Produced and edited by James Sandy, filmed by Petros Gioumpasis, animations by Russell Birkett
I'm Claer Barrett.
And I'm Lucy Warwick-Ching. And today, we're going to be talking about saving for children.
This is "Money Spinners."
Whether you're looking for a savings account for new baby or you want to invest for a grandchild, putting money aside each month will give them the best financial start in life.
And don't worry even if you don't have as much cash to splash as the royal couple, Harry and Meghan. We have some simple money saving tips for you to maximise your child's nest egg.
Tip number one, it's never too early to start saving for your children.
Absolutely. British parents can set aside up to 4,368 pounds into a junior ISA in their child's name and invest it in the stock market. And once they do, investment grows and returns are tax free. If you invest the maximum allowed amount from birth, your child could have amassed an investment pot of more than 130,000 pounds by the age of 18.
But remember, your child will be able to get their hands on that money from 18. And if that sounds like a nightmare to you-- and I have to admit then I don't like the sound of it myself-- then you might want to start saving into a pension instead. There's a lower limit on how much you can invest. But even children get basic rate tax relief. And they will have to wait till the age of 55 before they can access the funds.
Phew. Now of course, not everyone will be able to afford to save money each month for their child. And the big reason for that is the cost of childcare, which is why our top tip number two is to see if you're eligible for tax-free childcare. Under the tax-free childcare scheme, the government will contribute 20 pence for every 80 pence parents spend on childcare, up to a maximum of 2,000 pounds per year per child it's free money, people.
And for children age 3 and 4, you can get 15 hours per week of free childcare, doubling to 30 hours if both parents are working. Don't ask and you don't get, which brings us to the third and final tip, don't forget to claim child benefit.
If you or your partner earn more than 60,000 pounds, then you won't be eligible to have any actual money. But if you fail to register for child benefit online, then the stay-at-home parent could lose out a valuable national insurance contributions. And that's not all. Instead of buying toys for your child, why not ask friends and family members to contribute financially instead? Research from Hargreaves Lansdown shows that almost half of parents do so, and you can contribute up to 3,000 pounds a year tax free.
So there you have it, our "Money Spinners" top tips on saving for children. But perhaps the best piece of advice we can give you is that parenting is all about give and take.
You give your children all your love, and they take all of your money.