Childrens Savings for twins!

PrincessLou

My husband and i are expecting twins in June. :eek: We would like to start putting money away for the future, university, weddings, house deposits, whatever they want to do.

We want to take a look at our budget and see what disposable income we have each month and then take a percentage from that to put into a savings account for them. So it will be a different amount each month, sometimes more, sometimes less.

I was thinking 10% (so 5% each) of whatever we have leftover each month after mortgage, bills, etc? Do you think this sounds about right? Or is it too little/too much?

If anyone saves regularly for their children i would be interested to hear what strategy you use.

jimjames

We use childrens savings plans from Aberdeen and F&C to save for our children. The amounts are flexible from £25 upwards and can be varied at will with lump sum additions of £150 or more.

We weren't eligible for a Junior ISA but that could be worth using for future. Outside an ISA you are liable for any more than £100 of income that your childs savings/investments generate if it was money given by you.

http://www.fandc.com/new/IT/Default.aspx?id=78401
http://www.invtrusts.co.uk/aam.nsf/InvestmentTrusts/investchildren

It does depend if you want them to automatically have the money age 18, if you want control over when they get it then even a normal ISA would do the job and you can hand over the money when you want.

notanewuser

We get the equivalent of £88 per month in child benefit. I top it up to £100 and put it into a Halifax regular saver at 6%. When it matures each year I transfer it into her Virgin Money (was Northern Rock) childrens account at 3% (any other money she gets goes in there too). I put £20 a month into a Family Investment plan for her and my mum puts £25 per month into another regular saver for her.

jimjames

notanewuser wrote: »

I put £20 a month into a Family Investment plan for her and my mum puts £25 per month into another regular saver for her.

Personally I would avoid anything like Friendly Society investment plans as in my view they are incredibly poor value, inflexible and give poor performance overall. Once taken out your payments are fixed so you cannot start and stop and the majority of your first year or two's payments goes into paying their commission.

The examples I gave have none of those restrictions and the costs are exceptionally low.

PrincessLou

Thanks for the advice. We will be keeping the money in savings accounts in our names, not the childrens, as i want to keep control over it. There would be nothing worse than saving hard for years for their future and then them blowing it at 18 on something ridiculous. We will give it as and when the occasion arises, e.g. weddings, university, etc.

My question was more about what percentage of your income you save for your children's savings accounts (each). Like i said, i was thinking of taking a percentage out of our disposable income each month....

notanewuser

PrincessLou wrote: »

Thanks for the advice. We will be keeping the money in savings accounts in our names, not the childrens, as i want to keep control over it. There would be nothing worse than saving hard for years for their future and then them blowing it at 18 on something ridiculous. We will give it as and when the occasion arises, e.g. weddings, university, etc.

My question was more about what percentage of your income you save for your children's savings accounts (each). Like i said, i was thinking of taking a percentage out of our disposable income each month....

Doing that means you'll (most likely) end up paying tax on the interest though.

Will try and work out percentage.

notanewuser

jimjames wrote: »

Personally I would avoid anything like the Family Investment plan as in my view they are incredibly poor value, inflexible and give poor performance overall. Once taken out your payments are fixed so you cannot start and stop and the majority of your first year or two's payments goes into paying their commission.

The examples I gave have none of those restrictions and the costs are exceptionally low.

I can change my payments on my policy. Had to take something out that I could pay t he £50 government voucher into.

jimjames

notanewuser wrote: »

I can change my payments on my policy. Had to take something out that I could pay t he £50 government voucher into.

Apologies, I'd misunderstood what you had taken out. I was referring to a friendly society tax-free savings plan which has the attributes I'd mentioned.

PrincessLou wrote: »

My question was more about what percentage of your income you save for your children's savings accounts (each). Like i said, i was thinking of taking a percentage out of our disposable income each month....

In terms of percentages it is currently about 4%, I've been saving for 12 years and currently it stands at a total of just under £20k.

notanewuser

About 7% for us. 2 years in she has around £4.5k.

atush

As a mother if Twins- Congrats! and Comiserations! Due in equal measure as I know only too well.

I Used investment trust savings plans, with the children as designee. and one of three (the twins are at uni now) have graduated w/o debt. look at JISAs for those IT firms that offer them.

So it can be done lol!

I just gave away 3 packets of nappies I had stored in my loft (as I bought them in bulk from 16 weeks pregnancy when under special offer. I never paid full price for a packet lol.

If you have boys, pm me and I'll see if I have anything left that is fab (like baby levis and oshkosh!)

lvm

Regarding percentage (I have no experience of kids so only saying what I'd do).

Depending on your income, 10% of disposable income could be absolutely loads or next to nothing.

Eg if you've just £100 left over each month, you'd only have £1080 (plus interest) to give each child - might buy an old car if you're lucky.

But £1000 disposable income, you'd be putting by £100 a month and would have £10,800 each.

If I were you, I wouldn't do the whole percentage thing. I'd sit down and look at all your finances for the next 12 - 24 months (difficult though it may be) and decide what your plans are for ALL of your disposable income, including an amount to put away for kids. The amount my be smaller for the first year if you're on maternity leave but should pick up after that.

And good lunch for the arrivals :-)