Savings for kids – STW IFA’s advice needed!

I have three kids and, like a good dad, I set up Child Trust Funds for them when they were born. Except I kind of forgot to do so for my third. The two that were set up were changed into ISA’s and my 18 year old has access to hers now, my 16 year old will follow and my 14 year old has nothing.

I need to get a hustle on and start saving money so when he is 18 he has the same fund available. So I’m looking to save about £200 per month plus additional top ups, a max of £3k per year. Account could be in his name or mine, really don’t mind. I don’t need instant access and fixed interest would be great, on assumption that rates will fall. What I can’t work out is whether I should go with Child savings accounts, Child ISA or something else. Any advice really appreciated.

Final question, given that interest rates are all pretty low, should I just go with Premium Bonds instead knowing I might not make anything but always got the chance of winning more than interest?

Thanks

You’ll likely need to set it up in a childs trust, so its protected from any tax liability.

Unsure on the rates of those specific products, but generally of you shop around you can get ~4% for instant access and ~5% fixed rate/term products at the moment.

Premium Bonds are really poor value for 99% of people.

Final question, given that interest rates are all pretty low

Rates are around the highest they’ve been for the past twelve years (give or take…). Enough to tempt me away from Premium Bonds towards a guaranteed return for my emergency access cash anyway. That said, I’m unsure about children’s specific products too.

You’ll likely need to set it up in a childs trust, so its protected from any tax liability.

Wouldn’t a Junior ISA also have the same effect? That would be my instinct in any case.

My son just opened a Junior ISA account with Wealthify for his son (newborn so not an exact comparison) mainly so that we as proud grandparents can pay into it on a regular basis.

Very well reviewed – might be worth a look. https://www.wealthify.com

It is backed by Aviva so has some weight behind it.

Are you sure your 14 year old doesn’t have a CTF? A quick google suggests they stopped on 2nd Jan 2011. Or did you actually have to do something, I can’t quite remember with my kids.

Unless you have maxed your own ISA allowance why not just save it in your own name and give them the money when they hit 18.

Stocks and shares Junior ISA is what I have for my kids. Vanguard ones invested in their LifeStrategy 80 fund which is 80% global equities and 20% bonds. Very happy with the returns so far, well in excess of any cash savings accounts or cash ISAs.

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa

You can (currently) put £9000 a year into a Junior ISA tax free.

robolaFull Member
Are you sure your 14 year old doesn’t have a CTF? A quick google suggests they stopped on 2nd Jan 2011. Or did you actually have to do something, I can’t quite remember with my kids.

Good point, I think they might have automatically set on up with an initial deposit but I have certainly not been topping it up. I’ll track it down if I can.

Stocks and shares Junior ISA is what I have for my kids. Vanguard ones invested in their LifeStrategy 80 fund which is 80% global equities and 20% bonds.

For what it’s worth this is exactly what I’ve done for my two.

Unless you have maxed your own ISA allowance why not just save it in your own name and give them the money when they hit 18.

Circumstances change.

If it’s in your name.. it’s your asset for liability purposes.

Think. You get laid off from work/end up on long term sick and head off to the job centre.

Think. You get laid off from work/end up on long term sick and head off to the job centre.

It is a fair point, but many would consider the risk of that happening in a 4 year period to be small.

There is a downside to putting money in trust too, if I had received a lump sum at 18 I would have wasted it.

Stocks and shares Junior ISA i

This is the correct answer. Savings account is a shit idea, as is sticking it in your own ISA.

Got my kids a bit of Rolls Royce during COVID and it’s currently worth almost 5 times what I paid for it

But a fund would be the best option. Vanguard seems fave around here.

Sorry. Phrased that abominably. What I meant to say is that if the child is still a way off 18 then my preference would be towards a shares ISA rather than cash.ISA.

And Defo in the kid’s name.