Saving for children - what do you do and advice please!

[papillonrouge]

I'm getting a bit confused by my options!

DS1 has child trust fund which we put money into each month. DS2 was born after these were abolished so I want to open something similar - I have worked out that Junior ISAs are the equivalent but question 1 is:

1. Should I open a cash Junior ISA or a stocks and shares one? I would get 6% on a cash ISA as my adult cash ISA is with the Halifax.

I am seeing these accounts as a way of the children having a small amount to spend at 18, probably on something fun such as a car or a bit of travelling. I also want to start putting money away for more serious things such as help with deposits or tuition fees - this would only be a small amount each month but I reckon anything is better than nothing. So question 2:

1. How do you save long term for your children?

Maybe I should go and see a financial adviser? Thought I'd see what you all would suggest first!

DC1 and 2 have the child trust funds, but DC3 was born after they were abolished. I don't actually do anything with this money.

I also set up HSBC savings accounts for all 3 children and each month £20 goes in to each account. I'm not sure what this money will be used for in the future, but they might find it more useful at house buying stage possible.

*possibly

I'm interested in this. Dd3 has a CTF but dd1/2 are too old, am tempted by putting their money in junior ISAs but don't know enough about them. They've all got general savings account at the moment.

My DS was born before CTFs happened. Like other financial planning I'm hedging my bets :) I invest a little each month into a unit trust that matures when he is 18, a little more into a Junior (stocks and shares) ISA and he also has some cash savings in long-term bonds. I track the performance of all of them so that I can see if I need to adjust. He's pretty careful with cash already so I'm hopeful he won't blow the lot quicker than the 18th birthday cake candles.

Thanks for all the responses.

Cogito - how come you don't have a cash ISA for him? Is it because the stocks and shares one is likely to grow more by the time he reaches 18? And are all the savings in his name? Sounds it if there is even a possibility he could blow it at 18!

He doesn't pay tax on interest so I didn't see the point of a Cash ISA. He has cash savings in the form of long-term bonds and the interest rate I can get is respectable. Stocks and shares generally perform better over an 18 year period than cash deposits and so far so good. It'll all be his on his 18th birthday to do with as he wishes. He already knows that, come the fateful day and he gets the cash, the 'Bank of Mum' will be closing for business. :) Job, training or a university degree are the only acceptable choices.

Like cogito I have gone down the stocks and shares route. DD was born in the CTF era and has a non-stakeholder stocks and shares account which so far over the last 7 years has far out performed savings accounts with average growth being about 7 percent. History says that the stock market over a 15 to 18 year period will far outstrip savings accounts.
My target is 44,000 at 18 which should cover a 3 year degree course or a good start to a house deposit.
I have also set up my pension as a family SIPP so that DD can join that as soon as she starts work.

Fantastic, thanks both. Looks like stocks and shares ISA is the way to go.

The Halifax cash ISA is only 6% for one year, then its variable after that.

DS has a regular saver (Halifax 6%) that closes after one year
A long term stocks and shares ISA thingy
A long term fixed account with a little bit of money that pays 5% a year fixed until he is 18 (max £500 in the account)

So we have gone for a mix of different accounts to spread any risk.

Apparently, you have to be careful as under 16s can be made to pay tax - the parents can be liable if you are the sole person funding the account as HMRC could consider you are putting money in your child's name to avoid tax. (Of course you would have to be getting loads of interest for the revenue to bother investigating but it is possible)

He also has a pension, funded by his grandpa. Really. He has a pension. He is not even 1 yet!

DS was born before CTF, we got him a FTSE allshare tracker fund (FTSE 100 + FTSE 250), it has low fees and tracks the stock exchange closely. He has ~£10k in there ATM, and a further £2k in a current account in case he needs money before he's 18.
DD has a CTF and a current account. I put in £75 a month for each of them, as that is roughly equivalent to DSs child benefit, topped up a little for DD.
The Motley Fool has a book on investing for children.

Hi, I've three, all have CTFs, a small amount goes in each month. They are all stock CTF as I think / hope that growth will add up for when they can have them at 18. They are intended for car / uni etc but I won't have any control so the amount that will go in will be limited. This is based on my DH experience, he still has the savings that he got at 18, his sister spent them on clothes and going out at 18. I think that they need to learn responsibility for money but I'm not about to let all the hard earned savings be p***d up the wall. I could do that myself.

We are also saving into a Stock ISA (FTSE tracker) in my name, so that we can retain control, that will be used on uni / house deposit etc. The majority of savings go into this, including gifts from grandparents. They are too young at present to realise this is what happens to their presents, may change in the future.

Thanks for the other responses. Love that a baby has a pension!

We have CTF for the DC.
DPIL gave cash at Xmas and Birthdays, but ROI was pitiful. We have taken it out ( with their permission) and stuck it in premium bonds. We also put money into the premium bonds for niece and nephew who live abroad and so miss out on pressies. We keep a tally as to who is entitled to what, so if we win big, we know how to share it out. So far no big wins, but a better return then the bank was giving .

FWIW, we have:

Short term savings - Halifax Child Accounts paying 6% interest.

Mid-term - CTF / Junior ISAs (for uni fees etc).

Long-term - also pensions. Never too early to start! DS is 8mo.