As parents we always want what best for our children. Be it now, or in later life when we may not be here to look after them. With the phasing out of the child trust fund all but complete and a wait until November for its replacement, the Junior ISA parents have turned to children’s stakeholder pensions as a way of investing in their parents futures.

Parents with children born since January 1^st this year will find that their children are not eligible for a Child Trust fund voucher, and as such need other ways of saving for their children in a tax-efficient way.

The Junior ISA, which will replace the child trust fund and will provide parents with tax free savings of up to £3000 a year is coming soon but won’t be available until November.

Child Trust Fund providers have also been criticised for the poor returns their products have shown, and many parents are looking at other avenues now providers no longer need to attract new customers with their best fund managers.

The gap between the outgoing child trust fund and incoming Junior ISA has also caused some concern with those parents whose children are eligible for a Junior ISA unable to invest in a Junior ISA instead, regardless of which product offers the better returns.

The Daily Mail have gone as far as creating a campaign to get the government to merge the two products allowing parents the choice.

Parents disenchanted with the tax free savings accounts have started to look at other avenues while they wait for the Governments decision as a result of the campaigns.

Some parents are starting to look at Tax Exempt Savings Plans and Children’s Pensions as alternatives for savings for their futures.

Children’s pensions work in the same way as adults stakeholder pensions, with parents attracted to the benefits their children will see from savings that have so long to maximise returns. Tax incentives also increase the parent’s contributions by 25%, allowing parents to increase their own children’s eventual retirement income.

PriceWaterhouseCooper have revealed research that they believe shows the only way Britain can return to the levels of public debt seen before the credit crunch is to increase the state pension age to 70 by 2046, and to implement a further £20billion of spending cuts.

With increased life expectancy making retirement planning increasingly difficult, PwC believe the government will only save money by reducing the number of people who receive the state pension.

PwC published a paper ahead of the Office for Budget Responsibility’s first long term report on the fiscal sustainability of the UK in the long term. In the paper PwC revealed that the ageing population would leave public debt at 90% of gross domestic product, and would be rising by 2050.

The report believes that if the government were to increase the state pension age to 70, instead of the current plan of 68 by 2046 they would see debt levels of 80% of GDP instead.

Chief economist from PwC, John Hawksworth explained, “The government has already taken steps to address this problem through reforms to public sector pensions and has started the process of raising the state pension age. But the bigger challenge relates to health and long-term care costs.”

The government have already announced plans last year to increase the state pension age to 66 for both sexes by 2020, and to 68 by 2046, earlier than had previously been announced by the Labour government.

In 2007 public debt in the UK was around 405 of GDP and PwC added that to find the pre credit crunch levels again the country would have to fiscally tighten by 1.3% of GDP, around £20billion.

They blamed the levels of debt on the pressure and cost of the post war baby boom generation, those born between 1946 and 1965 who will eventually be paid for by those working in future generations.

They also blamed the increased life expectancy, with people living longer and longer. In the UK today there are 3.6 people of working age for every retired person, but PwC predict this to fall to 2.4 people working per retired person.

Halifax have revealed that a mortgage offering first time buyers a loan with only a five per cent deposit, but with a huge interest rate was never supposed to make it onto the system.

The first time buyer mortgage, which charged 8% above the base rate, appeared on the intermediaries section of the banks website “by mistake” according to the company.

The mortgage also featured an early repayment charge which was the equivalent of a staggering 6% of the loan, and borrowers could borrow up to £7.5million.

Brokers were shocked at the offer that appeared on their system, as it would have made Halifax just the fifth lender to offer a mortgage with a 5% deposit. The other four mortgages offer interest rates ranging from 5.99% to 6.99% and are all fixed rate deals so the buyer is protected from interest rate increases in the next few years.

A mortgage expert from Obligo, Chris Gardner explained, “If this product had been genuine, it would have been the harakiri of home loans. Not only is the rate highly punitive but if rates rise then payments would become unmanageable almost instantly. This is the type of highly dangerous product, first-time buyers – or indeed any buyers – should steer clear of, given that rates can only go in one direction.”

David Hollingworth, a broker from London and Country revealed that he had been sceptical that the product was real as soon as he’d seen it. “There are very few 95% mortgages available, but this was not priced not to attract customers. It’s clearly designed to set alarm bells ringing if someone tries to process it as a genuine application.”

Halifax revealed that the loan was just a dummy product which was used for borrower’s applications when the original application they had made had seen a product drop from the market.

Halifax released a statement explaining, “There was an error this morning which resulted in three products incorrectly appearing on the Halifax Intermediaries website. These were products that are not live and were showing due to a systems error, which has now been corrected. The maximum LTV across the range, for new applications, is 90%.”

Prime Minister David Cameron will endorse the plans which will see savers rewarded for investing in schemes that will help teenage mums, children from workless families and young criminals improve the quality of their lives.

