Childrens savings accounts

If the interest in a tax year accross all accounts (excluding a JISA/CTF) exceeds £100 per child per parent it is counted towards the personal savings allowance of the parent. The banks are not really interested in whether you use their childrens accounts for your own money or not. At least I have never been asked and have easily transferred money from various banks into my accounts to move elsewhere.

As Mallygirl says, if you are happy to lock it away until they are 18 a S&S JISA is likely to give better returns. If you want the option to withdraw earlier or do not want them to automatically get control at 18 you need to look at other options such as those you mention in your post.

Have you considered a regular contribution of £25 per month into an investment trust (such as Monks) via a children's plan? You have the choice of keeping the money in your name and you get an annual tax free allowance for the dividends and capital gains when you withdraw. If it does really well you might need to spread the withdrawals over 2 tax years.

https://www.bailliegifford.com/en/uk/individual-investors/how-to-invest/childrens-savings-plan/

The value will go up and down with the stock markets but it might give a better result than saving in cash. We just started doing this for our toddler son.

Alternatively if you are happy for the money to be accessed by the child at 18 then our son's Junior ISA is with Orbis who accept contributions as low as £1. Orbis have outperformed the MSCI World stock market benchmark by an average of 4% per year since starting in 1990. If you delay opening an account then in a couple of weeks Orbis will run an offer where if you deposit the first £100 they will add £100 and you can do this for each child under the same parent login.

https://www.orbis.com/uk/individual/isas/junior-stocks-shares-isa

You could also have a S&S ISA in your name (£100 matched again) which you know is intended to help the child.

If you go down the S&S route you would want to reduce risk in the final 5-7 years to reduce the impact if withdrawal at 18 occurs when markets are low. Vanguard offer target (retirement) date funds that can do this automatically within their S&S ISA and Junior ISAs (which you can transfer to later). The VTR2035 fund may be appropriate for both of them.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds
https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa

Hope this helps,
Alex

MallyGirl wrote: »

II now pay the child benefit equivalent into a Nationwide reg saver, plus I cycle money from a young saver account through a regular saver for a small boost.

Very noble - our child benefit money goes on takeaways and holidays as we like to waste the government's money!

It's the hard earned money that gets saved and invested; I can't bring myself to spend that.

Alex

Depending on the amount you have to invest for your child the Nationwide Smart Limited Access account is definitely worth a look...