Saving for (other people's) Children

[Shamoo]

Hello all - hoping for some advice.

I want to start saving some money for my new born niece (just £10 a month and then extra on birthdays and Christmas), so that at 18 I can give her a decent sum to start her adult life.

I don't feel that I can get a Junior ISA, as her parents will probably do that. Am aware I could get a fixed interest savings account, but that will require changing every year (to keep at a good rate) for 18 years. Also thought about premium bonds, although they would need to be registered with her parents.

Any ideas? What do other people do? All advice very gratefully received!

Kids regular saver - Halifax.

You need a secondary account where each year the money from the reg savers transfer in (with the interest) and you can also put Christmas and birthday money into this.

They are great. Junior Isa is ok but the child has the money at 16 and if that is thousands an adult has no control. That doesn't work for me

Great, thanks for the suggestion - I will check it out.

Any savings account or premium bonds won't keep up with inflation so you'll be losing money. Normally, I'd suggest a stocks and shares ISA in your name but at £10/month it could be a bit tricky. £10/month over 18 years adds up to £2160 and it'll be worth less given that inflation is higher then interest rates.

Would you, by any chance, be able to just set the 2k aside now and just put it into a stocks and shares ISA until you're ready to give it to her? That would generate the best return and would actually be worth a lot more in the future.

Op, can you not talk to her parents about a S&S ISA and tell them you'd like to contribute to one if they are setting one up? A junior one can have over 4k invested any tax year, so unless the parents are going to put the full amount in, then there is scope for you to add to it too.

I agree with JoJo, no normal account will keep up with inflation, plus regular savings accounts are crap - the headline interest rate is an annual rate, so only applicable to the first monthly payment, all other monthly payments wont be in the account for a full year so wont benefit from the headline rate.

As for access at 18 (for ISAs, not 16 as umi said), that is applicable to every single childs bank account. Some are younger than 18. If the ISA is in the childs name, the institution writes to them as they approach their 18th birthday. If online, then the adults online passwords become invalid on 18th birthday.

There is no account that can be hidden from the DC, unless the money stays in your name. Better to educate them in finance so they dont waste it at 18.