Saving For Children's University Ed

ALC

Hi

I'm trying to work out the best way to save for my children's university education and I'm having difficulty deciding the best way to go. The children are 7 and 5 years old. They currently have CTFs but I want to open accounts which I have control of when the time comes, ie. when they are 18. I'll stop paying into the CTFs once I open the new accounts.

I'm not a risk taker so I'm looking for a safe option - one which I know will accrue at a steady rate but will give me a decent return.

I'm utterly baffled so any thoughts would be much appreciated.

xylophone

See http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10014128 - a useful read. The CTF is a tax free account whoever provides the money but there are special rules relating to gifts from parents which are explained here.

If an account is opened in a child's name the money becomes the child's absolutely and he or she achieves control of it by virtue of reaching the age of majority (18).

You may therefore simply consider just saving in your own and/or your wife's name as you would for any other long term project?
You say that you want a safe option with a decent return - don't we all! Returns on cash are not great at the moment and inflation erodes buying power. I should think that you would probably need to aim at setting aside about £500 a month. Presumably you would just choose the highest paying accounts you could find. You would both use your cash Isa allowances as far as possible I assume.

You could choose to use your stocks and share ISA allowance if you were prepared to take more risk in the hope of a better return - or perhaps one of you could save in cash and one in stocks and shares?

ALC

Thanks for taking the time to reply. I'll look into the ISAs. I'd wondered about the Young Savers Accounts but they don't seem to offer quite what I'm after.