Use your child - best child savings account

hugh1940

wrote: »

My child has just turned 2 years old. She now has almost £3000 in cash savings. Most in a Halifax child account and around £800 in Nationwide.
Each parent has a control of one account.
After reading the section of your article about being taxed after £100 interest i want to know what the best option is for us to avoid the tax.
I pay £50 per month into the Halifax account and the rest has been made up from birthdays etc...

A few questions...

Should i get a grandparent to open an account to avoid the tax ?

Is it ok for me to direct debit into this account without paying the tax on interest over £100.

Is there a limit on how much can be paid to a child in one year ?

Thankyou,
Tom.

Beware Britannia Childrens Accounts as a grandparent who has been saving with the Britannia for many years I was disgusted that they cut interest rates on children,s accounts from 4.35% to 0.25% get your grandchildrens money out they just do not care

BarnsleyWJ

I am hoping someone will have an opinion on a family problem! For more than 5 years, my parents have been saving £10 each month into two separate Bonds for my daughter (who is nearly 10). One is the Scottish Friendly Childrens Bond and the other is the Tunbridge Wells Equitable Youngster Bond. At the moment, they are both performing badly. If my parents decide to close the Bonds and reinvest the money elsewhere, hefty penalties (£200 in one case) will mean that they will receive less than the money already paid in.

My Dad thinks they should just take the hit, get out now and invest the money in, for instance, a child's Regular Saver account; I take a longer term view and feel that, over time, these investments will pick up and that it would be a shame to lose out on actual contributions made, by leaving now. A third option is to have the Bonds made paid up, similar to when an endowment policy is suspended; in this case, no further bonuses will accrue, apparently, but I assume that there will be no penalties when my daughter eventually cashes in the Bonds when she is 18 (or older).

Has anyone out there got any advice on this subject? Thanks!

ruthd23

No specific advice re the bonds issue, I'm just posting to say I've been looking for a better deal for my 13-year old since her Nationwide rate went down to 0.75% and the Halifax Save4it is just over 1%. Most of the child regular saver accounts don't let you pay in large amounts/month so limiting the profit you can make in a year, but I've been in to a LloydsTSB branch today to ask about their under-19 accounts and have been assured there's no upper limit on them paying 2.5% (current deal) so if you transfer money in and fill in an R85 they should get this on whatever the full balance is.
They divide kids into 11-15 and then 16-19 with different facilities (eg ATM card for the older group), so presume they're hoping to hang onto customers as they become students or young adult earners, but if it carries on being a reasonable current account why not?

Have an appointment to do the account opening admin later this week, will post again if any flaws become apparent.

Ruth

lizclassic54

just opened a Loloyds TSB account for my 11 year old. Had to supply ID for both but it looks to have everything. I intend to open the Halifax account and transfer via BACS from the bank to Halifax. Hope it will work! thanks for the tip

mooch

My baby son's 10% halifax child regular savers have just matured, so the funds have been transferred to his save4it account, now earning 1.05%

Since it is 'his' money, do you think HMRC would have any problem with me transferring all the funds (4 maxed regular savers, so about £4.5k) to my own savings account earning 3.15% gross (R85 no tax)? The main reason being the better rate of interest.

Might this be seen as me just using my child's tax allowance for my own savings?

DaveTheHedgehog

Hello just a quick question.

You are allowed as parent to put in enough money so that it only generates £100 of interest.
However, what happens when interest rates go up. Do you then have to take money out again?

Thanks

dunamis

Soon to have our 4th child and I need to sort out the savings accounts. I'd really like to manage them online from a single interface (like the Egg Money Manager)....any recommendations?

ragingbass

In terms of online access, I like using the Halifax products. If you open the Halifax regular saver (6%), they also open a Save4it account (1.05%).

It's different from Egg Money in that, you'd need to be signed up to these products to see them all from the one interface. But, they're pretty good products and it works for me.

emmaegardner

My husband and I would like to open some form of savings account for our new son. We intend to invest around £50 a month, but we do not want our son to have access to this money until he is at least 21, preferably 22. However, we would like be able to access the savings earlier on our son's behalf if, for example, our son turns out to be some fantastic sportsman. Everything that I have found so far seems to give the child access once they are legally an adult, i.e. 18, or 55 (stakeholder pension. There must be something in between! I am hoping that someone out there can point us in the right direction.

I apologise if someone has already answered my question somewhere. There is so much information on here to take in!

Froggitt

Maybe an account in the childs name, but you are the only signatory.