Childrens accounts

ambercelery

Hi all

I set up a halifax regular saver account for both of my young children a few years ago, where i pay in £100 each month - where it earns 6% (tax free in their name) and then is transferred to a Halifax Save4It account (paying 1% interest).

I am now questioning whether I am foolish to bother trying to save for my children altogether, as with interest rates being what they are, the money in their account is worth less each year.
What do you fellow parents do to save for your children?

Am i better ensuring that my ISA limits are full each year, plus investing in funds etc in my own name rather than trying to save in my childrens names

Reaper

My baby has no savings accounts, all his money is invested in his own name and held in trust.

However using your own unused ISA allowance (if any) is another good option.

Annisele

How old are your children?

If they are say, five or six, then you might want to consider stock market investments. If they are 16 and you think they might need the money at 18, you're probably stuck with cash.

You might be tempted to invest in your own name anyway - that gives you flexibility if you decide that you want to use the money for something else, but you could still choose to gift the money to your children at a later date. However, the choice of whose name to use depends on all sorts of things (including tax and benefits), and I don't think it's possible to say that one choice is definitely right for everybody.

System

It seems to me there are two different unconnected aspects to children's savings accounts.

1) where the child takes control of the account, and is encouraged in the virtues of thrift, planning ahead, managing money, deciding priorities, learning about the need to balance gratification now against future aims, etc etc.
2) where the parent wants to keep control of a growing nest egg, and then hand it over when the child reaches say 18.

Interest rates don't matter much in the first case, because achieving a return is not the point of the exercise. In the second case, it is simply a matter of planning the most effective saving medium. If there are tax or interest breaks for children, fine, then use them. If not, there is no particular point in thinking in terms of the children's savings at all, it is just a part of the family's overall saving strategy.

kidmugsy

Eyes open for the T&C's of the promised new Index-Linked Savings Certificates, that's what I'd do.

wearside_2

My Grandchildren aged 4 and 6 have both inherited £11000 from their Great Grandmother, and I am the Trustee charged with looking after their inheritence. I am at a complete loss what to do with the money. Under the terms of the will they can ask for financial help for school trips, computers etc, so I cannot really inverst in Stocks and Shares, nor tie the money up. I tried to deposit the cheques in their Halifax Save4it account today just to clear them but they were refused due to the £5,000 limit.

Does anyone have any suggestions what to do with the money? I was thinking of paying the cheques into my account to clear them, then purchasing Premium Bonds until the Index Linked Savings Bonds are issued, hoping that they can be purchased for children.

jennifernil

Northern Rock's Little Rock account pays 3%, so better than the Save4it.

Halifax do have a fixed term account that is open to children, the Guaranteed Reserve

jimjames

wearside wrote: »

My Grandchildren aged 4 and 6 have both inherited £11000 from their Great Grandmother, and I am the Trustee charged with looking after their inheritence. I am at a complete loss what to do with the money. Under the terms of the will they can ask for financial help for school trips, computers etc, so I cannot really inverst in Stocks and Shares, nor tie the money up. I tried to deposit the cheques in their Halifax Save4it account today just to clear them but they were refused due to the £5,000 limit.

Does anyone have any suggestions what to do with the money? I was thinking of paying the cheques into my account to clear them, then purchasing Premium Bonds until the Index Linked Savings Bonds are issued, hoping that they can be purchased for children.

In theory there is no reason why it all has to be in the same product. School trips are unlikely to be more than a couple of thousand so you could keep that in a savings account and then consider share based investment for some of the rest. Long term that should beat savings and give them a good head start for university or first car (more like first insurance at the moment )

The schemes I use are with Aberdeen and F&C

Speculator

ambercelery wrote: »

Hi all

I set up a halifax regular saver account for both of my young children a few years ago, where i pay in £100 each month - where it earns 6% (tax free in their name) and then is transferred to a Halifax Save4It account (paying 1% interest).

Have they recently changed the t&cs for this account.

On their website it now says...

After 12 months, your Children's Regular Saver Account, including the balance and interest, will mature into an easy access savings account on anniversary of our receipt of your opening deposit for your Children's Regular Saver Account. Your sort code and account number will remain the same and your standing order will continue into your easy access savings account unless you choose to stop it.