Advice re long term savings.

Craig_Grant

Hi

My wife and I are due our first child in February and would like to put a small amount away each month to eventually pay for his/her first car when they're 17.
The sum I'm thinking of at the moment is £15 a month.

Can anyone tell me the best place to pay this money in for the next 17 years please and am I likely to accrue much interest over that duration or do I really need to increase the amount we'll save monthly to have enough for a decent enough first car?

Thank you

Craig

CLAPTON

a savings account with the best interest rate you can find
make sure you review it each year as the rate will probably drop to 0.1% after a year or so

historically interest rate have bearly kept pace with inflation

£15 x 12 = 180 per annum
£180 x 17 = £3,060
so that will buy her a motor altough it may not pay the insurance as well

Reaper

I always favour investments rather than savings over the long term, however the minumum amounts for child oriented plans tend to be around £25pm. Shame you will miss out of the ending of the Child Trust Funds by a month.

Craig_Grant

Thanks Reaper, the £25 mark is fine for us to do and if it benefits our family in the long run we'd definitely put that amount away each month.

Would there be a significantly better return and what would you suggest I look in to?

Reaper

There is plenty of choice out there but here are a couple I often use as examples of child investment accounts:

Baille Gifford (I used them)
F&C (well respected and longest running of all investment companies)

Another option would be to open a Stocks & Shares ISA in your own name then withdraw it and gift it whenever you decide to.