Hi all,
some advice please - I put £100 each aside for my 2 boys every month. I know it won't cover uni but it's a start and just want to give them a bit of a headstart if I can. Anyone know of a decent account for keeping this in? At present it just sits in with an isa of mine but was hoping to earn a bit of interest on it for them. I've seen some of the child accounts offering 3% but weary of it being in their name for now (they are 8 and 5)
Anyone do something similar?
Caig
The Santander 123 mini trust account we have one for our boy 3% up to £2000 as soon as you get over that, you can stick the excess in an mini ISA.
We had one for our daughter as well, that one migrated to a 123 mini when she reached 12, with that came a debit card etc
You can withdraw without penalty's any time.
http://www.santander.co.uk/uk/curren...-mini-accounts
A few on here don't like Santander they will be along shortly.
It's easy and fast to set up.
I did the same a fair number of years ago but drip fed the cash into a couple of capital growth Investment Trusts. Good exposure to the stock mark, less specific than unit Trusts, and I went for a couple of tried and tested Edinburgh managed trusts (Monks and Scottish Eastern) which have been steady over the years. Surprising how a couple of hundred a month over 18 years will add up.
regards
grant
you can put it monthly into a child's Halifax account and get 6% or( is it 8% I cant remember ) and then it goes into another Halifax childrens account after a year and you get 3%
We've got a Nationwide Smart Limited Access account that pays 3% interest for Mini MST that her Child Benefit is automatically paid into monthly, she's nearly 28 months and we've worked out that if the rate stays the same (doubtful) she'll have circa 20k by the time she's 18, we also pay in any monetary gifts she receives for her birthdays etc.
Needless to say that at the moment she's got considerably more funds in her account than I have in mine!
Start their pensions. Do it. Do it now. And Max out premium bonds.
I have a stocks and shares Isa but in my name so that I have control until I can trust them. I don't want them to have access when they are 18, just to waste it.
My other isa is in wife's name for our savings.
I preferred this as it gave me control. I know what I did to money when I was 18!!!!
I've just started a Junior SIPP for my 8 month daughter, mainly to benefit from the 20% tax relief - free money, seems like a no brainer...Originally Posted by Tomw2000
I also contribute to a Stocks and Shares ISA that is invested in the Vanguard Life Strategy 80 accumulator fund. 80% equities 20% bonds (Government and IG Corporate).
Thanks for all the suggestions. Yes I would like to be in control of it which is why I am not topping up their child trust funds. I like the idea of the 6% tax free for the £100 each per month. And yes I do have a small lump sum - about £3400 each which I could possibly put in a junior saver for now. Then move into my wife's Isa once they hit 16.
We do pay extra into mortgage too but I know if I pay it all into mortgage it will get spent on a bigger house at some point so want to just have 20 k to give each of them when they need it and when we feel they are responsible enough.
Sounds like a good plan. Your point re paying off the mortgage and then possibly buying a bigger house, so they still dont have a nest egg, makes sense. Therefore keeping the funds separately makes rationale sense.
Can anyone elaborate on offering guidance on pensions for children please? Also, any new childrens savings accounts anyone can advise on?
Many thanks
I put a set amount a month into an Investment Fund using Hargreaves Lansdowne for my twin girls. The fund only invests in big blue chip companies therefore (hopefully) avoids high fluctuations.
Thank you.
I did the same for my kids.
Daughter burnt through hers at University even though she lived at home.
Son didn't go to University and still has a few grand towards a deposit some time.
Both seem to have a reasonable attitude to money and are saving themselves now.
M
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Breitling Cosmonaute 809 - What's not to like?
I'm currently investigating opening a savings fund for my two boys and wondered whether there was any other options that I should consider in addition to those discussed a couple of years back on this thread? Thanks in advance.
I went for a stocks and shares isa in the end. Has done quite well.
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There was a pensions info show on R4 yesterday and they said that if you start a kids pension when they are born then due to compound interest, they will accrue more in those first 18 years than you would from age 18 - retirement.
Cheers..
Jase
Although with a pension it won't pay out until 55 under current rules (barring a couple of odd scenarios), if your aim is their long term future, this has to be a consideration.
We put money into NS&I children's bonds each month. I read an article by Martin Lewis on the Money Saving Expert site and it looked like a good option.
NS&I. The NS&I Children's Bond (issue 35) is 2% AER fixed for five years on balances from £25 to £3,000. This is a lower rate than some fixes, but it has a unique advantage – it's the only product outside a junior ISA or Child Trust Fund where the interest is always tax-free.
7 year resurrection on this one... I've recently become a dad (which has been a positive experience so far, on balance) and been given some money to "stick in an ISA for the lad", and I'd much rather a stocks & shares over cash but my eyes glaze over when I scan the long old list of funds and trackers.
So my question is, what fund/tracker would you recommend? It's not much money (more King Seiko than Grand...) and he's very very little so risk appetite is high.
