A little-known pension trick has been making waves online, allowing parents to give their children a financial head start from infancy. The trick involves using the Government's Child Trust Fund (CTF) scheme to pay into a junior ISA, which can then be invested in Premium Bonds.
Premium Bonds are a popular investment for younger relatives, offering the thrill of the draw with the chance to win up to £1 million. But what does it mean for UK savers and investors?
According to the NS&I website, the average prize pot for Premium Bonds is around £900, but some lucky winners have taken home much larger sums. The organisation recommends investing as little as £25 per month to be in with a chance of winning.
But experts warn that investing in Premium Bonds or pensions should be done carefully and with professional advice. 'While it's great to encourage children to start saving early, parents should not rely solely on these investments,' says a financial expert. 'Diversifying your portfolio is key to long-term success.'