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childrens mutual

Hi guys wondering if you can help?
A few years ago I set up a childrens mutual bond thingy for my daughter at £10 per month and Ive noticed that nothing seems to ever increase with it...I have been considering withdrawing the funds from it and entering them into a bank account for her.

The policy pays minimum of £2000 when she hits 18 but Im presuming this is going to be pennies by the time she gets to 18.

Also I have another baby on the way and would like them to have equal savings so now seems to be the right time to do this if Im ever going to :)

Comments

  • dunstonh
    dunstonh Posts: 118,562 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Ive noticed that nothing seems to ever increase with it.

    It wouldnt do. It has front loaded charges (i.e. expensive compared to alterantives) and you are investing over a period where the market has dropped. Although the latter is a good thing as you will be buying more units at a much cheaper price and over the long term it will be these units that make the most money.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh wrote: »
    It wouldnt do. It has front loaded charges (i.e. expensive compared to alterantives) and you are investing over a period where the market has dropped. Although the latter is a good thing as you will be buying more units at a much cheaper price and over the long term it will be these units that make the most money.

    So do you think I should look at a high savings childrens bank account? are all of these baby bonds similiar then? I did notice they charge admin charges etc etc
  • dunstonh
    dunstonh Posts: 118,562 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    So do you think I should look at a high savings childrens bank account?

    I havent with my children. I dont see the point of getting 1% at a bank when inflation is 3%. The savings option is just guaranteeing a real terms loss. The investment option gives you greater long term potential for growth but will zig zag in the short term. The recent market drops are good news for those paying long term into investment contracts (like childrens investments and pensions).
    are all of these baby bonds similiar then?

    If you buy the endowment type version then yes. I prefer unit trusts in designation to the child.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh wrote: »
    I havent with my children. I dont see the point of getting 1% at a bank when inflation is 3%. The savings option is just guaranteeing a real terms loss. The investment option gives you greater long term potential for growth but will zig zag in the short term. The recent market drops are good news for those paying long term into investment contracts (like childrens investments and pensions).



    If you buy the endowment type version then yes. I prefer unit trusts in designation to the child.

    Can you suggest anything that I should be looking at? Thanks again
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