Don't Be An Egghead - Make Sure You Feather Your Financial Nest This Easter

DON'T BE AN EGGHEAD - MAKE SURE YOU FEATHER YOUR FINANCIAL NEST THIS EASTER 16 April 2003: Easter may be associated in most children's minds with chocolate eggs and handmade nests but parents should be thinking about another sort of nest egg for their offspring - the financial type, says PKF Financial Planning Limited. The Government's new Child Trust Fund (launched by the Chancellor in last week's Budget) highlights the need for parents to make saving plans for their children - but you shouldn't necessarily put all your eggs in one basket when it comes to feathering your family's nest. PKF helps take the wrappers off and shows you that a good plan will hatch a solid (if not chocolate) egg: It's never to early to start a pension. Grandparents should consider using a stakeholder pension to deposit up to £3,600 a year to make the most of the tax relief available. Building up a pension pot will certainly give them a financial head start. Sweeter in the long run. Unit Trust Saving Plans are ideal for the longer-term investment needed to acquire a decent nest egg. Risk is reduced by drip feeding into the fund rather than plunging into the stock market in one fell swoop. Safe as houses (and nests). The housing boom has tempted many investors into the property market. A lower risk alternative could be Property Unit Trusts - funds invested in high value commercial property. Trick or treat? Be wary of the hype over 'Children's Saving Plans' or 'Baby Bonds'. Check the terms as sometimes they aren't as good as other suitable methods of investment and can offer less flexibility. A born gambler? National Savings products are a steadfast way of saving for the future - but it is important to be aware that growth will be minimal, so consider whether security is the highest priority. Get an egg start with the Government. The new Child Trust Fund will give all new born babies (born from September 2002) a fund, based on an initial £250 to £500 that can be topped up with up to £1,000 per year, to be accessed when they reach adulthood. Over 18 years, a tax-efficient savings plan could build up a fund of around £30,000 tax-free (this assumes 18 lots of £1,000 investment and net growth of 6%pa). Eye up an ISA. Tax-free Individual Savings Accounts allow parents to save up to £7,000 a year. The share-based ISAs are particularly relevant for long-term investments. Traditional routes. Life assurance has long been a popular way to save for a child's future - but generally they only accept fairly small amounts of cash, so make sure you know how much you can afford to put aside each month/year. Go 'green'! A range of investment accounts exist which are focussed on ethical and socially responsible investment opportunities. These include ordinary bank and building society accounts through to stock market funds specifically for the environmentally conscious. Go wild! Investing in the unusual is an alternative for those who prefer to be more creative with their savings. Antiques, rare stamps, race horses, fine wines and vintage toys are some of the ways the more idiosyncratic investors spend their pounds. John Hutton-Attenborough, consultant at PKF Financial Planning Limited, said: "The Government has really kicked started the idea that saving for the future is vital with the launch of the Child Trust Fund in the Chancellor's Budget. There are a number of ways parents can help to build a more financially stable future for their children and finding out what suits their particular circumstances best is the difference between winging it and having a solid nest egg for their child. The amount you can save on a regular basis, the length of time you want to save for and the level of risk you wish to expose your savings to all play a part in making sure you don't find your nest egg ends up too small and cracked! Start early and get tailored advice for the best deal to get your children off to a flying start." - ends - For further information: Melissa Byrne PR Manager 020 7782 9335 Imelda Michalczyk PR Officer 020 7782 9380 Notes to editors: 1. PKF is one of the UK's leading firms of accountants and business advisors and specialises in advising the management of developing private and public businesses. The firm has more than 1,500 partners and staff operating in over 25 offices around the country. Principal services include assurance and advisory; consultancy; corporate finance; corporate recovery and insolvency; forensic; and taxation. The firm has particular expertise in advising sectors such as small and medium sized companies; charities; hotels and leisure; medical; professional partnerships; public sector; and technology. The firm's web site is www.pkf.co.uk. 2. PKF also offers financial services through its FSA authorised company, PKF Financial Planning Limited. 3. PKF is a member of PKF International, which has more 12,800 people operating in over 100 countries around the world. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/04/16/20030416BIT01110/wkr0001.doc http://www.waymaker.net/bitonline/2003/04/16/20030416BIT01110/wkr0002.pdf