Fairest way of saving for kids!

MadMat

I have two children, one aged 13.5 and one aged 10

Up till now I've not put any cash away for them, as I thought getting the family debt free was more important.

Now I'm looking to put some cash away for them to provide a small lump sum on their 18th birthdays to go towards a first car or similar "start of adult life" expense.

And now I'm stuck with deciding the fairest way to split the cash I have to save each month. assuming £100 a month to save;

Do I split it £50 each every month, giving oldest son approx £ 2700 plus interest on his 18th Birthday and younger one around £4800 plus interest.

Or do I split it £65 per month to older child and £35 per month to younger child's account in order that they both get approx the same amount (around £3500) on their 18th Birthdays ?

Mat

zzzLazyDaisy

With option two, you then have the dilemma that the same amount of money won't be worth as much by the time the younger reaches 18yrs, due to inflation.....

atush

I'd split it evenly. you can either stop paying in to both accts when the first one carry's on, or stop.

And I'd probably invest it in an investment trust savings plan, as you have 5-8 years to go. But hey, that is just me.

Does either have a CTF? Or a JISA?

MadMat

zzzLazyDaisy wrote: »

With option two, you then have the dilemma that the same amount of money won't be worth as much by the time the younger reaches 18yrs, due to inflation.....

Yes, but he would have had the interest compounding for 8 years rather than the 4.5 years worth for his brother!

I hadn't appreciated just what a moral maze this would be when I decided to do this, as I feel it's important that both of them are not only treated equally, but both feel they've been treated fairly!

Mat

MadMat

atush wrote: »

I'd split it evenly. you can either stop paying in to both accts when the first one carry's on, or stop.

And I'd probably invest it in an investment trust savings plan, as you have 5-8 years to go. But hey, that is just me.

Does either have a CTF? Or a JISA?

Youngest has a CTF, which I'm currently chasing details of as we've not really kept any check on it since opening a few months after he was born.
Oldest has a cash JISA paying 3% which I opened with £1 about 30 mins ago

If I like the look of the CTF - it's with Barclays Bank I remember that much, I'll make addition contributions to that for youngest.

I felt a cash JISA was best route for oldest with only 4 1/2 years to go till his 18th Birthday.

Mat

xylophone

JISA for the older child? https://www.gov.uk/junior-individual-savings-accounts/overview

If you have/are prepared to open your own ISA with Halifax 6% relationship rate currently available for child. http://www.halifax.co.uk/isas/

Perhaps add to the younger one's CTF - the government is currently consulting on allowing transfer to JISA.

Remember that if a parent saves for a child outside tax privileged accounts like CTF/JISA, the £100 rule must be borne in mind. See http://bank.virginmoney.com/savings/learn/childrens-accounts/

opinions4u

You save the same amount for each.

When the older child hits 18 you hand him the cash, but carry on saving for both.

When the younger child gets to 18 you give him his full pot and you give the older child his second pot.

bigfreddiel

i'd do a bill gates - let them make out for themselves

anything else will only end up in arguements and resentment

fj

grey_gym_sock

bigfreddiel wrote: »

i'd do a bill gates

i'd do a king lear

wifeforlife

I understand your dilemma, I've been in the same. Both my kids aged 9 & 3 currently have CTF's, I couldn't afford to save for the eldest but 2 years ago was then able to start saving for them. I pay £20 a month into the eldests account and £10 a month into the youngest, after 7 years I'll either raise them both to £20 dependant on finances. I also moved their trust funds to a shares one as it was a longer investment. Iro of payout, I know I've paid the same amount in.

Goodluck with whatever you decide

atush

bigfreddiel wrote: »

i'd do a bill gates - let them make out for themselves

anything else will only end up in arguements and resentment

fj

Actually his kids are getting something, abt $1M to pay for all their education etc. Small beans to Gates though.

But this was ages ago i read that, maybe he has decided since to leave them with nowt?