More than a third of investors are investing on behalf of their child’s or grandchild’s future, according to a new survey by F&C Investments.

The findings from F&C show that 36 per cent of respondents are investing for their children’s future, while a further seven per cent are investing on behalf of their grandchildren.

Explaining the reasoning behind investing on behalf of their children and grandchildren some investors said it was “better than buying toys” while other investors are keen to provide a university fund for their loved ones.

One investor, whose daughter is seven, hopes to raise a minimum of £30,000 by the time she turns 18 to “give her a start in life, whichever direction she chooses”.

A popular way for investors to make a contribution to their child’s or grandchild’s future is through a Child Trust Fund (CTF) or a Children’s Investment Plan, specifically designed to suit children who are not eligible for a CTF.

Explaining the benefits of investing early in a child’s future, Mike Woodward, head of investment trusts at F&C Investments, said: “Investing for children can also allow parents and grandparents a longer investment horizon, meaning more time to ride out the ups and downs of equity markets.”

Although many people are investing on behalf of their children or grandchildren, 57 per cent of people said they were still investing for themselves, and Mr Woodward believes people “also recognise the benefits of investing for their own future.”

He added: “With the forthcoming increase in the ISA allowance (introduced for the over 50s from next week and for all from 6 April 2010) we will be encouraging them to make the most of the opportunity to shelter their assets from an increasingly avaricious taxman.”

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© Fair Investment Company Ltd