Give your child £18,000 on their 18th birthday by saving just £1.67 a day


PARENTS could give their a child a whopping £18,000 windfall to start their adult lives with by simply saving £1.67 a day.

According to investment company The Share Centre, if you stash £1.67 a day into an investment account and leave it alone it’ll be worth £18,000 in 18 years’ time.

Save £1.67 a day in an investment account and you could have £18,000 in 18 years

That’s based on the 5 per cent average annual return over the last 18 years for those who invested in a fund tracking the fortunes of the FTSE All Share index of UK companies.

You also need to keep any returns in the account – an effect that’s known as compound interest because you’re effectively earning interest on your interest.

To get the same sum of cash from a cash savings account you’d have to contribute nearly twice as much at £2.65 a day.

That’s because cash savings typically return much less, and this figure is based on one of the lowest paying accounts at the moment that returns just 0.35 per cent. See our top savings accounts guide for the best buys.

How to protect yourself from an investment scam

TO avoid falling victim to investment scams, you need to remain vigilant when making investment decisions.

  • Reject unsolicited investment offers, whether made online, on social media, or over the phone.
  • Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised. Also check the FCA Warning List of firms to avoid.
  • If in doubt, steer well clear.
  • Get impartial advice before investing.

Signs that should set the alarm bells ringing include:

  • Unexpected contact – while you may be on your guard for cold callers, you now need to be alert to contact out of the blue from all sorts of online sources, such as email or social media. The same applies to contact you may get through the post, via word of mouth, or even in person at a seminar or exhibition.
  • Time pressure – beware if someone offers you a bonus or discount if you invest before a set date or says the opportunity is only available for a short period.
  • Social proof – keep an eye out for fake reviews and claims that other clients have invested, or want in on the deal.
  • Unrealistic returns – watch out for fraudsters promising tempting returns that sound too good to be true, such as much better interest rates than elsewhere.
  • False authority – don’t get tricked by convincing literature and websites, or investments which claim to be regulated. Also be wary of someone speaking with authority on investment products.
  • Flattery – be on your guard if someone tries to build a friendship with you. They may be trying to lull you into a false sense of security.

And the same goes for other milestones. The Share Centre reckons you need to put away just £1.57 a day to generate a £21,000 lump sum by your child’s 21st birthday.

While saving £30,000 by your child’s 30th, means you only need to put away £1.16 per day.

But investing doesn’t come without risk – unlike cash, what you save can go both up and down. This means you can be left with less than what you started with.

And you’re not protected by the Financial Services Compensation Scheme (FSCS) which covers cash up to £85,000 per financial institution.

There are of course ways to reduce the risk of investing – for example you could opt to invest in cheaper so-called “passive funds” that track the fortunes of various stock markets, such as the FTSE100.

Investing in managed funds – that pool different types of investment together – is also less risky than just investing in individual companies, known as shares.

If you invest you’re likely to make more money than if you save in cash
Getty – Contributor

Robo-investing – where a computer determines what you should invest in based on your preferences – is also likely to generate smaller returns but again it comes with lower risk.

If you’re unsure, you should always seek professional advice first – you can use comparison service Unbiased or VouchedFor to find a suitable financial adviser.

Andy Parsons, head of investments at The Share Centre, said: “As Albert Einstein famously stated, ‘compounding interest is the eighth wonder of the world’ and these figures clearly demonstrate this.

“Providing you set yourself a long enough timeframe and remain committed to investing, the results can be truly fantastic.

“Lots of people are cautious about investing in the stock market, and with stories of businesses going under appearing in the media on a daily basis, that’s understandable.

“But if you can invest for more than 18 years, history says you should end up with more than you started with.”

We spoke to one reader who was scammed by a fake Bitcoin company after looking for a way to make some extra cash after being signed off work.

A disabled man also told us how he spent 13 years paying back the £50,000 he lost after falling for a “fake” shares investment scam.

Action Fraud reported last year that fraudsters had conned timeshare victims out of £7million – for a second time.


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