Kids savings

melly1980

atush wrote: »

Well it is your children's money. But I invest in equities with my kids money and over 10 years it has done better than cash. And given I invest monthly has bought more duringpoor spells and later that means the funds really jump up.

But the link I gave you will be the best of all CTFs including cash.

And given inflation last year was more than 5% you lost and would have lost even more at 4%.

It depends how selective you are with your start and end periods for equities. I could quite easily produce a graph that shows a 10 year stretch where equities have gone nowhere. Thats all very well if your selling during up periods etc but this is going to sit there. Im not yet convinced with the equities route for my childrens savings

melly1980

atush wrote: »

And given inflation last year was more than 5% you lost and would have lost even more at 4%.

But its in an account at 1%, therefore it already has lost 4%. I understand the issues regarding equities but im not after that, this is a basic cash question.

Cash at 1% or cash at 5%? Simples.

Im only asking it because I didnt know if there was anything inherently special about CTF's that mean I had to keep the money in there.

melly1980

xylophone wrote: »

http://www.hmrc.gov.uk/tdsi/example5.htm
Interest could end up being taxed at parent's highest rate.

thats all very well but surely interest at 5% being taxed at 20% of the 5% drops the interest gained by 1% so that you end up with 4%.

That is still better than leaving it at 1% but untaxed....or am I missing something?

Also....this term "gift" keeps cropping up. I wont be putting a lump sum in here, it is literally going to be £20 - 30 per month for the next 14 years. How does this fit in with the tax side of it?

xylophone

You do seem to be receiving an extraordinarily low rate of interest on the CTF - you could get 3% from the Yorkshire? Since the fund cannot be accessed until your child is 18, even if you are adding no more to it, it would be an idea to move it?

atush

melly1980 wrote: »

It depends how selective you are with your start and end periods for equities. I could quite easily produce a graph that shows a 10 year stretch where equities have gone nowhere. Thats all very well if your selling during up periods etc but this is going to sit there. Im not yet convinced with the equities route for my childrens savings

Not really. Most 10 yr graphs showing equities against Cash dont' include the dividends. And all use the ftse 100/250 which is all UK. I invest in global equties for my kids (incl UK but not all).

So, if you insist on cash only for your CTF you are stuck with what they will give you. And I can guarantee equtites will do better over ten yrs than 1% a year if that is the best a CTF will do (but I would check that link I gave you to see as someone has to be doing better than that?).

So dont invest further, and invest outside in regular savers, fixed rate bonds and NSI ILSCs when they are available.

melly1980

xylophone wrote: »

You do seem to be receiving an extraordinarily low rate of interest on the CTF - you could get 3% from the Yorkshire? Since the fund cannot be accessed until your child is 18, even if you are adding no more to it, it would be an idea to move it?

ive tried looking around for CTF's that are still in existence but they dont seem to be there to open?

melly1980

atush wrote: »

Not really. Most 10 yr graphs showing equities against Cash dont' include the dividends. And all use the ftse 100/250 which is all UK. I invest in global equties for my kids (incl UK but not all).

So, if you insist on cash only for your CTF you are stuck with what they will give you. And I can guarantee equtites will do better over ten yrs than 1% a year if that is the best a CTF will do (but I would check that link I gave you to see as someone has to be doing better than that?).

So dont invest further, and invest outside in regular savers, fixed rate bonds and NSI ILSCs when they are available.

I understand that, but we arent talking about 1% are we. Ive found 5%. The 1% account will be a dead duck within a month, all that I have to decide is where the account will be shifted to and if it will all be shifted or leave the CTF as is and create a new account.
either which way I'd prefer a safe 5% than a less safe gamble that may generate more.

xylophone

http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers - see bottom of article re Yorkshire offering.

melly1980

cheers for the help guys

atush

Ive found 5%

But that wasn't a CTF? Anyway, good luck with the yorkshire.