Saving / investment accounts for kids

[MikeJSmith]

I'm looking to start saving a regular amount for our 2 kids, 3yr old and 9yr old. We currently just put some money into a web saver halifax account, which was easy to do as we bank with Halifax.

I'm thinking of setting them up with junior ISAs and putting in a regular 100/month payment for them each.

Is there anything else I should be looking at instead? I saw some normal saving accounts with decent returns, but the idea of having to swap and move money around regularly doesn't appeal.

Thanks! Mike

[Captaincook]

I have junior ISA’s for my kids and am pretty happy with these.

What about starting a pensions for their kids.

[MikeJSmith]

I have junior ISA’s for my kids and am pretty happy with these.

What about starting a pensions for their kids.

I've not heard of pensions for kids before, feels a bit odd doing something for when they are 55! I'll be 94 when my youngest gets there. Will check them out though, I guess it has the bonus of there being more chance of them doing something sensible with it at 55 than 18, but then again maybe not ...

[trident-7]

I've not heard of pensions for kids before, feels a bit odd doing something for when they are 55! I'll be 94 when my youngest gets there. Will check them out though, I guess it has the bonus of there being more chance of them doing something sensible with it at 55 than 18, but then again maybe not ...

It’s already 57 for them…& likely to have the goalposts moved again multiple times.

That said I’ve paid £84 per month into both of my kids’ SIPPs since they were born. My daughter is 21 next month & her SIPP currently contains about £60k.

I chose £84 per month because that’s what I was receiving in family allowance at the time she was born. The government adds 20% which neatly makes the monthly contribution £100.

Not that my daughter appreciates it. She’s said that she’d rather have that money now, despite my also paying £100 a month into her funds & shares ISA. 57+ must seem a lifetime away to a 20 year old. So next month will be my final payment into her SIPP….I’ll have paid into it until she’s reached 21.

Then I expect I’ll start paying even more into her ISA.

[badger1]

She’ll appreciate at retirement age, assuming it grows at 7% it’ll double every 10years!!

[MikeJSmith]

She’ll appreciate at retirement age, assuming it grows at 7% it’ll double every 10years!!

Yes, I guess that’s the benefit of the pensions; 50 years to accumulate should hopefully be a nice outcome.


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[MikeJSmith]

It’s already 57 for them…& likely to have the goalposts moved again multiple times.

That said I’ve paid £84 per month into both of my kids’ SIPPs since they were born. My daughter is 21 next month & her SIPP currently contains about £60k.

I chose £84 per month because that’s what I was receiving in family allowance at the time she was born. The government adds 20% which neatly makes the monthly contribution £100.

Not that my daughter appreciates it. She’s said that she’d rather have that money now, despite my also paying £100 a month into her funds & shares ISA. 57+ must seem a lifetime away to a 20 year old. So next month will be my final payment into her SIPP….I’ll have paid into it until she’s reached 21.

Then I expect I’ll start paying even more into her ISA.

Sounds like you’ve done a lot to set her up for the future, I’m sure she’ll appreciate it. Sounds like it would be good to have a middle ground - something that matures when they are 30, that way they are old enough to use it sensibly but it won’t feel like a lifetime away or maybe I’m overthinking it all and just doing something would be good


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[luckyal]

I'm looking to start saving a regular amount for our 2 kids, 3yr old and 9yr old. We currently just put some money into a web saver halifax account, which was easy to do as we bank with Halifax.

I'm thinking of setting them up with junior ISAs and putting in a regular 100/month payment for them each.

Is there anything else I should be looking at instead? I saw some normal saving accounts with decent returns, but the idea of having to swap and move money around regularly doesn't appeal.

Thanks! Mike

I'm not an investment professional so DYOR but i wouldn't put them in cash ISAs (as it sounds like you might) as you have a long time to invest so picking a S&S ISA and choosing some funds is likely to yield a much better return over 15/9 years?
I did the same as others & put the old family allowance figure into funds, switching to similar figures when it stopped for me & that's paid off over a long time horizon.

[MikeJSmith]

I'm not an investment professional so DYOR but i wouldn't put them in cash ISAs (as it sounds like you might) as you have a long time to invest so picking a S&S ISA and choosing some funds is likely to yield a much better return over 15/9 years?
I did the same as others & put the old family allowance figure into funds, switching to similar figures when it stopped for me & that's paid off over a long time horizon.

Ah yes thank you, I was planning to do stocks and shares as you suggest


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[Boss13]

Don’t have much to add except that it’s a great idea to do something like this. I really need to look into it too so shall consider some of the recommendations here.

[MikeJSmith]

Don’t have much to add except that it’s a great idea to do something like this. I really need to look into it too so shall consider some of the recommendations here.

Yeah I’ve been meaning to do it for ages and then all of a sudden my oldest is going to be 10 this year and now it feels late!


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[Yeti]

I save £1k per year for both of my children into premium bonds so that at 21 they have a small nest egg and the chance to win some money over the years. I haven’t explored anything else but maybe I should as it may be beneficial to have something accruing interesting. I’ve got £12k for the eldest and £6k for my youngest so far. Any suggestions guys?

[thegreatdogwood]

Well worth doing something. The junior pension route delivers the best outcome in theory, but in practice channelling the focus into finances for their property purchase and even paying off any mortgage as quickly as possible may well generate a better outcome for them, depending upon area they end up living in and value growth.