The increase in ISA limit will be designed to make the schemes more attractive to potential savers looking at the early intervention ISAs.

Child Trust Fund replacement, the Junior ISA could also feature in the plan, with young savers encouraged to invest their money in schemes that help people of a similar age to them.

Labour MP for Nottingham North, Graham Allen has written up the plans, which were commissioned by David Cameron who added, ‘We need to change the culture of Whitehall firefighting with billions  of pounds of public money and shift to a culture of early intervention.’

The report, which is titled, Early Intervention: Smart Investment,  Massive Savings , is also set to offer financial incentives to firms who are able to steer children away from a life of alcohol abuse and crime.

Private firms who are able to prevent children from falling into the wrong crowds and following the wrong paths will benefit from a system of payments for their work.

The scheme will be funded by wealthy investors who will be offered ‘early intervention bonds’ which are designed to pay for the plans, and it is hoped that they will be able to raise £200million this way.

Cameron added that it makes sense for ‘the economic, fiscal  and moral case for switching public spending with dealing with the causes of  social failure towards investing in programmes that prevent the failure in the  first place.’

A child with untreated behavioural problems can cost the taxpayer £70,000 on average by the time they are 28, ten times the cost of children without problems.

Children in a young offenders institution cost the taxpayer around £60,000 a year, and a secure children’s home costs £220,000.

Bank of England figures revealed that after paying off a record £71.billion in the last three months of 2010, Britain’s mortgage customers reduced their debt by a further £5.8billion during the first three months of 2011 showing an increasing determination to reduce their debts.

Housing equity figures from the Bank of England showed that home owners have now been reducing their average mortgage debt for three years in a row, a staggering £63.7billion invested in properties in that three year spell.

In the first three months of 2007 homeowners actually removed £13.4billion worth of equity from their homes with first time buyers finding it easy to get on the ladder and house prices constantly increasing.

Chief UK economist at IHS Global Insight, Howard Archer said, “The overall marked softening in house prices from their late 2007 peak levels has made housing equity withdrawal less attractive.”

Whilst homeowners are looking to reduce their mortgage debts by as much as possible, Moneyfacts, a price comparison magazine have revealed that there are more mortgage deals on the market than at any other time since November 2008.

First time buyers miss out though as the majority of these mortgage offers are being aimed at existing homeowners looking to remortgage, with 808 of the mortgages requiring a deposit of 25%.

Those with less than 10% of deposit available will struggle to find a mortgage with very few deals available although those savers who can put together a ten per cent deposit will be cheered by the news that the number of 10% mortgages increased from 176 to 261 in the last year.

Insolvency practitioner from HW Fishe, David Birne warned that the paying down of mortgages was bad news for the high street, adding, “The reduction of mortgage debt is always a good thing for the individual household but when it happens on such a scale and over such a time period it can have major ramifications for business, as less money makes it on to the high street.

“The paydown of debt is a double-edged sword. Consumers battening down the hatches and paying down their mortgages is one of the main reasons the high street is struggling as it is.”

Archer agreed, adding, “The ongoing appreciable net injection of housing equity is adding to the constraints on consumer spending, most notably including negative real wage growth, the increasing fiscal squeeze, high unemployment and elevated debt levels,” he said.

Pensions have become one of the most talked about subject in the media in the past few months with fewer people paying into private pensions, despite government plans to increase the numbers, and strikes over government plans to cut public sector pensions.

Research from actuarial consultancy, Aon Hewitt, has revealed that private sector pensions have been hit harder than many thought, with defined contribution or DC pensions taking the biggest hit.

DC pensions work in a different way to final salary or career average schemes as they give less security to workers over how much they will receive in retirement.

A direct contribution pension can depend on a range of different factors including current annuity rates, stock market performance and charges as well.

Aon Hewitt revealed that their defined contribution pension tracker had shown a large fall since 2008 and left those without a final salary or career average scheme well behind.

This view was backed by Tom McPhail from Hargreaves Lansdown who added,  “DC pensions are by their very nature unpredictable; investors can and will lose out as a result of unexpected movements in the prices of shares and bonds close to the point of retirement.”

Website moneyhighstreet added, “If you’re on a DC pension, there are several things you need to watch out for.

“Combined contribution rates for a private sector worker amount to approximately 9% of salary. By comparison, a final salary scheme contributes about 20% of salary. So at current levels, a private sector worker isn’t going to be able to build up a pension pot similar to a final salary scheme without contributing a lot more.

“Annuity rates are also volatile. They determine the pension income for DC pensions and are linked to the interest rate. In 2008, they reached 7.73%, but today are just 6.73% – lowering the payouts of DC pensions.

“Of most concern to people will be the connection of the value of their pensions to the stock market. Each pension is invested in a fund, and doing the research and finding the best-performing fund for your pension could help your investment.”

