Saving for children outside of CTF

AMum41

We have saved small, regular amount for first child and now starting with second in Halifax savings which ends after a year. At year end, we have been investing lump sum in Stakeholder Ctf or national savings childrens bonds. The latter are save but on low rate and the former will theoretically bear fruit by time kids are 18 but really nobody knows. What is best advice? Put money at end of year into alternative better paying bond ie Scottish Friendly? Put into 5 year fixed savings ie Yorkshire Bank? Take risk with Ctf? S*d it and go on holiday? Buy gold coins? Much appreciate feedback.

dunstonh

Put money at end of year into alternative better paying bond ie Scottish Friendly?

Expensive and low quality.

Take risk with Ctf?

Best option really.

In real terms, cash based CTFs will just about retain their current value. Given the small amounts involved and the long term, you may as well do something that at least has the potential for real growth.

atush

If you are saving for a period of over 10 years, much less 18, then you should really look into equities for the money saved afor the first 10+ years. It will do much better over time than cash and should at least do better than inflation over the long term.

But rather than put in lump sums, although you could, I would invest monthly into the equties (either via a junior ISa, CTF or in investment trust savings plan). This way you reduce risk and smooth volatile markets as when prices are falling your monthly payment buys more units/shares.

For the matured funds from the RS, you could invest in an index linked savings or a junior ISA.

xylophone

http://www.direct.gov.uk/en/MoneyTax...es/DG_10014128

http://www.hmrc.gov.uk/tdsi/children.htm

http://www.moneysavingexpert.com/savings/child-savings-tax-free?utm_source=forum&utm_medium=clicks&utm_campaign=resourcebar