NS&I Children's Bonus Bonds

fullscott

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Back to the original post...

I am hopping mad - for 9 years I have been buying NS&I's CBB's for my grandchildren, trying to ensure they have something to help when they need a car/go to Uni/buy a house/get married ... ie when they are adults. (CBB's earn tax-free interest until the age of 21.)

My daughter has just phoned me to say that the latest maturing bonds (they have 5-year terms) are accompanied by information that the Terms & Conditions are changing on 20 September - the most important of which (to me) is that the Bonds will finish at AGE 16.

16? They'll have to remain in full-time education until 18. Won't be old enough to buy a car. Hopefully they won't even be thinking about getting married. But I'm sure a 16-year old will be able to think of many ways to spend a large sum of money!

There is no mention of this on NS&I's website. I have 'phoned to complain - it was "a ministerial decision".

Surely this is "mis-selling"? (Yes, I am aware that each Bond has a 5-year term, but they have been advertised as "re-investible" until age 21yrs.)

What IS going on? My grandchildren don't qualify for Junior ISAs (born 2003-2007). Not everyone trusts Stocks & Shares - some of us prefer Hard Cash!

Sorry. Just had to get this off my chest!:mad:

snowcat53

fullscott wrote: »

My grandchildren don't qualify for Junior ISAs (born 2003-2007).

Not everyone trusts Stocks & Shares - some of us prefer Hard Cash!

Your grandchildren would be eligible for the Child Trust Fund and you can contribute to that. Quote from gov.uk website

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Who is entitled to a CTF account?


Your child is entitled to an account if all of the following apply:

• your child was born between 1 September 2002 and 2 January 2011
• you were paid Child Benefit for that child for at least one day before 4 January 2011
• your child lives in the UK
• your child is not subject to any immigration restriction

---

Secondly, while I understand your fears re shares, I would challenge you on the wisdom of sticking solely to hard cash or cash savings accounts. These are subject to the risk of falling behind inflation. What rate are you getting on the NSI bonds?*

With the timescale investing in a good share based fund is likely to do much better, at least for some of the savings - by all means have a mix. Look at F&C (non stakeholder account) they have very low charges and a good range of funds - including the very solid F&C Investment Trust. My son's CTF is with them.

* Just looked it up - latest issue = 2.5%. Less than inflation (3.2% july). I rest my case!

fullscott

Hi snowcat

(Sorry, I can't work out how to quote from your message)

Yes, the children have CTF's (with F&C). My daughter makes regular payments into them. She informs me that their current value is LESS than what has been paid in. We only have another 9 years before the eldest child is 18.

My intention is to provide them with "found money". Beating inflation is not always the priority - having a safe lump sum guaranteed is more important.

Thank you for your reply.

xylophone

What happened to the children's CTF vouchers? Were accounts opened for them?

Would it be possible to encash the maturing bonds and reinvest in these accounts?
http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

That said, the rates on the Cash CTFs are not brilliant.

At all events though, the money becomes available to the child at age 18.

xylophone

Yes, the children have CTF's (with F&C).

It would be possible to transfer the shares CTF to cash.
However, over the longer term shares can be the better option.
Any units bought now benefit from pound cost averaging?

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/ChildTrustFund/AnintroductiontotheChildTrustFund/DG_193690
"Managing the account
The CTF account will be in your child's name, but the person who opens the account is responsible for managing it. They are called the 'registered contact'.
The registered contact is the person who:
should keep all the paperwork
reports certain changes of circumstances - for example change of address
is the only one who can change the account or provider
Your child becomes the registered contact and takes over the account when they are 16.
The registered contact can change to a different type of CTF account or to a different provider at any time."

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/ChildTrustFund/WhentheChildTrustFundisupandrunning/DG_193644
"From 1 November 2011, parents, family and friends can add money to the account up to a total limit of £3,600 a year."

Orednol

Your trouble starts when you try getting your money back out the people in charge of them haven't got a clue what they're doing

xylophone

Your trouble starts when you try getting your money back out the people in charge of them haven't got a clue what they're doing

Perhaps you can explain/justify this assertion?