£3K for a new baby - best plan for it?

[user1471602322]

Hi all, I am due 1st baby next week.

My mum very kindly gave us some money - £3K - and I would like to put it into long term savings for the child, rather than just spending it on house and baby items. I guess we might be given occasional bits of money on birthdays and Christmasses from relatives, and will prob plan to save a certain amount / month so would like to be able to top it up regularly.

Have looked at Martin Lewis, seems the options are one of these childrens savings accounts, around 4%, but only for a year and putting in a small amount each month rather than the whole lump; or the junior ISA option. I am less keen on the ISA option as they have full access at age 18.
www.moneysavingexpert.com/savings/child-savings-tax-free
www.moneysavingexpert.com/savings/junior-isa

Just wondered if there are any other products or options I am missing and should know about, and anyone's thoughts or advice on what you'd do with this amount. Am I best off looking at children's products rather than just saving it in my own name?

Thanks for any advice.

You could start a pension but that will be locked for 55 years - although it could grow well!

There are no adult savings paying above inflation, which is really over 2% now. Possibly a stock market isa ?

Long term savings in cash is basically a waste of time. Spend it while it buys you£3k of stuff!

... or a stocks and shares Jisa.

Thanks both! Good food for thought.

I think they have access to any account that is in their name at 18 - savings or ISAs....?

Well, if you don't want your child to have access to it at 18 then put it into an ISA in your own name. And make sure you don't spend it in the meantime.... Or think again about putting it into a Junior ISA. When they get to 16, you can start discussing what they could spend then money, e.g. uni, gap year, leave it for a deposit etc. That way they should have a plan and be less likely to randomly blow it as soon as hey turn 18.

Yes I've got premium bonds from when I was a kid. £2 to be exact. A great example of how inflation damages cash savings.

If you don't want them to have access, put it in your name.

Yes, I would advise bonds or savings. A reasonable fund instead.

premium bond rate and odds about to be cut again. Inflation already over 2%.

I mean wouldn't advise bonds or savings obv