Childrens Bonds - when to get out!

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!

AHol

All I can say is I that the two child bonds I have with Scottish Friendly have now matured. I have been paying £25 into each one for the last 10 years so was of course disappointed to find they will pay out less than I paid in!! My sons will get £2995 each - I paid in £3000 over the period so would have been much better using a building society account, premium bonds or even just a shoebox under the bed!!