Childrens Savings

Mancunian · 15 June 2004 at 9:19PM

Hi All

my little-un is now 1 year old and I'm looking at what to setup for him with regard to savings and investments - maybe something probably running until he is 18.

I looked at the best childrens savings (Abbey) and also thought about using mine or the wifes ISA entitlement.

I would appreciate any advice.

isasmurf · 15 June 2004 at 11:13PM

It depends what your looking for and what risk your willing to take?

On the Instant Access Savings accounts, Alliance and Leicester pay 5.05% (before this months rate rise) on their Childrens acount. If you take out a savings accoutn remember to fill in a R85 to get the interest paid tax free.

If your willing to take risks then perhaps some kind of investment with a friendly society might be good -you've got a £25/month tax free allowance with friendly societies. I'm not familar with these, but other moneysavers might be able to provide more advice.

Finally I wouldn't waste using your (or your wifes) ISA allowance. Don't forget that the Government will be giving your child at least £250 to invest in the new Child Trust Funds next year, which to me seem to be on similar guidelines to ISAs. You will be able to contribute up to £1,200 a year to the CTF as well, all tax free. Although your Child cannot touch it until he is 18.

dunstonh · 17 June 2004 at 2:08PM

placing funds into a childrens savings with a friendly society may not be good advice at this time.

One of the larger players has just withdrawn its products because the forthcoming childrens plans are better value money and wishes to avoid potential misselling claims on the basis that the current product is not as good as the incoming product.

Personally, its a tricky one as the incoming childrens savings product is likely to be better but nothing is finalised yet and the Govt has a history of changing things right upto the period when the product is meant to go live.

I would place money into something with fairly good access and sit and wait to see what happens. If the new range is better, then move into it then. If its not, the old products would still be available.

Electric_Ant_2 · 18 June 2004 at 2:20PM

I'm also looking for a good Children's account. I get my Child Benefit paid directly into a B/S account so I'm putting aside about £60 a month tax free but interest is only 3.5%. I was thinking of moving it to Alliance and Leceister even if it is a temporary move but if these new products offer something better and should I wait?? Do you know when these will be available??

Cheers

System · 19 June 2004 at 4:32PM

OKAY, OKAY,

I have the exact same problem as the poster, however i have done some research and found the best accounts available now i just don't know which one to choose so some advice/opinions please.

First account i came across is
Halifax monthly saver rate 5.1% VARIABLE
i can put in as little as £5 a month and can make 2 withdrawals a year with out losing my bonus.

Next is their regular saver with a FIXED rate of 6.05%
However my minimum deposit is £25 monthly, after 12 months i my money is then put into another one of the savings accounts??

Then their is the alliance in leicester first save childs account with a rate of 5.05% VARIABLE (annual) with all the flexablity of a normal account.

Last but not least there are the children investment bonds offered by friendly societys which are all basically the same.

Please help me what should i do?? should i go for a fixed or variable rate account or should i go for an investment bond would my returns be higher with a bond and if so would they be a lot higher?? HELP ME ???!!! :' :-/

dunstonh · 20 June 2004 at 3:00PM

The child trust funds are "sandler" based contracts (which to everyone outside of financial services means it will have low charges) which also gain a contribution from the Govt for all children born after Sept 2002. They are planned to be launched in 2005.

There is still some discussion going on as to how the final product will end up but some friendly societies are already withdrawing the child savings products to avoid potential mis sale claims that they knew a better product is coming but continued to sell the old one. (this follows similar actions by providers when the stakeholder pension was due).

The expectation is that there will be a child savings product for children born before Sept 2002 based on the same charging structure but wont get the £250-£500 contribution from the Govt. Some friendly societies have launched "sandler friendly" savings products already but most havent.

philcdav · 4 July 2004 at 7:11PM

Also been searching for best childrens accounts but for grandaughter. This link has helped...

http://www.money-online.uk.com/savings-accounts.html

and more specifically this ...

http://www.money-online.uk.com/child-savings-accounts.html

One issue not mentioned so far is that many of these accounts are BRANCH only and may not be local. It seems pointless to be travelling 15 km for me to reach my 'local' Alliance and Leicester for 0.5% on a regular basis.

That said, the £20/month going into a Halifax child account is a real waster and annoying me immensly.

Please be gentle as its my first time !!

regards - phil

Childrens Savings

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