Fair Investment Company however feel differently and could have the answer to every young potential house buyers woes. They have conducted research that shows that saving £525 a month into a stocks and shares ISA from the age of 25 cold build up a savings pot of over £35,000 by the age of 30, more than enough money to get on the housing ladder.

What’s more, by investing their ISA allowance each year, the saver will avoid paying any tax on their savings or interest, as well as being able to save for their future without frittering money away on things that may not be necessary.

Latest statistics from the HMRC show that the average amount of money invested in a stocks and shares ISA each year if less than 60% of the entire allowance, although Fair Investments research still shows this is enough.

With the current ISA allowance a little over £10,680 a year, some one saving 60% of that would put aside £525 a month, which in a stocks and shares ISA for 5 years paying around 7% a year would leave them with nearly £37,000 by the end of those five years.

Oliver Roylance-Smith from the Fair Investment Company explained, “Saving the full ISA allowance each year is unrealistic for most people. This calculation shows that even if you can’t afford to invest the full amount each year, and don’t benefit from market leading returns every step of the way, you can still build up a healthy fund.
“If the ultimate goal is being able to own a home, saving over a five year period seems like a reasonable time frame.”

Government officials will be worried after the leader of the biggest public sector union warned it was a case of when, not if they went on strike, and warned that hospital and council staff could begin a “sustained” period of industrial action.

The move, which could put the medical system into chaos, will be decided over the next few months as Unison prepare to ballot their 1.2million members in one of the biggest ballots of all time.

Dave Prentis, general secretary of Unison described the potential fallout as an “autumn of discontent” and added that the move could bring council and NHS services to a standstill.

Unison represent over a million NHS and council staff and are angry about proposed changes that will bring public sector pensions in line with those company pensions commonly found in the private sector, leaving workers paying more to receive less.

Prentis was in no mood to beat around the bush, warning, ‘If we are prevented from reaching agreement we will move to a ballot in the summer or early autumn.

‘It will not be one day of action – it will be long-term action throughout our public services to prevent destruction of our pension schemes. It will be the biggest ever industrial action taken in this country.’

Describing the strikes as ‘massive industrial unrest’, he added, ‘It is very clear we are on a collision course unless the Government changes its policies.’

Mr Prentis warned the government that the strike action could begin as early as next month if suitable changes aren’t offered at a meeting on June 27^th.

750,000 teachers are set to go on strike for one day on June 27^th with ballot results expected later on today.

Unison themselves have already balloted 30,000 workers for a strike in protest at spending cuts by the government.

The Council of Mortgage lenders figures are widely regarded as the most accurate on the market and come a month behind Halifax and Nationwide figures because of the depth of their research.

Despite April showing the fourth monthly increase in a row, the figure was still 2% down on April last year, and the CML added that recent figures from the Bank of England suggested that mortgage lending was unlikely to increase much more in the next few months.

A survey carried out on a group of chartered surveyors also showed that people who were thinking about moving house, and first time buyers were being put off by continued mortgage rationing and economic uncertainty.

CML director general, Michael Coogan added, “The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011.”

“However, the economic outlook, coupled with Bank of England subdued approvals data for April, suggests a muted summer for mortgage completions so we do not expect further increases in lending over the coming months,” he added.

He did note that there was a slight reprieve on the financial burden put on first time buyers, explaining that in March and April last year the average deposit had been 21% but that was down to 20% in April this year.

A RICs survey found that 28% more estate agents had seen prices fall in the last three months than had seen prices increase, although the falls were around 2%.

RICs housing spokesperson Ian Perry added, “Buyer interest in purchasing property remains flat across much of the country and there is little sign of this changing any time soon.”

“Uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand.”

Andy Golding, chief executive of Saffron explained that he felt not letting parents do so would create an uneven playing field that would allow child trust fund investments to decline and the investments in the Junior ISA, which would still be open for business to increase.

Golding explained, “By allowing parents to transfer funds accumulated in CTFs into the new junior Isas, they are far more likely to benefit from what will be a competitive market, offering good investment options with attractive interest rates. If the money is left in the CTF, it could fall victim to declining returns.

“Parents who have saved into CTFs have made a commitment to save for their children’s future and it is only fair that they are able to generate the best possible returns.”

Saffron are not the first financial services body to appeal to the government for the change. Hargreaves Lansdown, investment house Fidelity and the Daily Mail have all joined the campaign to allow parents to move their Child Trust Funds into Junior ISAs when they are released in November.

Golding added “We support Junior Isas as a tax effective way of saving for a child’s future. When these accounts switch to regular adult Isas it will also start young adults off on the road to saving.”

Director for Cheltenham-based Bank House Investment Management, Tristan Freer, explained that he also supported the campaign, adding, “CTFs should definitely be allowed to transfer automatically into the junior Isa, particularly if the tax advantages are better. However, I don’t see that happening, unless it is advantageous to the government.”