We have an 18 month old daughter, Emma, and are concerned about the future costs of university and getting on the housing ladder. How can we best prepare for these?

You have highlighted the two key financial issues for those leaving school in the coming years. Rising tuition fees mean graduation debts of more than £40,000 will become common place. Similarly, the requirement for sizeable deposits make it almost impossible for young first time buyers to get on the property ladder without financial assistance.

Any preparation you can make over the coming years could prove invaluable for Emma. She is eligible for a Junior ISA, a tax free savings vehicle which allows investment of up to £3,600 each year and can provide an attractive nest egg for her. The funds cannot be accessed until she turns 18, by which time Emma will formally own the funds so can do with them as she pleases. Additionally, your own ISA allowance provides a similar tax shelter but with the benefits of a higher annual allowance (currently £11,280) and retention of control over the funds when Emma reaches 18.

All children have their own Income Tax and Capital Gains Tax personal allowances, so it is possible to hold cash or investments directly in their own names, though care needs taken with the parental settlement rules.

A discussion with grandparents may also be beneficial as anyone could contribute into Emma's Junior ISA, the parental settlement rules do not apply to gifts from grandparents, and many grandparents will be reviewing their Inheritance Tax position and may be able to consider cascading funds down the generations.

This appeared in the May edition of Scottish Field.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.