Saving for 18

[Daddyoftwinnies]

Hi all. I’m looking at saving around 10k for each of my kids so that we can support them through Uni or wherever their journeys take them... There are Junior ISAs out there with interest rates of 2.5% ish. My worry is that an ISA would transfer to their names when theyre 18 and that young teens would burn through £10K quickly. Ive seen bonds out there with similar rates and I would remain the trustee of their money and I can support them with that money. Standard savings accounts arent worth anything nowadays with less than .5% interest. Would love to hear what you all have chosen to do with regards to savings! Thanks for your help!

DS1 is 18 next month. He will have around £10k in his ISA plus smaller savings in his current account he has earned himself.
He's very sensible (!) so have had a long chat and are trusting him with it going forward. Interest rates are so poor though, will help him shop around and transfer out to a better deal. May just stick it in premium bonds, I've had some success there!

Should say we are lucky in that PIL have put savings aside of £30k for each GC towards uni fees. I would hope his £10k starter from us will be towards a house, car etc.

You could just put it into your own ISA to give to your children as and when you wish. Just go with a stocks and shares one and get a sensible fund. That makes more sense than any savings accounts.

If you’re older parents, you could also add the money to your pension (eg a SIPP) as that’s tax efficient so your 10k would be 12.5k or even 16.7k straight away + it’d grow in a good fund. You can only get the money out 10 years before state pension age at the earliest so only works if you had children late.

I did a similar thing this year, set up stocks and shares ISA for each of DCs. Mostly out of luck I timed the market right and brought L&G technology fund. But think technology will cool now that a vaccine appears to be on horizon, but still good for long term.

I do have similar concerns regarding children have access to money at 18, but it's done now, but agree with jojo that it's better if you set up in your name.

Stocks and shares ISA is the way to go - provided you carefully select your funds.