Savings for a new arrival

ruddoug09

Hi all

Our little miracle arrived a couple of week ago and the lucky wee man already has about £600 to invest in a good savings account.

From my research there are very few accounts available and I can't help but be disappointed with them. Either a junior ISA or bonds seem the only realistic possibilities.

Can anyone reading this please recommend the best of the above or an alternative (ignoring investment savings) where the money is tied up. We don't need access but will be wanting to make regular monthly deposits into his account.

Any help would be greatly appreciated!
Thanks!!!

jimjames

Firstly congratulations! If you are saving for when your child is 18+ is there a reason why you aren't looking at investment savings? It may be worth considering over such a long timescale.

We use F&C and Aberdeen. Both are very flexible, low charges and no lock in unlike most so called tax-free savings plans.

xylophone

http://www.hmrc.gov.uk/tdsi/children.htm First see this about children and tax. Also http://www.hmrc.gov.uk/individuals/savings-income.htm
The "£100" (per parent) rule does not apply to the Junior ISA.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10013916
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/ISAsandJuniorISAs/DG_199672

As you will see from the above, you can invest in stocks and shares, cash or both within a junior isa.

If you or your wife have an isa with Halifax it might be worth looking
at this http://www.lovemoney.com/news/savings-investments-pensions/isas/15106/best-junior-isas

http://www.myeggnest.com/info/junior-isa-comparison.aspx
http://www.hl.co.uk/investment-services/junior-isa

If you want to open a children's account, the Northern Rock option might be of interest, http://www.northernrock.co.uk/savings/Find/Results/Childrens-Accounts?utm_source=Google&utm_medium=CPC&utm_campaign=brandsav&gclid=COLknqO20K8CFaYJtAodpy5BIA

It is easier for tax purposes to fund taxable accounts from money given by people other than parents.

ruddoug09

Thanks people, really appreciate it! Actually even finding the time to do research is a struggle so the links you've supplied xylophone are brilliant and much needed!

opinions4u

I agree with the view that you really should look at investing over 18 years.

The links above provide some good starting points, but don't let your fear of a stock market crash allow your bundle of nappy expenses to miss out on the booms that will inevitably occur during his childhood.

pqrdef

If money's been given to the baby, I suppose you should put it in his name. But if you're saving your own money, you might want to keep it in your own names. You'll have more control over it later.

ruddoug09

Its his money so we'll be saving it in his name and I think we're also going to look at the investment accounts as well given the above comments. I'm an accountant so have an aversion to risk, I'd never forgive myself if his savings dropped significantly just before he turned 18! We'll definitely be locking the money away til his 18th birthday, we won't be needing access to it. thanks again for the advice.

opinions4u

ruddoug09 wrote: »

I'd never forgive myself if his savings dropped significantly just before he turned 18! We'll definitely be locking the money away til his 18th birthday, we won't be needing access to it. thanks again for the advice.

Move to lower risk / cash funds when he's 13 or 14.

ruddoug09

Yeah thats what I was thinking. WIll probably combine 50/50 investment and a junior isa having looked into it a bit more.

atush

I agree that over 18 years I would be investing rather than saving in cash, and investments trust are my preferred vehicle.

jimjames

atush wrote: »

I agree that over 18 years I would be investing rather than saving in cash, and investments trust are my preferred vehicle.

With the implementation of RDR for advisers I can see that investment trusts will become a much bigger player over the next 18 years which should be beneficial for them and give a wider knowledge of their features.