Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Entsman
    • By Entsman 7th Sep 17, 7:18 AM
    • 20Posts
    • 0Thanks
    Entsman
    Children's easy access accounts
    • #1
    • 7th Sep 17, 7:18 AM
    Children's easy access accounts 7th Sep 17 at 7:18 AM
    Unsure about the best children's account to deposit two cheques for 75k each from a grandparent made out to my young children ( 5 & 3 ). I will at some point decide on a child's pension & a child's isa or other investments and possibly property as for us long term property and rental income has proved to be a good investment. So the best easy access account please..
Page 1
    • Entsman
    • By Entsman 7th Sep 17, 8:06 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    • #2
    • 7th Sep 17, 8:06 AM
    • #2
    • 7th Sep 17, 8:06 AM
    I have looked Santander but you have to be a current account customer and looked at nationwide but it comes with a one time withdrawal and after that the rate drops
    • tim_n
    • By tim_n 7th Sep 17, 8:20 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    • #3
    • 7th Sep 17, 8:20 AM
    • #3
    • 7th Sep 17, 8:20 AM
    You can only invest £4,128 into each childs JISA. Child SIPP is limited to £2,880 and the government tops to £3,600. The other childrens accounts are likely not to help much as the high interest ones you can only trickle about £100 a month, Santander only takes a maximum of £2k total (that pays interest)

    Halifax might be the cheapest annual fee, perhaps stick it in a vanguard LS fund or similar.
    Tim
    • Keep pedalling
    • By Keep pedalling 7th Sep 17, 8:31 AM
    • 3,559 Posts
    • 3,831 Thanks
    Keep pedalling
    • #4
    • 7th Sep 17, 8:31 AM
    • #4
    • 7th Sep 17, 8:31 AM
    Unsure about the best children's account to deposit two cheques for 75k each from a grandparent made out to my young children ( 5 & 3 ). I will at some point decide on a child's pension & a child's isa or other investments and possibly property as for us long term property and rental income has proved to be a good investment. So the best easy access account please..
    Originally posted by Entsman
    It's the children's money, you should not be deciding to place any of it in a pension putting out of their reach for decades. "Property for us" is also a big no no, the money needs to be invested individually for each child and no one else's benefit.

    Sounds like you really need to take professional advice.
    • tim_n
    • By tim_n 7th Sep 17, 8:46 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    • #5
    • 7th Sep 17, 8:46 AM
    • #5
    • 7th Sep 17, 8:46 AM
    It's the children's money, you should not be deciding to place any of it in a pension putting out of their reach for decades. "Property for us" is also a big no no, the money needs to be invested individually for each child and no one else's benefit.

    Sounds like you really need to take professional advice.
    Originally posted by Keep pedalling
    Property can be held in trust with you as a guarantor. If the market takes a tumble I will liquidise my sons assets and get him on the housing ladder, preferably with a house with the rental being used to pay off a mortgage. 15 years of mortgage payments on a 25 year mortgage, along with the usual rise in property prices will ensure a good pot of money that's not easily available on his 18th, but is available if he really wants it. Alternatively he has a house to live in away from Mum and Dad which frankly has to be worth its weight in gold at 18...
    Tim
    • Entsman
    • By Entsman 7th Sep 17, 9:31 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    • #6
    • 7th Sep 17, 9:31 AM
    • #6
    • 7th Sep 17, 9:31 AM
    Yes I agree it's the boys money but I would like it to grow for their benifit not ours, maybe the pension may not be the way to go however for a small investment there could be a fantastic pot at the end of it for them. We own property and have seen in both cases of the property we have had our intitial investment grow from 55k to 149k in 12 yrs plus the addition of 6k a year rental potential and our own house we bought for 90k cash 15 yrs ago now worth 490k, to me property makes solid financial sense rather than other investments but seems to be not a favoured investment on the forums?..the boys are very young and we would be trustees with the finance until they are 18 whatever happens, but when they are 18 I know which pot I would prefer..We live in the South East ( Leigh on sea )and here property prices only seem to rise..It's a large sum of money so I want to make it grow for their future...
    • Entsman
    • By Entsman 7th Sep 17, 9:39 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    • #7
    • 7th Sep 17, 9:39 AM
    • #7
    • 7th Sep 17, 9:39 AM
    Keep peddling I totally disagree that we should not be deciding what to do with their money, they are 5 & 3 hardly in a position to decide themselves ( don't want 75 grands worth of Peppa Pig toys) you make us sound like we are only interested if it will benifit us this could not be further from the truth..If we are not to decide for them who is?.. don't want it sitting in a building society for the next 13yrs earning a pittance of interest..Thanks for your reply but no thanks for your judgmental opinion...
    • tim_n
    • By tim_n 7th Sep 17, 9:51 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    • #8
    • 7th Sep 17, 9:51 AM
    • #8
    • 7th Sep 17, 9:51 AM
    Yes I agree it's the boys money but I would like it to grow for their benifit not ours, maybe the pension may not be the way to go however for a small investment there could be a fantastic pot at the end of it for them. We own property and have seen in both cases of the property we have had our intitial investment grow from 55k to 149k in 12 yrs plus the addition of 6k a year rental potential and our own house we bought for 90k cash 15 yrs ago now worth 490k, to me property makes solid financial sense rather than other investments but seems to be not a favoured investment on the forums?..the boys are very young and we would be trustees with the finance until they are 18 whatever happens, but when they are 18 I know which pot I would prefer..We live in the South East ( Leigh on sea )and here property prices only seem to rise..It's a large sum of money so I want to make it grow for their future...
    Originally posted by Entsman
    Ha. I'm only just round the corner. Leigh on sea is a pretty good area for property investment if you get a cheap property and do it up. Doesn't mean to say they're not over valued. All these bull markets and growing evidence of a deflating property market may mean we plateau rather than crash for a while, or saunter vaguely downwards for years to come. Who knows... there's an element in risk no matter what you do. Property is generally much more hassle than a S&S isa. If you're renting you have many legal requirements to the tenants and it certainly complicates any self assessment you have to fill in. I bought in 2011 and certainly have a good rate of return on my property on paper.

