Children savings, further education costs, University fee planning, ISA, junior ISA, child tax credits

Please note all of the characters in these stories are fictional. However all of the circumstances that have been mentioned in these stories can and have happened in the past.

Finance your children’s future

Naturally you want the best for your children. But these days that can come at a price. Supporting a child through further education and helping them get on the housing ladder can put a strain on your finances.

At Essential IFA we can help you take the strain by planning your investments tax efficiently. Whether it’s about providing a fund to cover university top–up fees or the deposit on your son or daughter’s first house, we can offer expert, professional advice that could reduce your financial commitment substantially.

Ben and Charlotte’s story

Having gained three A grades at A–level, Ben decided to study to become a doctor. By the time he completed his studies, Ben’s parents, who run their own business, had been forced to increase their mortgage by £15,000, even though Ben himself owed £20,000 through his student loan. It wasn’t until his father suffered a heart attack through stress and overwork that Ben realised what a sacrifice his parents had made to finance his education.

Seeing the strain that her father was under, Ben’s sister Charlotte, who wanted to train as a solicitor, decided to save money by living at home and studying with the Open University.

Ben and Charlotte’s future without financial planning

  • Ben insists on repaying his parents’ additional mortgage as well as his student loan. Consequently he can’t afford to buy his first house until he is well into his 30s.
  • Ben’s father has to sell his company and retire early due to ill health. He and his wife are forced to live on a very modest income and can’t afford to help fund Charlotte’s education.
  • Charlotte has to work full–time as a legal secretary and study in her spare time. It takes her five years to get a degree.

Ben and Charlotte’s future with financial planning

  • When Ben and Charlotte were born, their parents opened a children’s discretionary trust fund into which they and the children’s grandparents made regular payments. The also took out life and critical illness insurance.
  • When Ben goes to university there is enough in the trust fund to help purchase a three–bedroom flat. Ben rents out the other two rooms to fellow students, which pays the small mortgage taken out on the flat and provides a surplus for day–to–day expenses. At the end of his studies, Ben sells the flat and makes a small profit, which goes towards repaying his student loan.
  • The trust fund also finances Charlotte’s education in the same way. When she finishes at university, the remainder of the fund is given to her and Ben to provide deposits to buy their own homes.

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