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Time to invest in a Junior ISA, advises Family Investments

According to children’s savings provider Family investments, the monthly cost of living for students has risen by 34% since 2004, not taking into account tuition fee increases.

As a result, the company believes parents need to start saving while their children are young in order to support their offspring when the time comes for them to go to university.

If the cost of living continues to rise at current rates, students starting a degree in 2011 may see annual costs hit £11,253 by the time they graduate in 2014.

Kate Moore, head of savings and investments at Family Investments, says: “For the average family, covering these costs is likely to be a significant challenge, and parents who want to give their child a helping hand will have to start saving early.

“It is more important than ever that families plan their finances in advance and set up saving measures as early as possible.”

The company claims one of the best ways to start saving in advance is through its Junior ISA, a new tax-efficient savings account for children that will be available from November 1.

Ms Moore adds: “Parents that are fortunate enough to be able to save the equivalent of the current child benefit allowance of £81.20 each month could potentially build a sum of £29,300 after 18 years.

“This is a significant sum that could pay for a decent slice of their child’s living costs or cover their tuition fees.”

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