Best investment for a child ?

trickytrolleys

I have a 5 year old daughter and although she has a £100 in premium bonds I really would like to start saving for her future. I dont want to be able to have instant access (because I'd spend it) and after reading about the premium bonds i would like something that gives a bit of a better return - Im considering starting a pension for her but I dont know much about childrens ones but then i think maybe it would be more useful if she could access the money earlier - or perhaps both ?

If anybody has any experiences / advice I would be extremely greatful :beer:

dunstonh

unit trusts or investment trusts are probably the most flexible and allow decisions like switch to pension/ISA to be made at a later date.

trickytrolleys

thank you dunston, do you know where i would be able to access some more info on these please ?

save-a-lot

Hi

Consider opening a counter based account too, to encourage your daughter to save. Get this ethos engrained early and you will have a savvy kid. Our daughter has a Save4it account with the Halifax and she loves filling her piggy bank up and banking it

dunstonh

savings accounts run the risk of inflation eating away any real value.

4.8% is the current rate of RPI so you have to beat that just to stand still in real terms. Anything less than that and the money is going down in real terms. Savings accounts historically do not keep up with inflation. Although it has possible in recent years to just beat it.

Time is factor that needs taking into account and sticking £1000 away today for it just to have the same spending power, possibly less, in 15 or so years time doesnt appeal to me.

I use Unit Trusts for my two children.

thank you dunston, do you know where i would be able to access some more info on these please ?

Check Hargreaves Lansdown's site. They are generally regarded as one of the cheapest although their contribution levels may not be low enough to suit a child investment. There are alternatives if that is the case.

save-a-lot

Savings accounts that are accessible to children are still valid - they add a bit of reality to things, it is something a child sees on the high street, they experience counter staff, they handle their own money. To me this is an important element for children to see, rather than having it all managed by a parent or guardian. A mix of both is sensible.

gil13

dunstonh - just wondered what UT's you went for for your children, did you go for a speculative play early on or have you spread over a few funds?

dunstonh

I am typically a medium/high risk investor. However, with the children i went medium risk. Whilst the higher risk funds offer greater potential, I just felt with the children's money that I wanted a steady eddie fund with more typical stockmarket performance around the 10-15% a year mark on average.

The eldest could do with a fund redirection to another fund now so thanks for the prompt.