[MikeJSmith]

Thanks all. I think a stocks and shares junior ISA sounds like the best option; can set them up for £100 a month and then there’s some leeway to increase or add extra lump sums in the future too.


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[NickRed71]

It’s already 57 for them…& likely to have the goalposts moved again multiple times.

That said I’ve paid £84 per month into both of my kids’ SIPPs since they were born. My daughter is 21 next month & her SIPP currently contains about £60k.

I chose £84 per month because that’s what I was receiving in family allowance at the time she was born. The government adds 20% which neatly makes the monthly contribution £100.

Not that my daughter appreciates it. She’s said that she’d rather have that money now, despite my also paying £100 a month into her funds & shares ISA. 57+ must seem a lifetime away to a 20 year old. So next month will be my final payment into her SIPP….I’ll have paid into it until she’s reached 21.

Then I expect I’ll start paying even more into her ISA.

Your daughter sounds like my younger son. I opened child trust funds for him and his older brother when they were born; IIRC Gordon Brown kicked in £500 for one or both, to incentivise saving, and I have put in £100 a month since then. Along the way, they converted into junior ISAs.

The older one will go to college later this year and will use the ISA to pay living expenses. The younger one is only vaguely aware that the ISA exists but when he turns 18 it will be his. I will have no control over the money. My idea is that he uses it to pay for college. I suspect his ideas will revolve around motorbikes, guitars, girls and travel.


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[Middo]

Thank for posting this OP, it’s give me a nudge to sort one out for my lad.

[Boss13]

Thanks all. I think a stocks and shares junior ISA sounds like the best option; can set them up for £100 a month and then there’s some leeway to increase or add extra lump sums in the future too.


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Think I will do this too.

Next step, which organisation to do it through!?

Wonder if someone like Vanguard do a junior ISA. Will look into it.

[MikeJSmith]

Think I will do this too.

Next step, which organisation to do it through!?

Wonder if someone like Vanguard do a junior ISA. Will look into it.

Yes they do, that’s where I was thinking of setting them up as I have an account with them already.


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[Stringer]

That said I’ve paid £84 per month into both of my kids’ SIPPs since they were born. My daughter is 21 next month & her SIPP currently contains about £60k.

Good idea.

With a SIPP it’s not just the tax incentive, long-term compounding, uncertainty of future state pension eligibility and its ever-increasing age requirement.

The way I look at it is that savings will help with Uni, car, house deposit etc. when kids are young, and the inheritance I leave will help them in middle-age (and earlier) when I shuffle off my mortal coil, but a pension is a way of ensuring they’re looked after 50-60 years from now, when I’m long, long dead. And in a ring-fenced fund that they can’t access early and potentially squander.

There’s a valid argument that they might need or appreciate the financial help earlier. However, having a pension pot already established can help them in younger years e.g. allowing them to reduce or delay their own pension contributions when wages are already low in their early career.

With a daughter, it’s arguably even more important, due to maternity leave, career breaks, interruption to progress etc. that may unfortunately create a ‘pension gap’.

As a smaller part of a wider investment strategy a SIPP for kids can make sense (if they’re fortunate enough to be in that position).

[MikeJSmith]

Good idea.

With a SIPP it’s not just the tax incentive, long-term compounding, uncertainty of future state pension eligibility and its ever-increasing age requirement.

The way I look at it is that savings will help with Uni, car, house deposit etc. when kids are young, and the inheritance I leave will help them in middle-age (and earlier) when I shuffle off my mortal coil, but a pension is a way of ensuring they’re looked after 50-60 years from now, when I’m long, long dead. And in a ring-fenced fund that they can’t access early and potentially squander.

There’s a valid argument that they might need or appreciate the financial help earlier. However, having a pension pot already established can help them in younger years e.g. allowing them to reduce or delay their own pension contributions when wages are already low in their early career.

With a daughter, it’s arguably even more important, due to maternity leave, career breaks, interruption to progress etc. that may unfortunately create a ‘pension gap’.

As a smaller part of a wider investment strategy a SIPP for kids can make sense (if they’re fortunate enough to be in that position).

Some good thinking there and sounds like it’s paid off well for you (or for your daughter at least ). That certainly does have the potential to be a significant sum come retirement; well done


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[stooo]

Don’t discount premium bonds. There is great excitement each month as to who won the most now they are old enough to understand.

[ernestrome]

For those who are going the stocks and shares ISA route, what funds do you like?

I've put the kids' money into vanguard life lstrategy 100% equity and would like to add another few funds to complement this. Probably low fee tracker funds.

[ALindsay]

No recommendation, but, I’ve put money into 3 L&G Indexes (UK, Europe and Global) for my grandkids. Spreads risk and seem to be performing satisfactorily with all that’s happened in the world over the last few years


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[MikeJSmith]

I’ve set up ISA’s for them both now, feel quite relieved to have got something in place for them!

I’ll probably look to top my oldest son’s one up a bit to try and make up for the lost time, otherwise he’ll feel hard done by


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[Captaincook]

Good stuff. It’s always difficult keeping the balance but at least you are doing something about it.

Next step it to buy a couple of birth year watches for you to enjoy before you hand them down :)

[Passenger]

For those who are going the stocks and shares ISA route, what funds do you like?

I've put the kids' money into vanguard life lstrategy 100% equity and would like to add another few funds to complement this. Probably low fee tracker funds.

I reckon you're onto a good thing with low fee trackers, at the end of the day it's about length of time in the market and avoiding tax legally... and you're ticking both boxes.