Child savings/investments what to do?

[Hopinghonestly]

I have opened an easy saver for my child which each month i put a bit into. (Between 30-50 at the moment, COL is crippling us but im adamant on something)

She has inherited 2000 which is in there aswell.

I was going to place it into a secure account no one can touch but her till she was 18. But it had a lower interest rate and no opportunity to boost the amount. Would there of been a benefit i dont know about?

How would you go forward with this? Im confused how to boost the potential of the money for her..where and how to invest it.

What are you doing moneywise with your children?

We have Stocks and Shares Junior Isas for our two girls; this is money they will have access to at 18, so we don't want too much in there in case one (or both!) are fritterers at that age, but enough for a good start for uni, a gap year, driving lessons, all that jazz. You can add monthly to JISAs or in lump sumps occasionally or whatever.

We will have savings for them in our own names for a house deposit when they are old enough to want that, spread across our own ISAs, high interest savings accounts and general investment portfolio with some in premium bonds too (this is mostly to spread our tax liability a bit as we are subject to income tax on savings but PB returns are exempt from tax).

We will gift that money to them when it is needed.

It's worth thinking about what you want that money to do and when you want your child to have access. Teenagers can vary in maturity - some will get a lump sum at 18 and fritter it away, others will be very sensible, and it can be very difficult to know which your child will be! So my inclination would be not to keep all their savings in an account that will become theirs at 18, but spread it so they have access to some money but you have further savings you can draw on for them when needed.

There's some good advice here, including a YouTube video with Martin Lewis (although the interest rates are out of date)

https://www.moneysavingexpert.com/savings/child-savings-tax-free/

Have a good look at MSE , Money Saving Expert, under savings / children’s savings.

Getting a high interest rate is important but check whether the various accounts recommended suit your needs, e.g you can make frequent deposits, you can take the money out and move it elsewhere if rates rise again, etc.

There is a really good overview of managing children’s finances and how to involve them so that they learn about savings etc.

Other things to consider:
If you fall on hard times money saved for your Dd but in an account in your name will be taken into account for a UC claim.

My mum saved a lump sum for me to access at 25, which was the perfect age imo as I used it for the solicitor fees for a house purchase. This was set up in the 90s and there were a couple of lessons I took from it.

Firstly, investments vs savings is an important choice, mine was investment which could go down as well as up, it was also a "managed" fund, so the broker took their fee before the investment saw any return, of course it yielded barely more than the amount my mum put away as a single parent, something which stuck in my throat and has made me triple check who is actually making money off the money!

Straight savings interest rates have improved recently, you then need to choose if this is an isa (so tax free) or a standard savings account which tend to have a slightly better interest rate but you'll need to check the tax liability if its a large amount (rule of thumb I think is £1,200 in interest over the year as an allowance before tax is considered).

Child savings accounts will be in their name, I think its actually an important distinction if this money is your child's, or if its your money you're putting aside to meet their needs. So personally I would give them the inheritance in accordance with the deceased wishes, but keep the setting aside money separate- your circumstances can change dramatically, so you need your own household savings cushion first.

Money saving expert is a really great resource to look into this, everyone's circumstances and values are so different with money, so it's whether the flexibility is more valuable than the return on investment and the sums of money involved.

For your portfolio where do you invest?

What place did you get the stocks and shares ISA?

Ive seen some with great rates, but customer reviews were bad so im worried where to place my trust.

Ideally i want a foundation for her as she steps into adulthood. Deposit for home, study ect just want a bit of a start for her. We have had financial problems so i am adamant that she will not be dragged down due to any adults in her life.

Money in her own account is safe though? I dont want anyone to take a childs money :(

I will check out money savings expect.

At the moment it is all in a childs easy saver account until i work out what to do.

Money in the child's own name is disregarded for a UC Claim by their parents. Maybe if they hold it for the child but that can get complicated:

ADM Chapter H para H1077 Capital owned either legally or benefcially by a dependent child or qualifying young person is not to be included in the capital of the claimant1 . However, the DM may still need to make enquiries about such capital if it appears to be owned by the claimant but is actually benefcially owned by a child or young person for whom they are responsible.

I just follow money savings expert recommendations, but often move their money about for better rates or have more than one account for them, as higher interest is often capped at a certain amount.

I’ve maxed out the ones available to them for their ages with decent rates, but with the interest rate increases I’ve found the rest is better off in my name so I can get the best of those new higher rates. The kids ones aren’t keeping up beyond what I’ve already got in place for them.

And talk to them about it - even accounts that run until 21 the bank switches at 16 to contacting the child direct about it, rather than writing care of the adult.

That's how I found out I had one of these as I picked up the post one day and there was something addressed to me! Fortunately I was a sensible teenager but it could all have been frittered away very quickly.

@Hopinghonestly I'm paying £240 per month in JSIPPs for my DCs which the government tops up to £300. I'm with fidelity for now which has no platform fees for under 18s. I'll stop when they start work. I only started these a few years ago but they're up 30%.

Other than that we have our own investments which we'll sell when they need a house deposit. DS has an online business which fits in around school and so far this year he's made £10k! He's investing this in a JISA. DD also has a part time job and made around £2k and puts what she can in a JISA.

Thats amazing. I will look into fidelity.

That is amazing to hear your kids already being so responsible and savvy.

@Hopinghonestly.. We have 2 isabel for them.
One is in cash and i hope that one will be for car, driving lessons and so on.
The other is their capital. It's a stock and share with hargreve and landowne.

We invested in vanguard funds mainly as they are low cost and broad eg invested in hundreds of companies across different sectors m we have a japanse fund, us s and p 500 ( which means they are invested in alphabet (Google), apple and so on).
UK vanguard ftse allow shared which is our whole stock market.
I also put a small % in what I call my gamble fund, Scottish mortgage and fundsmith.
Very good book to read, the simple path to wealth and money podcast meaningful money.
Mr money moustache etc.
All will say... Index funds.

I need to get a global tracker into their portfolio.
Some believe all you need is us s and p 500.

Ideally I would have had more in my name dot them but unfortunately it's in theirs.. However I've started money management with then, both have a few 100 in bank with their own bank card.
To help them learn to budget.
I also hope the amount in the cash isa is what they will use for general life and the stock is their capital.

I have a book called grandpa's guide to money and that's fabulous and Ive read that to them.
My 10 year understands why Unilever is a great company to have shares in but also why having individual shares is risky.

Something to think about, not sure how well this is policed but I had no idea!

https://www.gov.uk/savings-for-children

Junior S&S ISAs for each, invested in vanguard global all cap. Both have years to go till 18 so I'm expecting decent growth. I'm considering a SIPP instead for one child who may need disability benefits as an adult, and an ISA would potentially affect any claim. The other child, more likely to follow a uni path, would stick with ISA to support early adult years, first property etc. That child is starting to take an interest in it too and I can see has potential to be a squirrel once over the spending pocket money on Prime stage!