Childrens' savings

Jockois

Having just added to our family I'm looking for advice anyone can give me about where I can put money away for them when they're older. I opened the CTF for my son (who knows how that's going to pan out?!) and have a savings account for him. However, at the end of the year this gets transferred to an account with next to no interest. I'm not sure about the junior ISA for my daughter, however, as the rates are atrocious. Anyone found any good places to stash the cash for their kids or would I be better just putting the money into a norma, adultl account for them with a bit better interest?

IanWaring

I have three grandchildren. Two of them don't have CTFs, so have Junior ISAs opened with SIPPdeal (0.3% charges, £12.50/qtr custody charges and investments in an index tracker called "Vanguard LifeStrategy 100% Equity Fund A Acc". The Acc just means any dividends from the underlying stocks get added to the total invested, so the snowball grows faster.

There are versions for 80%, 60%, 40% and 20% stocks (with the balances in bonds) you may elect to buy instead, with lower risks but lower historical interest rates (even though long term, even including stock market crashes, index trackers outperform almost everything else long term: you can win by betting on all the horses). You can drop lump sums in there, or register for £25+/month regular savings. Direct debit taken on the 1st of each month, any cash in the account on the 10th used to buy units in the tracker - with no trading charges.

The other son has a CTF and is hence currently forbidden from opening a Junior ISA (which replaced CTFs in 2011). With no new customers, providers have started to charge excessively and offer poor interest rates, so like all 2-10 year olds with CTFs, they are in savings prison.

Complained to my MP last night, who agreed that the restriction stopping CTFs being converted/moved into a Junior ISA was not good - and has promised to talk to the Chancellor about this. Waiting with bated breath!