INVESTMENT SPECIAL: The kids can wait

The government wants you to save more. You might think that odd for two reasons. First, because if you are an average person you’re unlikely to have much extra to save; your mortgage payments may be lower than they were, but what the financial crisis has given you with one hand it is ripping away with the other. High inflation is destroying the purchasing power of your net income.

Secondly, if you watch the news at all you will know about the paradox of thrift. If we all start saving at once our horribly ill-balanced, consumption-based economy won’t be able to cope: economic growth will continue to collapse and we will all end up worse off. Still, there’s no accounting for the madness of government policy and so it is that from November you will be able to open a Junior Isa (Jisa) for your children (if they don’t already have a child trust fund) and pile whatever pennies you can scrabble out of your purse at the end of every month into it, up to a limit of £3,600 a year. The returns, both capital gain and income, come tax-free.

Should you start putting money into one of these things for your children? I bet you think this is a rhetorical question, but it isn’t. My children have child trust funds and I never put a penny into them. It isn’t that I’m unconcerned about their futures. I am. It’s just that right now I value my own financial security over their future financial security, and I suspect that if they were capable of thinking about it they would too. When they are 30 or 40 and buried under the expense of mortgages and school fees, will they really want to get a call from me saying I’m a bit short on the month’s nursing-home fees because I put too much into their Jisas when they were three? Odds are they’ll curse the Jisa, and me.