Saving for my grandchildren
Juliajoules
Posts: 1 Newbie
I have a 4 month old granddaughter and would like to start saving now for something really meaningful. I was thinking I would put away £1 week for the first year, £2 a week for the 2nd year £3 a week for the 3rd etc . Anyone got any advice one where to put this money and what to do with it?
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I opened an account at the Halifax for my Grandson in January 2017 with £50 and I put £10 a month away for him.0
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Using savings accounts is pretty pointless these days, as the money will be worth less when she's 18 than when you put it in.
Something like a Junior Stocks & Shares ISA is what you need, one with low charges, esp if you're starting a £1pw.0 -
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I assume that you are looking to save until she is 18? If so, that kind of timescale strongly suggests a stock market investment - something like the Vanguard LifeStrategy funds, or Blackrock equivalent, will do the trick (cheap, well-diversified, automatically rebalanced) . The issue that may apply here is the small sums invested. Dealing charges are low/zero on many platforms but there is usually a minimum investment required to keep platform and dealing charges low. Would it be possible for you to, say, invest a £100 lump sum each year rather than £1/£2 per week? This may make the stock market investment a viable option.
The other issues to consider:
- Are you likely to have more grandchildren? If so, you may need to plan for similar savings for any new addition.
- How good are the baby's parents with money? As a JISA is under the control of the parents until the child turns 18 the parents will have complete freedom to access the funds prior to that point.
My parents and I have been saving for my nephews (now age 12 and 10) since the eldest was born. We began by popping £150 p.a. between us into a child's savings account (with me as trustee). This increased to £300p.a. when nephew number 2 came along.
The administration was so onerous, and the returns so pathetic, that eventually we did the smart thing and transferred the cash into an S&S ISA. Unfortunately the children's parents are not great with money and my parents and I decided to keep the ISA under our control. Their investments are currently held in my dad's name. We have been adding £600p.a. since 2014 and it's now a pretty decent sum.
If you prefer the cash savings route then a child's regular saver a/c will give the best rate. The Halifax usually tops the interest rate league on these accounts but you need to invest a minimum of £10 per month and (warning) these accounts are a complete pain to administer if you are not the parent (been there, done that).0
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