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!!!!
Halifax Kid's regular saver for one year at 6%
After one year stick it in a halifax children's ISA which gives 4% provided you have at least £5 in a Halifax ISA (it's what we do - my boy has more money than me!)
MarkC
The Halifax saver looks good but you can only put in £100 to open, then you are allowed to feed it for 12 months.
So
Open from between £10 - £100.
Pay in any amount from £10 to £100 each month by standing order
Kids' Regular Saver example - If you save £50 each month, you'll earn £18.97 gross (£15.18 net) interest after 12 months.
So with £100 per month you may get £37 after a year.
Craiginuk said he has £100 per month to invest, at present a saved portion just sits in with an isa but was hoping to earn a bit of interest on it for them.
So I assume he has a lump sum from the ISA to invest for them first.
With the lump sum in a 123 trust @ 2K they would earn around £55 per year every year not 6% compounded for the first year..
+ you can take it out when ever you want.
Last edited by Fords; 7th March 2015 at 09:21.
Are all kids able to access an ISA now (even those that had/have Child Trust Funds)?
Why not put it into an equity ISA - something like a tracker, or a combination of trackers - you have a long time horizon so you could well out of it ( or they could).
This is a better option IMO for the length of time you are saving for. If you choose a fund with a fairly good dividend stream this should give growth at a similar level to cash and also longer growth potential of the stock market. The fact you are drip feeding the cash in monthly should help to avoid some of the volatility of the markets. Also keeping it in your name means that the kids can't disinvest and waste the cash at the first opportunity, one of my clients saved for 16 years for their eldest and he spunked the lot in a week!Originally Posted by bambam
Keep a bit in cash closer to the time you need to access just in case the market has a little wobble so that you can leave the balance invested if required.
No specific suggestions, except to say that - if it were me - I'd be looking at a worldwide, heavily equity biased (possibly 80/20), probably a physical ETF, bought through JISA if possible (my kids are all older, so I don't know the rules.). Might also consider something that held equities (60%+) and bonds plus alternatives, like commercial property, too. The wider the base of assets and geographies the better I'd say, so long as total costs are low - that's absolutely key over a ten year time horizon, I reckon.
But one thing I would do is buy the ACC class rather than INC if available, because that way the income that the fund generates gets rolled back in cost effectively. And I would want something that generates a yield of 2.5%+ pa, ideally a bit more, because that makes a big difference to performance over time.
I'm not qualified to give any advice whatsoever, but FWIW that's what I'd do, if I were 30-odd again and my kids were sub-10.
Not 100%, but have a feeling that those children who received CTF's couldn't invest in an ISA?
I think that you'll soon be able to transfer CTF accounts into JISAs. But the main thing is that both of these methods give the control to the child when they turn 18 and that can be a bit risky! Something in your/your wife's name is a better bet as you keep control. If they don't behave liquidate the investment and buy yourselves a sports car! At least you'll have the option.
You may be right about the control piece.
It's a safety valve - if all goes well, they have some funds to get them started, help with a deposit, car etc. If not, you have an unexpected bonus in your name. Everyone wins.
What about putting that £200 each month into your mortgage? With the aim of being mortgage free much earlier and then being able to pass them money each month that would have gone into the (non-existent because you paid it off early) mortgage.
Saving for children is a strange one, psychologically people feel better if they have something set aside separate for the kids.
I personally think the best way is to consider the family finances as one combined thing until they have left the nest. Your money should always be in the best place regardless of the account type.
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.
It's also worth considering when they get access to it.
An irresponsible 18 year old can blow a good few grand in no time on clothes and booze in my case.
And watches :)
Yes, This is the reason I am not using a child specific product (Ie savings account with 3% zero tax interest) I know at 18 mine would have been spent on cars! It's more me saving for their studies etc.
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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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.
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...
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).
hahah
This.
We spend 18 years building up a fund for them to spend on education and on their 18th birthday they come home with a new Rolex .
Would we consider that a plus ??
Nationwide have a smart junior ISA paying 3% which is pretty good. I do that every year as a lump sum and then monthly payments into the stock market.
I started SIPPs for both of my kids when they were born. I used to pay the childs allowance into it but when that ended I continued to pay the same amount in every month. My daughter is now 15 & I've paid £84 per month into her SIPP since she was born. I've just looked at her account & she's got £35,123.40 in her SIPP
I also opened her a junior stocks & shares isa 4.5 years ago & that is standing at close to a 32% increase. I wouldn't consider a cash isa for such a long-term investment. The interest rates are derisory
Last edited by trident-7; 12th September 2017 at 16:44.
I have my daughter's savings in a fund based Junior ISA with OneFamily. The value of the units has increased by 50% over 5 years so I'm glad I didn't put it into cash with interest rates less than inflation! Also it has online account management and friends & relatives can also pay into it.
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.
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.
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.
This is what I’d do. Given the long term nature of your investment it would be a poor decision to keep the capital in cash.
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.
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.
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