Effective ways to save for children

[SueW]

DD was born in 1996 so AFAICS I can't open a Child Trust Fund for her, because these only work for children born in ?2002 and later.

So what's a good way to save money regularly for her? At the moment I have a PEP/ISA or something like that that's earmarked for her future i.e. at 18/21 but in my name and we also pay a small amount each month into a savings account which earns very little in interest. Oh and a post office account which gets loose change collected in a jar paid into it when the jar is full!

I want something long term we'd never think of breaking into; something shorter term that's 'hers' but earmarked only for special treats such as a fantastic school trip we couldn't otherwise afford and something she can have as a pocket money account.

Any ideas?

And at what age do banks/build socs allow children to have hole-in-the-wall cards?

[SueW]

Thanks LL

[hecciesmum]

OK

For longer term - how about a managed savings account. You can do this with big insurance companies. i use Royal Skandia for my kids. the money is invested in equities/property/bonds depending on the mix I choose. I can also choose which funds to invest in. It's going to be sitting there for another 18 years at most, so I'm prepared to have the risk of holding equity (shares) as the underlying. You set up a standing order for whatever you want to put away and it goes off aiutomatically. You have to commit initially to 12 months of contriubutions, after that you can stop paying in if you like. Believe me you won't touch it.....my children's one has grown really well in the last 4 years.

For medium terms special treats - I'd open the childrens savings account as suggested by little lapin. 10% is a good rate. Again - set up a standing order from your own account...it'll mount up fast. if you do a restricted access 60 or 90 day account it's even harder to take it out!

Pocket moneywise - I'd stick to the jam jar for now and when she is 12 or so, get her a current account with a cash card for that account, so she can take it out when she wants...(if you feel she is responsible enough)

[Katymac]

It's only 10% on paper

If you put £1000 in at the beginning of the year 10% would mean you would get £1100 at the end

But you can only put £100 in a month so it averages out at about 5% in the end - it's a bit of a swizz (IMO)

[Oblomov]

LL, I realised that Ds has £1000's the other day. I was tempted to draw a bit out. Naughty me.

[blueshoes]

Sweep all dd's child benefit into the savings vehicle. I prefer equities for long term. A fairly safe conservative fund to reduce risks but that historically should outperform deposits. Or drip feed into a tracker fund if you don't like the high management fees.