A private education could help your children realise their potential in academia, sports, and the arts. It could also give your child a better chance of progressing to a prestigious university.
But private education isn’t cheap.

In a recent interview, managing director of Amber River SFIA (and school fees planning specialist), Chris Procter, revealed the average fee for independent schools is £16,656 per child per year, increasing to £36,000 for boarders.

Following school, you may want to support your child through university. Paying their tuition fees and helping with living costs could allow them to start their working life debt-free.

As of 2024, tuition fees are £9,250 a year in England and Wales and £4,750 for Northern Irish students studying in Northern Ireland. If your child is Scottish and wishes to study in Scotland, they won’t have to pay tuition.

It’s becoming increasingly common for parents to help their children with the deposit on their first home. Indeed, the Guardian reports that 32% of first-time buyers in 2023 had received support from their families.

By contributing to their deposit, you could help your child get on the property ladder, something that’s becoming increasingly challenging for young adults. According to the Independent, the average deposit for a first-time buyer is £53,414.

A Junior ISA (JISA) can be a tax-efficient way to save and invest for your child’s future. You can contribute up to £9,000 a year (2024/25) to a JISA and doing so doesn’t affect your own £20,000 ISA allowance (2024/25). Returns on cash and investments in a JISA are exempt from Income Tax, Dividend Tax, and Capital Gains Tax.

There are two types of JISAs: Stocks and Shares, and Cash JISAs. As you can read in our recent article, investing money for your child could give you a greater chance of growth in the long run. If you open a JISA for your child when they’re born, they could benefit from 18 years of returns, potentially giving them a healthy sum to fund their university fees or to put towards a first home.

It’s worth noting that once your child turns 18, they can use money held in their JISA however they see fit. So, it’s important you clearly communicate your wishes for any money you save for them.

JISAs replaced the Child Trust Fund (CTF) in 2011. Though you can no longer open a new CTF, you can continue to pay up to £9,000 a year (2024/25) into an existing account.

HMRC provides a tool to help you find any lost CTF accounts. You can transfer existing accounts into JISAs if your child is under the age of 16. When your child or grandchild turns 16, they’ll be able to manage their account themselves. This means they could:

• Pay money into the CTF
• Switch the account to another provider
• Transfer their CTF into a JISA

When they turn 18, they can access the money in the account. If they leave the money untouched, the account will automatically turn into an adult ISA. As with a JISA, your child can choose to spend the money in their CTF however they like, so it could be important to discuss your wishes with them.

A trust is a legal arrangement you can use to hold assets and then pass the money onto your child once they reach adulthood.

One benefit of trusts over JISAs is that you can specify how money held within a trust is to be used. This could enable you to gift money to your child for a specific purpose. For many types of trust, you also appoint a trustee to oversee the wealth for your child. The trustee could act as a mentor to ensure your child makes sensible financial decisions with the gift you’ve given them.

Additionally, assets placed in a trust may be considered outside of your estate when calculating Inheritance Tax (IHT).

Rules around JISAs, trusts and taxes are complicated and subject to change. Speaking to an Amber River financial planner will help you cut through the complexity and create an appropriate plan that gives you, and them, the right outcomes.

Instead of investing or saving money in your child’s name, you could gift them money from your own savings and investments.

Adult ISAs allow you to save and invest tax-efficiently and, if you use all your annual ISA allowance, you could also invest using a General Investment Account (GIA).

Saving and investing using an ISA or GIA held in your name ensures you retain control over the money and can gift cash to your child for specific purposes.

When you take out an investment bond, you can divide it into segments designed to meet different investment objectives.

You could earmark a segment to support your child’s future costs like education or a deposit and then withdraw money tax-efficiently when needed. You can withdraw up to 5% of your original investment a year without having to pay an immediate charge. Instead, the tax is deferred and becomes payable when you cash in the bond or it matures.