Savings/ISA for Children

sarahw89

I have recently had a baby and would like to start saving for him and was just wondering if it was better to open an ISA or a saving account.
Also what do you need to take with you when you open an account/

angeelu

I'm in the same situation and am wodering this too... just looking into it myself. I want to be able to access the money in case we need to buy things for him, but equally have somewhere to put money given to him by friends and family and some we want to put aside for him ourselves.

xylophone

First of all see http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916
and http://www.hmrc.gov.uk/tdsi/children.htm

The "£100 rule" does not apply to the JISA - see http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/ISAsandJuniorISAs/DG_199672
http://www.halifax.co.uk/savings/accounts/branch-accounts/#juniorcashisa might be of interest.

Except in the JISA and other tax exempt savings, it is easier to keep money given by parents separate from that given by other people.

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

You can also open any other account which will accept "re" (bare trust)
status,. http://www.moneysupermarket.com/savings/

headcoat

I have looked at a young savers account at http://www.shepherdsfriendly.co.uk/shepherds-young-saver-plan.aspx and have been considering this.

At the moment I just set up saving accounts in my own name (but then tax is paid), at the time I was getting 3.5% interest now its dropped to 0.5% so I am looking around for something else.

Has anyone else used the Sheppherds one? Will my money be safe there i.e. if they go bust?

Thanks

xylophone

This article might be of interest. http://www.guardian.co.uk/money/2009/may/02/scottish-friendly-tax-free-investment

From previous posts, you seem to be trying to save for your grandchildren-did you never actually set up savings accounts for them/contribute to their CTFs/JISAs?

Even saving in your own accounts you should be able to do better than 0.5% whether in your own ISA or other accounts.

jackyann

I am interested in this as well, and have followed a number of posts over the last year or so.

My understanding is that you need to decide on the following basis:

An ordinary savings account ( and there are some good ones) will effectively be tax-free until your child begins earning above the threshold (for most, not until 18).
Junior ISAs are always tax-free. So when your child gets to 18, if they don't want / need to take the money, the tax-free element continues. Very useful if they want to wait to use it for say, a house deposit; but no difference if they take it out at 18 to spend on tuition fees / a car / a long holiday.

You do need to check out all the details about the conditions attached to each, but that is the broad difference.

headcoat

I gave up trying to find one, so just set up 5 accounts with Santander and named then all with the childrens names. I got an initial 3.5% but dropped to 0.5% now and I was paying tax. This was not a great concern though as I only have about £100 in each account now but since they dropped the interest I have started looking again.

I think I have settled on Northern Rock Little Rock account linky/, which seems to do what I want.

I can open each one in there own name but I have control of it, pays 3% and as they will be in their name tax won't be paid as long as I fill the tax form in.

I also have access to the money should I ever need to dip into it in emergencies.

I am only aiming to save £1000 each so interest will not be brilliant but every bit helps.

This account looks ideal to me, unless I am missing something, the only drawback is the max amount I can save is £10K (I wish)

headcoat

xylophone wrote: »

This article might be of interest. http://www.guardian.co.uk/money/2009/may/02/scottish-friendly-tax-free-investment

From previous posts, you seem to be trying to save for your grandchildren-did you never actually set up savings accounts for them/contribute to their CTFs/JISAs?

Even saving in your own accounts you should be able to do better than 0.5% whether in your own ISA or other accounts.

See above post I didn't add to their CTFs/JISAs as I wanted this to be separate from any other payments and will be seen as a gift from Grandad!

xylophone

think I have settled on Northern Rock Little Rock account linky/, which seems to do what I want.

I can open each one in there own name but I have control of it, pays 3% and as they will be in their name tax won't be paid as long as I fill the tax form in.

I also have access to the money should I ever need to dip into it in emergencies.

I'm sorry but no, you don't, unless the money is to be given to the child/used for him.
If you put the money into Little Rock accounts and fill in the R85, the money is an absolute gift to the grandchildren - it is only tax free on this basis.
It is not a way for you to save tax free! Indeed, if you set out on this course, it would be tax evasion.

If you want to save tax free, use your ISA allowance.

headcoat

xylophone wrote: »

[/B]
I'm sorry but no, you don't, unless the money is to be given to the child/used for him.
If you put the money into Little Rock accounts and fill in the R85, the money is an absolute gift to the grandchildren - it is only tax free on this basis.
It is not a way for you to save tax free! Indeed, if you set out on this course, it would be tax evasion.

If you want to save tax free, use your ISA allowance.

I didn't think of is that way, I was told that in the branch, I guess they meant I could withdraw the money for the children.

I have an ISA for my own savings!

xylophone

I have an ISA for

my own savings!

Exactly so!