    I don't think you can go wrong with a SIPP with a vanguard LS80-100 fund, you're getting an additional top up from the government! There was an article from the independent a while ago which estimated with a 10% growth year on year over any 25 year period (which was the average from a study from barclays iirc) you could be looking at a return of £512k for an initial investment of £2,880. Put the maximum for 3 years and that's a pension pot in todays money of £1.6m. Of course, that's going to be worth a lot less in 60 years time.

    Whilst pensions are great, they usually require you to pay in proportionally the most when you need the most money in your life - when you're setting up. If you have several years of pension contributions made when you're very young and/or a house bought in trust, with some third party paying the mortgage, I fail to see how that's not a sensible decision.

    I know if I'd had that sort of money at 18 (I had £700) I would have made sensible decisions and hope my son will do the same. However I'm well aware even though I turned out as sensible as my parents could have hoped, I still have made silly mistakes that helped me learn. Having the sort of money you've got for your kids would have let me make more serious silly mistakes.

    My decisions for my children are how I would have liked my money invested. It sounds like you're making the sort of decisions I would make. I had to argue with my inlaws over my sons inheritance when I invested £2,880 of 10k into his pension.
    Tim
    • Entsman
    • By Entsman 7th Sep 17, 10:08 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    • #9
    • 7th Sep 17, 10:08 AM
    • #9
    • 7th Sep 17, 10:08 AM
    Hi Tim, there you go small world and what a great place we live.. I never thought getting 150k inheritance from their grandparent would be such a headache lol..As a landlord already of a couple of flats in Westcliff I am very aware of the pitfalls and costs involved in owning and renting a property but long term i.e. 13 yrs till the first one reaches 18 I still feel the financial reward will Pass any other investment ( I may be wrong of course)... I will look in more detail at the SIPP Vanguard and the S&S Isa... many thanks ��
    • Entsman
    • By Entsman 7th Sep 17, 10:14 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    Hi Tim
    Aren't my boys to young for S&S Isa? Or can they use a trustee?
    • xylophone
    • By xylophone 7th Sep 17, 10:23 AM
    • 22,855 Posts
    • 13,207 Thanks
    xylophone
    http://forums.moneysavingexpert.com/showthread.php?p=73078533#post73078533


    Post 5.
    • tim_n
    • By tim_n 7th Sep 17, 10:26 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    You can get JISA for max of £4,128 for each child from birth. When they reach 18 they get the usual £20k.

    If you buy property in trust I would assume they will lose benefits such as LISA (if they still exist) when they reach 18 for the purpose of buying their "1st home" as they'll already have one. It would still be available for them to put money away for pensions.

    The benefit of the JISA is keeping capital gains at bay. Putting the money into a normal dealing account and investing it or buying a property puts you at risk of capital gains if the annual increase in value is over 11ish k.

    I don't know how capital gains applies to the purchase and subsequent sale of a property bought under buy to let in trust. I imagine it would.

