Saving for your child is about preparing them for the big financial milestones ahead. Your goal might be to ease the pressure of university costs, support a first home deposit or simply give them some breathing space when they start adult life.
Starting early makes the biggest difference. Even modest monthly amounts can build into something meaningful over time. Here are some practical ways to get started.
Start with what you aim for
Before choosing where or how to save, be clear about what you’re working towards. For many parents, the focus tends to fall on two major milestones:
- University: Students finishing in 2024-25 are graduating with average debts of around £53,000.
- First home: In 2024, first-time buyers put down average deposits of £61,090.
You might choose to cover part of these costs or aim for the full amount. Either way, understanding the size of the goal helps you build a realistic savings plan.
When and how much
The earlier you start saving, the more manageable the monthly commitment. If your child is a newborn, you’ve got 18 years to build up. If they’re already a teenager, the window is shorter.
Here’s what might be needed:
University and living costs (£50,000 target)
| Time until needed | Monthly saving (cash, no growth) | Monthly saving (investing, 5% annual growth)* |
| 18 years | £230 | £150 |
| 10 years | £415 | £320 |
| 5 years | £835 | £725 |
*The figures shown are for illustrative purposes only and are based on assumptions that may change. They are not a reliable guide to future performance. The value of investments can go down as well as up and you may not get back the full amount invested.
First-home deposit (£60,000 target)
| Time until needed | Monthly saving (cash, no growth) | Monthly saving (investing, 5% annual growth)* |
| 18 years | £280 | £180 |
| 10 years | £500 | £380 |
| 5 years | £1,000 | £865 |
*The figures shown are for illustrative purposes only and are based on assumptions that may change. They are not a reliable guide to future performance. The value of investments can go down as well as up and you may not get back the full amount invested.
Where to save
Once you know your goal, the next step is choosing the right place to put the money. Different accounts come with different levels of flexibility:
Cash savings in your name
A simple option that keeps you fully in control. The downside is that interest is taxable, growth is limited and inflation can chip away at the value over time.
Cash in your child’s name
Useful if you want to earmark money specifically for them. Just be aware: if the interest is more than about £100 and the money came from you, the tax still falls back on you.
Junior ISA (JISA)
Lets you save up to £9,000 a year tax-free, with the money locked away until your child turns 18. Brilliant for long-term goals, but not as flexible if you think you might need access sooner.
Using your own ISA
Some parents prefer to save for children within their own ISA. It gives control, but does eat into your personal allowance, which you may want for your own future planning.
Other options for longer-term saving
- Junior SIPPs: these are pension-style accounts for children. They’re powerful for the very long term, but the money is tied up until retirement age.
- Child Trust Funds: these accounts were only available to children born between 2002 and 2011, so no new ones can be opened. But if your child already has one, it’s worth checking the balance, reviewing how it’s invested and topping it up if you want to keep using it.
And remember, you don’t need to have the perfect setup from day one. Even small, regular contributions make a difference. The earlier you start, the easier it is to build up.
Building good habits
Saving for your child doesn’t have to fall entirely on your shoulders. Bring them into the conversation early so money feels more natural as they grow up. Encouraging them to save part of birthday money, weekend jobs or a first pay cheque can help them build strong habits for life.
On your side, small steps add up too. Trimming £50-£100 from monthly spending, setting aside windfalls like bonuses or gifts, and automating transfers into a JISA or savings account can all keep the plan on track without feeling overwhelming.
But before you start, remember the flight-safety rule: put your own mask on first. Make sure you’ve got your emergency fund in place, any high-interest debts under control and your own retirement planning underway. Only then does it make sense to lock money away for your children.
Want to explore the right approach for your family?
A coach or financial adviser at Octopus Money can help you build a plan that balances saving for your children with your own long-term goals.
👉Book your free Starter Session here
Important information
Nothing in this article should be taken as investment advice. If you’re unsure what’s right for you, speak to a regulated financial adviser. The value of investments can go down as well as up, and you may get back less than you invest. Past performance is not a reliable indicator of future results. Tax treatment depends on your circumstances and may change. Your capital is at risk.
