It may have been said on many occasions over recent years, but the global economic climate has seldom looked less certain. Since the financial crisis began in 2008, many large and seemingly imperishable commercial companies have fallen on hard times, leading to an unprecedented number of cost-cutting drives; while in the public sector, many governments across the world, and not just in the UK, are resorting to severe austerity measures in order to reduce debts. When coupled together, these two factors have contributed towards the difficult employment scenario which many young people now face when they leave full-time education.
With this troublesome job market in mind, putting money away for your child’s future is one of the wisest decisions you can make. If Children’s ISAs aren’t factoring into your family’s finances already, here are three reasons why they should be:
If your children are planning to study at university, it’s never too early to start thinking about how they’re going to fund it, particularly if your son or daughter intends to take their studies further. Government loans are not available for many postgraduate courses, and students in many cases are expected to pay these tuition costs upfront. ISAs can be a real helping hand in these situations, and mean that your children won’t have to borrow more money from you, or supplement their already large undergraduate debt with a bank loan to cover fees.
Unforeseen employment gaps
Jobs don’t come quickly or as easily as they used to. The process of searching and applying for jobs has never been tougher or more laborious, and many young people and graduates may have to spend weeks or even months with no regular income while they hunt for employment.
Having money saved to cover living costs during this time will help to ease the burden. Instead of having to move back home, and potentially away from a concentrated job market, having an ISA to dip into will help your offspring to pay the bills while their job search continues.
Buying their first home
Buying a first house has never been harder. Due to rising house prices, many first-time buyers are now well into their 30s. Higher prices also mean higher deposits, and many mortgage lenders will now ask for 20% of the overall price upfront, making the buying process even tougher.
The property market will likely only become more difficult to navigate over the next few years, but starting up a Children’s ISA can help. By starting to put money away early, you can contribute towards your children’s future, helping them to get a deposit together for their first home.