Use your child - best child savings account

Mrs_Doe

Hi all. I hope someone can help! I'm in a similar situation to JustJewels! I finished work when I had twins & as such I am also a zero rated tax payer. My husband is also on the higher rate. I've opened a deposit account for the children in my name & I have a standing order set up from our joint account. Will tax have to be paid if over £100 interest is earned? Although the account is in my name, the money can't actually come from me as I don't bring in an income (apart from child benefit). I'm quite depressed that the stakeholder CTF I've set up for the children is showing a loss so far & want to do my best for them (as we all do!). Thanks

cartertucker

I would appreciate some advice on the following post, as I dont know where else to ask?


Hi, I opened my son a child trust fund account with 'The Childrens Mutual' I pay in £10 per month & used the initial voucher he got from the goverment.

The most recent statement I recieved stated that on april 07 his account was worth £461.79 & on April 08 it was worth £546.04 so taking into account that I have paid in £120 , his account has made a loss!

Have a made a bad mistake here? Shall I move his money?

They say they buy into shares & that this can go up & down, but im not sure I want to take that chance now.

I hope you can help.
Many Thanks,
Kelly.

DCT_2

Pennywise wrote: »

A relative's will leaves £10,000 to my son (aged 6) which is to be made available to him on his 18th birthday.

We're in a similar situation. Our son has been left £5000, and whilst the will states that he should not receive it until he is 18, the executors have entrusted it us to avoid any ongoing obligations. There is no requirement to lock this into one place until he's 18 - we can move it if required. But we are keen to respect the relative's wishes, and I'm keen to keep it in his name.

I had planned to do a phased move into his existing CTF over the next four and a bit years. But it's a stakeholder CTF, and the current performance is dismal - like Kelly's a few posts back it's losing value at the moment - so I am now considering waiting a year or two to start doing that.

So I'd like some kind of fixed rate children's bond for a year or two, but they don't seem that common, so far only the YBS Treasure Bond seems to fit the bill. Has anyone come across anything similar elsewhere?

Froggitt

Why just look at childrens bonds? You can get upto 7% fixed for a couple of years or so at the best building society accounts, or Icesave or ICICI.

Froggitt

And fill in an R85 form and get it paid tax free.

Make sure you keep the records of whom it comes from, and dont mix your gifts to your ids in the same account to avoid any possible problems with HMRC in the future.

martinman3

DCT wrote: »

We're in a similar situation. Our son has been left £5000, and whilst the will states that he should not receive it until he is 18, the executors have entrusted it us to avoid any ongoing obligations. There is no requirement to lock this into one place until he's 18 - we can move it if required. But we are keen to respect the relative's wishes, and I'm keen to keep it in his name.

I had planned to do a phased move into his existing CTF over the next four and a bit years. But it's a stakeholder CTF, and the current performance is dismal - like Kelly's a few posts back it's losing value at the moment - so I am now considering waiting a year or two to start doing that.

So I'd like some kind of fixed rate children's bond for a year or two, but they don't seem that common, so far only the YBS Treasure Bond seems to fit the bill. Has anyone come across anything similar elsewhere?

The Chorley Building Society has a Foxley Trust Fund account which is intended for children who are too old to have a CTF but could also be used if they already have a stakeholder CTF. http://chorleybs.co.uk/index.php?option=com_content&task=view&id=112&Itemid=30
It works the same way as a CTF so you can only save up to £1200 each year.

Froggitt wrote: »

Why just look at childrens bonds? You can get upto 7% fixed for a couple of years or so at the best building society accounts, or Icesave or ICICI.

Two 7.0% fixed rate bonds that I knew of which allowed accounts to be held in trust have recently been closed to new applications. The Skipton BS has 1,2 and 3 year 7.0% fixed rate bonds which according to their terms and conditions don't prevent a under-18 yr old opening them with an adult operating it. You could ring them to check this, a special application form would be needed. http://www.skipton.co.uk/savings_and_investments/bonds/fixedRateBonds.aspx
Just make sure that the child is the first named on the account, but not a joint account otherwise you won't get all the interest gross, and fill in a R85.

baby_boomer

The final day for the Skipton bonds is Saturday, a little bird told me.

Froggitt wrote: »

Why just look at childrens bonds? You can get upto 7% fixed for a couple of years or so at the best building society accounts, or Icesave or ICICI.

Most of my "children's" account money is also in "adult" accounts.

The only use of children's accounts is for £100 bagging IMHO, if you're that way inclined.

In days of yore, the societies used to offer better rates for children than for adults, but that is sadly in the past .

martinman3

baby_boomer wrote: »

The final day for the Skipton bonds is Saturday, a little bird told me.

Yes, it seems that they are dropping the rate on all three by 0.25% to 6.75% from 21/07/08 as I just found this http://forums.moneysavingexpert.com/showthread.html?t=1039449

elizadoolittle_3

I apologise if a similar point has been covered here...saving is a bit of a novel concept to me. I have a young son and want to put money aside for his future (hopefully he may get to uni one day!) - planning to save my child benefit monthly so about £70 and have a Halifax Regular Saver account.

As account will go over the £100 interest limit reasonably quickly and I am a higher rate taxpayer am I better off using an ISA in my name to save the rest? Knowing what I was like as a teenager I think that by the time he's over 16 I'd like to have some control over where the money goes.

Thank you for your help!

Froggitt

Both you and Mr Doolittle (apologies for assumption being made) can each give your child about two grand each (at 5% interest.....beware the compounding though) before he gets to the £100 interest. So thats five years before you need to start worrying about the taxman.

However, I agree if youre not already using your annual ISA allowance, use that for your savings account for the little one.

Once youve run out of ISA allowance, then do the kids account......if youre worried he'll spend it before he gets to University, The Harpenden BS kids account has no withdrawals until age 18.