home when the time comes, and with credit sometimes hard to come by, it’s often a well-received boost for your kids.
With first-time buyer properties in this region on the market for between £100,000 and £150,000, first-time buyers will need a deposit of between £10,000 and £30,000 depending on the value of the property and the size of the deposit required for the mortgage.
• Again, you could help them with their own savings by offering to boost whatever they can raise themselves.
• Alternatively, you may be eligible to be a guarantor on your child’s mortgage. This is a great option to ensure that your child is considered by a wider range of lenders.
If you’re exploring the options for getting your children on to the property ladder, a chat with one of Saffron’s mortgage specialists could help. Ask in your local branch for details, call 0800 072 1100 or take a look at our website.
Protection Planning
While your children are still financially dependent on you, it’s really important to have financial protection in place, to protect them from the unexpected such as bereavement or a major illness in the family.
Talk to our IFAs about life insurance, and income and wealth protection to safeguard against worse-case scenarios.
Visit our website, call 0845 600 7432, or ask in branch to find out more.
Wills
Though it’s not cheerful to think about, it’s advisable that everyone over 18 has a Will prepared and reviews it regularly and whenever their circumstances or family changes (eg: through marriage, separation
or every time a new child is born).
Making a Will doesn’t have to be complicated or expensive. Saffron offer a Will writing service through
our partnership with Flint Bishop, who are regulated by the Law Society. Call us on 0800 072 1100 for more information or visit our wesbite.
Inheritance
If your parents are approaching or already enjoying their retirement, they may be thinking about how to pass some of their wealth to their children and grandchildren, protecting as much from the taxman as possible.
There are ways of passing on some of your estate without incurring full tax liability.
• You can give gifts of up to £3,000 each year which will be exempt from Inheritance Tax.
• Put money into trusts – a legal arrangement which allows you to distribute wealth in accordance with your wishes. You can place conditions on the trust and keep some interest in it even though you no longer own it.
Some gifts made during your lifetime are exempt from Inheritance Tax because of the type of gift, or the reason for making it. For example, for a wedding or civil partnership:
• Parents can give cash or gifts worth £5000.
• Grandparents or other relatives can give cash or gifts worth £2,500
• Anyone else can give cash or gifts worth £1,000.
• Small gifts up to the value of £250 can be given to as many people as they like in any one tax year. However, they can’t give a larger sum and claim exemption for the first £250.
For more information about Inheritance Planning, visit www.direct.gov.uk or talk to our IFAs, call 0845 600 7432 or visit our website.
*Sources www.daycaretrust.co.uk www.privateschools.co.uk www.fundingeducation.co.uk
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