Kids savings - not CTF

yimpster

Both my kids were born between 2002-2011. I have been saving for them both since they were born. Savings wise i think they have more than I do

The CTF account only has the original amount paid in by the government.

The rest has been moved around and now just about to mature from a 2 year post office bond.

Seeing as i still can't create a Junior ISA for them, does anyone have any ideas of where to invest next? The rates are still low and i am worrried if i tie in for 2-3 yrs to get a better rate i might get caught out.

Cheers in advance

Adam

atush

Why cash? Why not equities?

yimpster

atush wrote: »

Why cash? Why not equities?

Sorry - i'm not sure what you mean

xylophone

And if saving money provided by you and in the children's own names, (outside tax privileged accounts like CTF)have you been careful of the £100 rule? http://www.hmrc.gov.uk/helpsheets/r85-helpsheet.PDF
http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

Sorry - i'm not sure what you mean

Using stock market based investments rather than cash.

yimpster

xylophone wrote: »

And if saving money provided by you and in the children's own names, (outside tax privileged accounts like CTF)have you been careful of the £100 rule? http://www.hmrc.gov.uk/helpsheets/r85-helpsheet.PDF
http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/


Using stock market based investments rather than cash.

The regular money saved by us is only the child benefit which we split between the two-we have not been able to add to this. Everything else has been gifted by family and friends over the years for birth and birthdays. So hopefully i'm ok on that £100 rule.


Stock market based investments are very new to me but sound more risky. Could you please guide me in the right direction?


Thanks for taking the time to reply - really appreciated.

puk999

yimpster wrote: »

Seeing as i still can't create a Junior ISA for them

I'm in the same position. At least we'll be able to convert the CTFs into junior ISAs in April 2015.

yimpster

puk999 wrote: »

I'm in the same position. At least we'll be able to convert the CTFs into junior ISAs in April 2015.

I'm looking forward to it, but it will take a few years to get all the funds into ISA's due to the limits per year.


Until then what's best? I really want to make the money work for my kids.

Reaper

yimpster wrote: »

Stock market based investments are very new to me but sound more risky. Could you please guide me in the right direction?

CTFs can be placed into savings type accounts or stock market funds. Unlike the savings accounts the stock market ones will go both up and down. However the hope is that over the long term (and since this is a CTF it is for the long term) you ought to do better on the stock market.

If you go that route you can either choose which funds to invest in (ie you pick a manager who adds it to his pool and invests the whole lot widely to diversify and reduce risk), or you can go for a tracker which just copies an index such as the UK's FTSE.

You can go for a "stakeholder" version in which case the charges are fixed at 1.5%pa, or a non-stakeholder which can charge more or less. Typically all stakeholder versions are simple trackers.

To use an example F&C (who I use) offer both and will accept transfers in. Note that they recently introduced a £30pa charge for the non-stakeholder version so that would not be a good idea for your very small CTF. However if you plan to add the post office savings into it up to the maximum £3720pa then the £30 rapidly becomes irrelevant compared to the fund performance. More info here:
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

They have certainly done well for my child. At this rate as soon as he gets the money I'll be coming cap in hand begging him for a loan!

Junior ISAs offer a greater choice of investments for lower charges so I'll be switching April 2015, as I imagine will everybody else.

xylophone

The regular money saved by us is only the child benefit which we split between the two-we have not been able to add to this. Everything else has been gifted by family and friends over the years for birth and birthdays. So hopefully i'm ok on that £100 rule.

Maybe, maybe not - at all events, if the money is not going into tax privileged accounts, it is wise to keep money given by parents separate from that given by others. http://www.hmrc.gov.uk/manuals/saimmanual/SAIM2430.htm

jimjames

yimpster wrote: »

Stock market based investments are very new to me but sound more risky. Could you please guide me in the right direction?


Thanks for taking the time to reply - really appreciated.

Another one similar to the F&C already posted is Aberdeen which works out cheaper than F&C for smaller amounts

http://www.invtrusts.co.uk/aam.nsf/InvestmentTrusts/investchildren

In terms of risk the money you put in can go up and down but if the share price does go down that also means that new money you put in each month will buy more than last month.

Investing is one of the only areas where we worry about this if we are long term buyers. If we went to the supermarket and the price of bread was less than last week, we'd be happy and might stock up with more loaves. If it happens to a share there is the temptation to sell rather than buy!