Child Savings

sgx.saint

Hello!

Myself and my partner are expecting our first child in January 2010, and I am currently researching what savings/investments we could pursue in order to ensure our child gets a good start in life.

I've considered the CTF, but after reading a lot of stories, this is a bit of a risky investment for us at present.

Due to having outstanding debts, and currently being part of a debt management plan, I would want to ensure that any money saved/invested for my child would be protected and safe from my creditors.

Secondly, I would prefer to retain control of any money invested until they reach a set age.

Can anyone recommend any accounts or investments that would fit the above bill?

Appreciate your suggestions!

opinions4u

sgx.saint wrote: »

Myself and my partner are expecting our first child in January 2010, and I am currently researching what savings/investments we could pursue in order to ensure our child gets a good start in life.

Excellent idea.

I've considered the CTF, but after reading a lot of stories, this is a bit of a risky investment for us at present.

A CTF is a tax wrapper for a savings account or an investment fund. The only risk in a savings account is that the provider goes bust and the FSCS doesn't pay out. Very unlikely.

The risks of an investment fund depend on the underlying assets invested in. Therefore it is possible to have a high risk fund and equally possible to have a low risk fund.

Over 18 years you should expect an investment fund to outperform a cash savings account.

Here's a link to an MSE article on it which also highlights a 3% cash rate.

Due to having outstanding debts, and currently being part of a debt management plan, I would want to ensure that any money saved/invested for my child would be protected and safe from my creditors.

Secondly, I would prefer to retain control of any money invested until they reach a set age.

Opening an account with you and/or your partner named as trustee for the child should achieve this. You retain control of the funds and are required to use the money on behalf of the child. But the money is not yours, it is legally the child's.

Can anyone recommend any accounts or investments that would fit the above bill?

As a starting point Halifax Kids Regular Saver will pay 6% fixed for a year. At the end of the year you should then review your options.

ses6jwg

If you do not want risk then opt for a cash CTF like we have.

It's also a good idea I think to open 1 or 2 other accounts alongside the CTF as the money in the CTF is legally the child's and you have no control over access when they turn 18.

sgx.saint

opinions4u wrote: »

Excellent idea.

A CTF is a tax wrapper for a savings account or an investment fund. The only risk in a savings account is that the provider goes bust and the FSCS doesn't pay out. Very unlikely.

The risks of an investment fund depend on the underlying assets invested in. Therefore it is possible to have a high risk fund and equally possible to have a low risk fund.

Over 18 years you should expect an investment fund to outperform a cash savings account.

Here's a link to an MSE article on it which also highlights a 3% cash rate.

Opening an account with you and/or your partner named as trustee for the child should achieve this. You retain control of the funds and are required to use the money on behalf of the child. But the money is not yours, it is legally the child's.

As a starting point Halifax Kids Regular Saver will pay 6% fixed for a year. At the end of the year you should then review your options.

Hi Opinions4u.

You mentioning open an account as a named trustee, firstly, how would I go about doing this, and secondly, as a named trustee, I take it the money in the account is legally my childs, but I am trusted to look after it, hence protecting the funds from my creditors?

I like the look of the Halifax Kids Saver, depositing a little each month is the plan.

Am I also able to make lump sum deposits? Or do you think they would be better invested elsewhere?

Thank You

opinions4u

sgx.saint wrote: »

You mentioning open an account as a named trustee, firstly, how would I go about doing this

ID for you and birth certificate for the child. Halifax certainly allow it and I'm sure others do too.

as a named trustee, I take it the money in the account is legally my childs, but I am trusted to look after it, hence protecting the funds from my creditors?

Correct.

I like the look of the Halifax Kids Saver, depositing a little each month is the plan.

Am I also able to make lump sum deposits? Or do you think they would be better invested elsewhere?

You can vary the amount of the standing order between £10 and £100 a month, but you cannot make ad-hoc deposits in to the Kids Regular Saver.

sgx.saint

Thanks Opinions4u, most helpful!

carebear71

Hi I was thinking of putting my baby's voucher in Engage mutual stakeholder, what do people think? My daughter has hers in Legal and General tracker trust which seems to be doing well but don't want to put all my eggs in one basket. Any advice would be appreciated thanks.

DiggerUK

[QUOTE sgx.saint
"Due to having outstanding debts, and currently being part of a debt management plan, I would want to ensure that any money saved/invested for my child would be protected and safe from my creditors."
[/QUOTE]

If you are on a plane with your child, and the oxygen masks come down, you put the mask on yourself before your child.
To be of any financial use to your child you need to see to your finances first.
Get rid of your debts, then attend to your child's needs.

Only way to put money by for your child without the creditors knowing is to buy gold, as it is off the radar.
Strongly suggest you clear your debts instead, and avoid a repeat.

All the best to you and yours.