Some time back I prepared a blog on saving money for children based on grandparents helping out and then transferring as a tax free gift. This blog can be found here.
In this blog I am just going to look briefly at the funds that can be accumulated by investing the child benefit received by parents over 5, 10 and 15 years. The net return assumed is 5%. Child benefit entitlements are taken as those available at 1 January 2012.
A family with one child saving the full child benefit over the following periods can accumulate funds of:
5 years €9,560 
10 years €21,830
15 years €37,576
A family with 2 children saving full child benefit can accumulate the following:
5 years €19,121
10 years €43,660
15 years €75,152
A family with 3 children saving full child benefit can accumulate the following:
5 years €29,227
10 years €66,737
15 years €114,876
Even if parents can afford to save some of the child benefit it can make a difference. For example saving €100, with assumed 5% net return over the time periods 5, 10, 15, 20 years will accumulate the following:
5 years €6,828
10 years €15,592
15 years €26,840
20 years €41,274
For any help on making a decision on where best to save, contact us today at Donnellan & Co by emailing shane@donnellanandco.ie or phone at 087-1202405.