The material on this website is for information only
and is not intended as any recommendation or endorsement of any products or companies mentioned. We are not licensed by the FSA to give financial advice, and none of the material on this website constitutes or is intended to constitute financial ...
News
This is MoneyBorrowers applying for credit cards, personal loans or even mortgages could ...This is MoneyMoney Mail revealed the development last week following a conference for credit experts at the University of Edinburgh Business School, which is behind the research suggesting personality tests can be effective. More than 400 representatives of High ...
Telegraph.co.ukCashback cull: Tesco halves Clubcard points for 2.8m credit card holdersTelegraph.co.ukRBS, NatWest and Capital One have already cut cash incentives paid on credit cards as a result of the changes. Capital One, one of the UK's biggest card providers, was the first company to cut its cashback deal. As of June, customers now no longer earn ...and more »
Western Morning NewsRSPCA snoops on the wills of donors who it is claimed are seen as 'walking ...Daily MailThe RSPCA pays investigators to assess how much money donors might leave in their wills, the Mail can reveal today. The charity does not tell supporters their personal data is being used to give them a wealth rating – or that cash they have donated is ...Cornish dementia sufferer loses £35k after 'charity sells personal data'Western Morning Newsall 103 news articles »
The Australian Financial ReviewCall a cease-fire in the war on cashThe News JournalFigures this week from credit-card company Mastercard show spending by contactless payments in the U.K. soared more than fivefold in the past 12 months, while the number of transactions quadrupled, albeit from a low initial base. Britons have been ...Paywave society should not give up on cold hard cash just yetThe Australian Financial Reviewall 2 news articles »
Mobile World LiveWhere's My Money? PayPal Is Your New Debt CollectorPC MagazineWhen debtors head to the personalized link (paypal.me/[yourname]), they will be able to quickly input how much they owe and pay through their PayPal account or credit or debit card. The money is then transferred to the PayPal account of the person who ...PayPal to users: name your money (and your price)Mobile World LivePayPal now lets you send and receive money through URLsMashablePayPal offers personalised payments designed for the “instant messenger ...Retail Timesall 92 news articles »
Have you met...
Latest Members:


debra barnes


ganool168


Noiajf


mone


AGreen


madashell


Fraser

 

Saving for your children's education.

Five top financial tips for parents

Start saving early to send your children to school and university. As more people face reduced pay packets or even redundancy, saving and planning for your children’s education has become even more important.

In addition to reduced incomes, families have also seen the average school fee increase by more than 10% a year over the past few years. Little help is available to parents as specific ‘school fees funding products’ can no longer keep up with this increase and have been withdrawn, and despite many private schools being registered as Charitable Trusts, school fees are not eligible for tax relief.

As well as school fees, parents also need to be prepared for university costs to increase.

Now that university is considered to be a normal part of higher education, Geoff Everett, tax director at Smith & Williamson, is concerned that fees may increase at a similar rate as school fees.

He says: “If this happens, in 10 years’ time we could see fees reach £7,200 a year. Living expenses and books cost roughly the same amount as fees, so if we use a scenario where the fees rise by 10% and the living expenses rise by 3%, the combined annual cost for a single student in 10 years’ time could be over £11,000 a year.”

So what can parents do to prepare for these costs?

Geoff advises: “Start early. If your child is still relatively young, for example in junior education, there is still enough time to invest on a regular or lump sum basis.

“How you invest will depend on your particular circumstances but as far as possible parents should aim to minimise their combined tax bills by making full use of their tax allowances and the lower tax bands.  Tax-free opportunities such as ISAs should be considered for anyone aged 16 and above and don’t forget everyone, whatever age, has an annual tax-free capital gains allowance, currently of £10,100 (for 2009/10).  

“If you put income-producing assets such as shares or cash deposits into your child’s name, as a parent you will generally be taxed on the income. However, if the asset comes from others, for example grandparents, the child can receive income up to £6,475 per year tax-free, so this can be a very tax efficient arrangement. It may also result in inheritance tax savings for grandparents.

In addition there is a valuable IHT relief for regular gifts within normal expenditure. This means that if grandparents pay school fees on behalf of their grandchildren, or make regular gifts to the children in anticipation of school fees or other expenses, those payments would escape future IHT liability provided the grandparents are left with sufficient income to live on.

It’s also worth noting that capital gains are treated as the child’s even if you provide the assets, so a parent could gift or buy assets, which aim to generate capital gains rather than income, to a child and the child could sell them, making a capital gain each year of up to £10,100. The key is to plan ahead!”

Smith & Williamson’s top financial tips to help parents funding school fees or university costs:
•          Save early
•          Consider ISAs and other tax-free accounts
•          Take advantage of capital gains allowances, currently £10,100 per person per year, irrespective of age
•          A child can earn tax-free income from assets gifted by non-parents
•          Discuss with grandparents the possibility of them helping to pay school fees


Advertise with us  |  Privacy  |  Terms & Copyright                                                                                     Website maintained by USP Networks