The first generation to be worse of than their parents, not if I can help it.

University fees are rising, houses are becoming unaffordable and the next generation is likely to be the first to be worse of than their parents. So what can we do,  as parents, to help our children and enable them to have opportunities in the future.

My wife and myself have decided that we want to try and build a savings pot for each of our girls. We’ve done this by opening a regular savings account with Halifax which pays 4.5% interest loans.  After a year the money is transferred into a Halifax children’s savings account paying 2%. We have standing orders in place to save into the regular saver account every month.

In addition to our regular savings contributions the girls grandparents will usually give money to add to the savings account for Christmas and birthdays. They think the children have enough and get enough toys as it is and they’d rather them have something to look forward to in the future.

Recently I’ve been thinking about the relatively low interest rate of 2% on the savings account. Now they’ve built up a decent sum of money and because we don’t want them to access it till they are in their late teens at the earliest I’m wondering whether the stock market would be a better place to put the money.

Whilst this is a more risky strategy,  the length of time we would be looking to invest should mitigate that risk. Historically over this time period the stock market performs a lot better than savings accounts. This could enable them to have a much greater savings pot in the future.

I need to do more research on the various options and discuss with my wife, but one thing is for sure, when they grow up and become independent  I want them to have the best start they could possibly have.

I’d be interested in finding out how other people are saving for their children’s future.