    You could always buy something like the vanguard funds under a dealership account, sell some at year end and transfer into S&S ISA. I doubt as non-earners they'll ever have to worry about capital gains in that scenario over 13 years.

    edit: +1 to xylophones response about JISAs.
    Tim
    • Entsman
    • By Entsman 7th Sep 17, 10:33 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    Hi xylophone

    Yes I read your post and did some research on my previous thread.. Nationwide great 2.75 , however if I want to transfer or withdraw for any reason to invest elsewhere I lose that rate..Halifax seems ok on first 20k at 2% but after that 0.5% but let's face it now is NOT a time for savers.. still looking into the other suggestions on your previous post..
    Thanks 👍
    • tim_n
    • By tim_n 7th Sep 17, 10:36 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    The other thread follows similar opinions. Each financial institution offers more than enough protection if you need to just dump it somewhere before investing it. I use santander account in my childs name for any relative to deposit directly into. Therefore I have a record of who gave the money without having to keep additional records. It's about as easy access as we need. Doesn't pay any interest over the first £2k though. It's just used as a deposit account though.
    Tim
    • Entsman
    • By Entsman 7th Sep 17, 10:45 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    Hi Tim

    Ok so is there an interest rate on a jisa and I'm assuming the S&S Isa follows a certain criteria? And my boys would not pay tax anyway as I think I'm right in saying they are allowed an annual tax free allowance before tax so what's the point to an jIsa?
    • xylophone
    • By xylophone 7th Sep 17, 10:56 AM
    • 22,855 Posts
    • 13,207 Thanks
    xylophone
    With regard to income tax/CGT on the Bare Trusts which the grandparental gifts have created, see

    Post 9 http://forums.moneysavingexpert.com/showthread.php?p=73091508#post73091508

    As to the benefit of a JISA, what is the benefit of an ISA?

    The benefit is that the cash/assets within the JISA/ISA wrapper grow without incurring a tax bill.

    By the time a child is eighteen, the value of his JISA may be quite considerable and outside the JISA subject to tax.

    At 18, the JISA becomes an ISA and the cash/assets can continue to grow tax free.
    • tim_n
    • By tim_n 7th Sep 17, 11:08 AM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    What xylophone is.

    A cash jisa pays just pays the interest rate on the tin. And accumulates. You're allowed £1,000 interest on savings.

    if you could invest all 75k at 3.25% will be worth £110,089 after 13 years, generating 3,578pa. If they're in employment earning £11,500 they will be taxed at 20% on the £2,578 interest they're getting a year. In a ISA they'd not be being taxed at all on it and could have savings outside the ISA earning additional interest.

    If you put it into a S&S and got 8% interest it could be worth £188,863 and be earning £15,109 in interest pa.

    Obviously you can't just dump it all into an ISA sadly. So it'll be fed in slowly. By the time 13 years have passed, you'll only have got £54k in there assuming they don't increase the JISA limits. You could still make a couple of pension contributions with the rest. Remember they have instant access at 18 with the £54k.
    Tim
    • Entsman
    • By Entsman 7th Sep 17, 11:22 AM
    • 20 Posts
    • 0 Thanks
    Entsman
    Ok, thanks guys... think I will dump it all in the best children's instant access account available now and then if I don't go down the property route I will defiantly either go S&S Isa or Jisa or both if I can? And feed it the max every year until they can access it at 18 ( that might be dangerous lol) also think the SIPP makes sense long term... thanks
    • xylophone
    • By xylophone 7th Sep 17, 12:53 PM
    • 22,855 Posts
    • 13,207 Thanks
    xylophone
    Each child can have a JISA and other accounts (cash/stocks and shares) held in bare trust.

    See post 5 http://forums.moneysavingexpert.com/showthread.php?p=73091508#post73091508


    You might open a JISA for each child now and contribute the full amount.

    You might then open (say) a smart limited access account (or other cash account) for each child.

    You might deposit £30,000 over these accounts for each child and gradually move it into the JISAs each succeeding tax year.

    You might use the balance of the funds to open (in bare trust) a stocks and shares /investment trust account for each child.

    Once all the cash has been used up to contribute to the JISAs you might sell and transfer out of these to contribute to the JISAs.

    http://www.hl.co.uk/investment-services/investing-for-children

    http://monevator.com/how-to-invest-for-children/

    If unsure you might see an independent financial adviser.
    • tim_n
    • By tim_n 7th Sep 17, 1:14 PM
    • 1,564 Posts
    • 1,315 Thanks
    tim_n
    As you're local, I am using Martin Lamb @ http://www.josephlamb.com/ who I use for some of my active investments. He came recommended by family.

    He's not independent http://www.josephlamb.com/page/about-us
    Tim
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

5,070Posts Today

4,551Users online

Martin's Twitter