Parents need to swot up on their children’s financial future, according to the Children’s ISA.

Parents need to learn more about the new financial options for their children or they could end up bottom of the class, according to the Children’s ISA which this week has announced it has teamed up with the Prudential and Total Clarity Fund Managers.

Financial experts The Children’s ISA Ltd, is set to launch one of the UK’s first Junior ISA investment schemes available from November 1, but warns that parents need to do their homework now or they could end up jeopardising the chances of their offspring ever owning their own home or going into further education.

Despite the Government creating new tax savings accounts for children, research suggests that many consumers are already confused about the benefits of existing adult ISAs.

And the warning is clear, “the lack of education among adults on existing financial products in the market could impinge on their children’s accounts when new junior schemes are introduced in November,” says David Dawson, Savings Director from the Children’s ISA.

“Consumers must get to grips with ISAs and lead by example if they are serious about saving for their child’s future.”

Latest reports reveal that 95% of British adults don’t know what their our own ISA allowance is for this tax year, while 26% didn’t know that there was a limit to how much they can invest and 65% will not use their ISA allowances*.

This, coupled with other research which predicts going to university could cost more than £70K in 18 years time and that many of our children will not own their own homes, means saving for a child’s future has never been as important or as confusing.

“Parents ignorance of the financial options available to them and the rising costs of education and home ownership all adds up to a very uncertain future for coming generations,” added David.

The Children’s ISA is preparing to launch a simple and flexible Junior ISA with the backing of some of the largest asset managers in the UK including TCF Investments’ low cost diversified portfolios and Prudential’s actively managed dynamic portfolios.

The company has started to develop their website www.thechildrensisa.com and will be launching a portfolio of investment products to help parents, family and friends invest in their children’s future and get tax free savings.

Set to launch in November, it is the first time that ISAs are available for those under the age of 18 and allows investments of up to £3,000 a year tax-free.

“With the rising costs of living expenses and escalating education fees, it makes sense to work out a budget and start saving early,” said David.

“We intend to be one of the first to market and believe the model we are putting together will be unrivalled, but education is key to making these schemes work.

“Parents can pay in up to £3000 per tax year and calculations show that a parent who saves the full allowance each year could achieve a pot of almost £108,000 by the time the child is 16 (based on growth of 5% per annum).

“By saving £132.50 per month, it is possible to achieve a pot of just over £46,000, based on 5% growth per annum, enough to cover their living costs for three years. If they are able boost those monthly savings to £209.50, they could then achieve a savings pot of £73,462 to cover living expenses and tuition fees if they go to university.”

To help those who are uncertain of benefits of such accounts, the company is already offering information via its site www.thechildrensisa.com as it prepares to launch a range of products including low cost, actively managed, ethical and sharia models.

Backed by Avalon Investment Services, The Children’s ISA also offers a wide portfolio of financial products and expert advice to help families as well as individuals