This is all about your child’s future. Every newborn child, born after 1st September 2002, receives a voucher worth £250 from the Government, when you as parents register for Child Benefit.
This voucher has to be used to open an account called a Child Trust Fund (CTF) account. This account belongs to the child and can’t be touched until they turn 18, so that they have some money behind them to start adult life. Through the years you and friends and family can put more into it. The Government makes a second contribution when your child is seven (and will perhaps contribute a third time in their teen years). It could be used for further or vocational education, to fund a gap year, to buy a car or even put a deposit on a house or flat or start their own business.
Your child/children will see the example you have set and start to realise the value of saving. Understanding financial planning is an important life skill to learn.
So, if your child has a CTF, use it wisely to save for his/her future. If your child is too old to qualify, you can still save for them in a special savings account.
Simple ways to explain about banking to your child/children.
Managing money is an important life skill. A good way for your children to get started is to learn how to budget: planning for what comes in and what is needed to pay out. When your child has a basic understanding of money, you can make budget sheets (on paper or on a computer spread sheet) - and it’s easy to show your child how to do one.