Saving for University/College/House Deposit

(3 Posts)
Octopus37 Sat 23-Nov-13 08:22:54

We have two boys, aged 3 and 6 and currently have Child Trust Funds in place and also a savings account for each of them, probably about £3-4,000 in total. Has just dawned on me that I should really be saving a considerable amount to mature when they are 18. I have got an ISA in my name which has about 2,800 in it, so was thinking about adding to that every year, but the rate isn't very good. Was thinking about a Stocks and Shares ISA, but obviously worried about losing capital or about some other sort of investment. Any advice would be welcome.

Talkinpeace Sat 23-Nov-13 15:37:45

You can move your cash ISA money every year into a good earning one and add that year's allowance to it.
I'm currently getting 2.2% on all of mine and DHs money from the last 6 years

remember that university loans are (currently) not paid up front

Stocks and shares ISAs can give a higher return but yes do have some risks attached - although tracker funds tend to be less risky. I am using a Junior ISA for DD which I only invest in funds. I take the twenty year view that dips will be smoothed out over the long-term. You obviously do need to monitor it though, like any investment.

Cash ISAs I think are at risk from capital depreciation though while inflation remains so high and interest rates so low, for example assuming inflation stays at its current rate of 2.5% and you earn an interest rate of 2.2% then at the end of the year your money will actually be worth less (in terms of buying power) than when you put it in.

By the way the rules on CTFs are due to change very soon and you will be able to transfer these into junior ISAs - more choice of providers and investments and lower management charges.

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