What would be the best investments for my Childrens money

Tryinghardtosave

Hello, I am new to posting here.
I have 2 halifax regular savers accounts for my children ( one account each ) and I pay £20 a month into each one. This year the interest paid into them was a few pence short of £100 each. Am I correct in thinking that next year if they earn more than £100 interest they will have to pay tax on it. If that is the case, should I withdraw some money and put it into something elso for them - any ideas on what or where I should put their money. They have about £2K each and there are quite a few years left before I will want to give the money to them.
Thanks in advance for any help or advice offered.

ReportInvestor

You are unfortunately correct in your assessment of the interest situation.

Isn't it infuriating, given that students will require £30K to get them through university debt free?

One solution is to put invest some of the £2K into a stock market investment that will pay dividends lower than the interest. Ideally I would also suggest investing your monthly contributions into the stock market.

Independent - Children will love the ride on the stock market rollercoaster - Savings plans cost as little as £10 a month. And it all adds up over time

Out of the ones mentioned, my own preference is Foreign & Colonial where the minimum lump sum is £250 and the minimum monthly contribution is £25.

The article also suggests that you could set up a bare trust, thus getting around the income rules.

Foreign & Colonial will let you set up a bare trust for free