Savings accounts for my children

[clairebear610]

I would love to set up for savings/investment accounts for my young children to pay what little I can afford into each month and for them to be able to access at 18 or perhaps 21 hopefully having accrued good interest or matured. I don't know where to start though and am not financially savvy. What would anyone recommend please? Thanks

Anyone? Thanks

One last bump. Thanks :-)

Hello! I am no expert but I think a Junior ISS can be set up in their names. Or , and I know its not what you are looking for, but if you start them a pension as early as possible it should do pretty well by the time they retire.

I have my kids uni money (well some) in Premium Bonds, but isn’t guaranteed decent returns, more of a lottery.

ISA not Iss

I used to look at fixed rate bonds for mine with banks and building societies, the move them to a better interest rate when they matured. This was in the days before junior ISAs.

Mine each have a junior ISA . The money is locked in until they are 18 and then they get control of it. They also have premium bond accounts.

Last year Halifax kids saver had a very decent interest rate.

I want to save for my kids but slightly wary of anything that they can access at 18, just because I was a nightmare at that age and would have totally wasted that money.

You have a few options that all have pros and cons.

To retain control you should save in your name.

Why would you need control? There are hundreds of posts on MN about teens wasting ££££ that they received (savings/inheritance/windfall etc). How should you save for 10+years? I would suggest a S&S ISA.

You could then withdraw the appropriate £ when the time comes.

Saving in the child's name?

Traditional bank/building society = safest but currently very low interest rates. With the way the economy is going with world events then rates may well rise but inflation could also spiral.

Child S&S ISA = volatile at present (world events) but likely to grow the best in the long term.

Pension = very long term savings option where they only gain access age 57.

Ideally you could do a mix of all of the above but as there is only so much £££ in the pot then do your research (there's another thread about financial literacy on the go the last few days) and pick whatever suits your circumstances best.

FYI I use Vanguard at present for pension and S&S ISAs having used traditional banks when they were younger. If I had my time again then I would have started the pension from birth and likewise the S&S ISAs. Vanguard is one of many providers ie more research for you.

Have a look at Money Saving Expert on children's savings accounts.

Thanks so much all, that's really helpful. I will do some research this week.

We went with premium bonds. Any winnings are reinvested.

However they get control at 16. However, me and dd agreed I would continue adding to them while she isn't touching them.

They win, roughly, about £25 a year. Dad puts in some money for their birthday and Christmases. It's building quite well.

Thanks for all the advice everyone. Can I just check - I know though I would like something risk free, as high interest as possible, a separate account for each child to keep it straight forwards and to give them savings goals to work towards when they are older but probably in my name so that if they are not ready at 18 for the money then I can choose to delay passing it to them. Something simple ideally that we can pay a small amount into monthly, with any birthday money etc and that ideally I won’t need to think about moving/transferring. I think maybe an S&S ISA of some kind is best for this. Is that correct? Thanks again.

I'd go for a junior ISA but invested in funds rather than cash. With inflation forecast to hit 7% by April, the 1-2% returns in a cash ISA or savings accounts is decreasing by 5% in real terms.

The average return on the FTSE 100 is 8-9% per year in the last 35 years. That includes some huge market downturns such as the bursting of the dot.com bubble and the global financial crisis. The market has dipped in the last few months so it's not a bad time to buy if it's a long term investment.

My top performing fund went up by 120% in 2020. You can make some very good returns if you pick carefully, and are willing to sit tight during the market downturns.

risk free, as high interest as possible - those two things don't usually go together, let me know if you find it! The lower the risk, the lower the return generally

a separate account for each child to keep it straight forwards and to give them savings goals to work towards when they are older but probably in my name so that if they are not ready at 18 for the money then I can choose to delay passing it to them - If you save into an ISA for them in your name, that will reduce how much you will be able to put in for your own savings, so you need to consider that too.

It sounds like you are looking at a couple of long-term savings accounts in your name, or something like premium bonds. But if you want the money to work for you/them over 10+ years, cash isn't really the best vehicle.