Reading this thread from years gone by, I appreciate the suggestion of keep it in your name rather than theirs for any savings we put aside for him (as opposed to gifts like this).
While looking at S&S JISA's, not sure if it's a recent thing or not but noticed Hargreaves Lansdown don't charge any fees for kids accounts which seems great.
Something like the Vanguard FTSE Global all cap index fund might be a good start.
It’s well diversified with about 61% in usa, 6% japan, UK 3.5%… etc
A very much “invest and forget “ kind of fund, annual fund fee is 0.23 % plus the platform fee of course.
Lots would recommend an S&P tracker but thats 100% USA so not as diversified.
I've also been looking into this recently. We've not decided what to do yet but we have decided keeping control is key - too many horror stories! That rules out JISA and junior savings accounts for us. It's a shame there isn't products that safeguard the money in the child's name a bit longer (e.g. 25).
Premium bonds are a fun option but doesn't feel like a real 'long term' winner. It's actually an odd loophole that you can set up an account in your child's name, put up to £50k in it essentially doubling your limit, and take it back into your own account at any time (prizes also paid to you). Not really relevant for the goal of saving for the child, but I'm suspect it's a loophole many use for tax efficiency.
I do like the pension idea - small amounts now could be really significant in sixty years and possibly a nice safety net. Talk about delayed gratification though... we'd probably not be hear to see her receive it and who knows what the rules will look like by then.
Saving in our own name in a separate S&S ISA is probably the best option for us (not that I know much about S&S ISAs), although of course only a good option if you can be disciplined about it.
James Shack is always well recommended and he's done a recent video on this topic that's very useful, well worth the time to watch this one. One key takeaway was the emphasis on how building your own wealth supports your child, and how choices may look quite different for a parent vs broader friends/family.
What did you end up opting for?
It was difficult enough trying to get a bank account for a baby so I’ve stuck it in premium bonds for now.
I don’t like the inflexibility of a JISA as if the amount in it grows we may want to temporarily borrow from it which isn’t possible.
Always keep 1 BTL for their future.
Re premium bonds someone plenty of people have put in £10-100 and won £50k, £100k.
I don’t see PB as a genuine investment strategy but £1k you’ll forget about for 30 years as a punt for a child has got to turn something up one month.
That’s the issue though- it hasn’t got to turn up something one month.
I know a few people with the max and only one in the last 20 odd years has won a larger amount (£25k)
They are also going to want to buy a house sometime.
I’d consider a stocks and shares LISA, 25% added by HMgov.
My youngest has one and should be buying a house in next few years. Also had a pension since 16 which I put a bit into.
No they haven’t unless you have a strange definition of plenty.
Premium bonds are a very poor thing to do with capital long term.
Sure if you have cash you may want in the short term and want to gamble your interest but not long term.
This forum seems to have a strange obsession with Premium bonds.
See this James Shack explanation.
https://youtu.be/q1EcrlFiwP4?si=foB725DX2u6OzXhQ
Last edited by Montello; 22nd March 2024 at 09:39.
2 maximum amounts here currently for 2 months, zero wins and bored already. Roll on the next tax year.
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Junior ISA’s for my boys, with funds mostly invested in American S&P500 seems to be best mix of risk/reward.
I got them both interested in small investments (<£100 total) in bitcoin this time last year and the ride up has been enjoyable. Important however that they experience the downturn when it comes too!
Thanks for all the comments, and the fund suggestions - "invest and forget" is 100% the likely strategy whether intended or not.
I'd not come across James' youtube channel before, but enjoyed both of the videos, and though I hadn't thought about it before I completely agree with it not making sense as a parent to lock your own money away. Was starting to feel reading the comments about control etc that maybe it wasn't a good idea and James enunciated that really well.
I do find it quite interesting - everything has its trade offs!
I did a stocks and shares isa for ours.
100% in a world tracker fund. A large % of that comes from the s&p500 at the moment but will it be the powerhouse in 20 years?
That’s the nice thing about a world tracker it covers all bases.
I have invested for my nephews and nieces in my isa in an MSCI world tracker. So far it’s done great because of the magnificent 7 but I suspect it will slow a bit but in 10 years or so from now should be a reasonable chunk.
Does the UK have anything like Canada's GIC's (Guaranteed Investment Certificates). They don't go down in value, so no worries about loss.
In Canada. Month to month some banks are paying out 4.5 - 5% interest
$500 minimum
I'd say closest thing the u.k has is premium bonds.
Tax free winnings on a draw done monthly can cash out at anytime for face value of bond.
Only inflation eroding the bonds value.
I have a S&S JISA for each of my boys through Hargreaves Lansdown. They're young still so the JISAs should mature well by the time they all hit 18, I'm hoping I can convince them to convert them into SIPPs once they have access to the funds.
Situation is different for my youngest as he has Down Syndrome, so I'll probably be looking at setting something aside in trust for him
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