As the news is announced that the Duchess of Cambridge is expecting her third child, Chris Atkinson, head of consumer distribution at Zurich UK, gives his top tips on how to start saving for your little one:
1 Scale down the risk
As your priorities and time frames change, it’s important to review the risk profile of your investments. Scaling back your level of risk may be a good idea in the short-term while you focus on long-term planning and saving, but speak to a financial adviser to determine the best approach for you. The Zurich Stocks and Shares ISA tool also helps you to peep at the future by selecting your risk and fund.
2 Write your will
It may not be a topic you want to address, but when children arrive it automatically means you have to think about inheritance and splitting your assets, and writing a will is all too often put on the back burner. A will should be made to support your family and should also be in date, so keep a regular check on what has been written and when.
3 Think about a savings account
Setting up a savings account and putting a little aside each month could really help down the line, accumulating to a larger amount if you keep it up. It also offers relatives the opportunity to contribute on a Birthday and Christmas. While this is something that will be aided by a rise in interest rates, it’s important to get a head start now. Alternative investments are also worth considering in the current environment such as stocks and shares ISAs.
4 Remember your benefits if you are self-employed
You can receive up to £2,000 per year, per child to cover annual childcare costs of up to £10,000. To receive the top-up from the Government, you need to set up an online childcare account, so make sure you are aware if this affects you.
5 Don’t forget your pension payments
There may be more immediate pressure on your finances, but don’t lose sight of your future financial support. Most pensions are flexible and allow you to increase or decrease your monthly payments, so can work with what feels comfortable according to your income and outgoings, and ensure you are still building up that pot for later life.
Chris Atkinson, says: “Starting a family is an incredibly exciting time, but it can also be a significant financial challenge. In fact, the estimated cost of raising a child is more than £230,000, so, it’s no small undertaking. But, while these may be the priorities for parents across the board, if you’ve just become or are expecting to become new parents there are plenty of things to think about to prepare yourself financially.
“It may seem too soon to be considering university fees, weddings or driving lessons for your little one, but starting saving early and adopting the ‘little and often’ approach will serve you well. Exploring all your savings options is the best place to start, and seek the guidance of a financial adviser if you’re unsure.”