Saving for University/College

Ben_Nevis

Does anyone have any advice on what sort of account to open to save for my son's further education? He will be 5 soon and we want to start saving now. Also is it best to have the account in our son's name or our name as his parents?

Lokolo

lol?

He is 5, how on earth do you know he is going to uni?

Um you can just open a normal savings account in his name so you get tax free interest, upto £100 anyway. Otherwise (assuming you are a tax payer) the interest will be taxed if it is in your name.

isofa

He might come from a bright family!

Saving early is a very good idea.

Ben_Nevis

In response to Lokolo, of course we don't know at this stage if he'll go on to further education or not but it's better to have the money available if he does rather than saying "sorry, son we didn't plan ahead".

opinions4u

Halifax Children's Regular Saver pays 10% on up to £100 a month. Can open one for each parent acting as trustee for the child. If the money comes from grandparents (for example) rather than parents you can get this paid without tax deduction.

I'd then suggest reviewing it at the end of the year when it reverts to a 5.55% account and look at some sort of Investment Trust (e.g. Alliance Trust) and adding lump sums annually form the proceeds of regular saving. Bare trust nominating child as beneficiary.

fatgit

Ben_Nevis wrote: »

In response to Lokolo, of course we don't know at this stage if he'll go on to further education or not but it's better to have the money available if he does rather than saying "sorry, son we didn't plan ahead".

good on you

even if he doesn't go into further/higher education the money could be used for him to start his own business when he reaches 18.

if i ever have kids, regardless of their academic ability, i'd like to be able to help them with £££s when they enter adulthood.

briona

Ben_Nevis wrote: »

In response to Lokolo, of course we don't know at this stage if he'll go on to further education or not but it's better to have the money available if he does rather than saying "sorry, son we didn't plan ahead".

Which is fine if you only have one child but what if you have several? "Sorry son, we could only afford to save for one of you!"

On a more serious note, if he's almost 5 doesn't he have a Child Trust Fund? Are you topping that up at all? More info in the CTF link below.

http://forums.moneysavingexpert.com/showthread.html?t=30719

Ben_Nevis

Briona, we have two children (the second is 2), and the reason for starting to save now is so that we can start with small amounts each month. Both children have a CTF - I have looked at the link you provided and agree with those who have said that they want control over the money they're saving. None of us know what our children will be like at 18 and while we'd like to think that ours will be sensible, they may on the other hand take the £000's and run! Which is why we don't want to put the money into the CTF or their children's savings accounts.

briona

Ben_Nevis wrote: »

I have looked at the link you provided and agree with those who have said that they want control over the money they're saving. None of us know what our children will be like at 18 and while we'd like to think that ours will be sensible, they may on the other hand take the £000's and run! Which is why we don't want to put the money into the CTF or their children's savings accounts.

LOL. Yep, if you want to keep control of the money yourselves, then I don't suppose opening any kind of account in your children's names is a good idea. All credit to you though – you're one of the first people I've come across on these boards who actually recognises that their future 18 year old may simply take the money and run!

I assume both you and your partner/wife are already utilising your annual ISA allowances? Perhaps you could allocate any money you save/have saved in those for your children, and open high interest savings accounts for yourselves with the money you would be starting to save for your children (obviously as they would eventually get your ISA allowances, it could work out the same)...