Childs savings?

Mimi_Arc_en_ciel

How much are you / have you put away for your children for when they are older? And when do you plan on giving it to them?

I've started to save for my children (Should have done it years ago had i have had my wits about me! oh well, something else to learn the kids huh!)

The plan at the moment is to put £XX away until they are 16 (I figure they will have £12k ish in the end) obviously they WILL NOT be getting £12k in one go at 16 (This was the age i decided i would stop adding to their savings - not the age they would get the cash!) and I would like them to use this wisely, buy a car/go to uni etc (I realise that this might not happen, and at the end of the day it is their money to do what they want with - that said, I have been teaching the older one to be money wise so hopefully this will stick when she is older!)

What I'm unsure about is whether 12k is enough / too much. And at what age to give it to them - Should they get it in one go, or give 1/3 at XX 1/3 at XX and then the final 1/3 at another age..... (I hope that made sense!)

What are you / would you do?

atush

I saved in two ways for my kids. They each had a bank savings acct. Pocket money, bday/xmas money and a small 500 inheritance went in them. This they got at 18 when going to Uni as their spending money. I didn't let them take money out earlier, they had cash pocket money to spend.


The main way I saved was in an investment trust savings plan. It was in my name, with the kids as 'designee'. I gave them the money in tranches each year, and the balance when they had finished if there was anything left over.


You could do this in a JISA, but the funds would be theirs at age 18.


If it is enough or not will depend on what it is for. Not enough for Uni fees, but could help pay for living costs therefore reducing their loan burden. It could be a car and a flat deposit.

Kayalana99

Personally I am saving up 20k(10kea) to put towards their first house deposits.

It depends on you, I see that as the biggest help anyone can give - the right to own their own home.

notanewuser

Kayalana99 wrote: »

Personally I am saving up 20k(10kea) to put towards their first house deposits.

It depends on you, I see that as the biggest help anyone can give - the right to own their own home.

I agree with the sentiment, but £10k in 15/18 years time will probably be worth (in spending power) between £5k and £6.5k. When you add in house price increases it's not likely to go far towards a house deposit.

notanewuser

We save for DD - aged 3 she has around £5k saved in her name, plus a child trust fund. We may not be able to put so much a year away in future years (might need to pay for schooling etc) so saving as much as we can now. Interest rates are absolutely pitiful at the moment though.

Intention is for her to have the money when she's 18 - depending on what she wants it for - but will be flexible about that.

ss53

When they were young we set up stakeholder pensions funded from their child allowance - we levelled the contributions up slightly between the two of them). We kept the contributions going after the demise of the allowance. Eldest is now 20 and we plan to stop the contributions when they each reach 21. The fund will then sit there for 35 to 40 years so hopefully should be a reasonable value when they use it. Our rational was that as they are both girls it is likely that they may spend some time out of the work/pension market so this should offset that to some extent.

jimjames

notanewuser wrote: »

I agree with the sentiment, but £10k in 15/18 years time will probably be worth (in spending power) between £5k and £6.5k. When you add in house price increases it's not likely to go far towards a house deposit.

Depends if it is being invested in a form that keeps pace with inflation or not.

Hopefully if you are investing for 15/18 years in shares then it should at least beat inflation

notanewuser

jimjames wrote: »

Depends if it is being invested in a form that keeps pace with inflation or not.

Hopefully if you are investing for 15/18 years in shares then it should at least beat inflation

But there are no guarantees.

kidmugsy

Aren't kids today spoilt?

atush

notanewuser wrote: »

But there are no guarantees.

There is one guarantee- if left in cash it will shrink. Investments over 10 years (even this past 10 years) don't shrink.

jimjames

notanewuser wrote: »

But there are no guarantees.

No there aren't but even over the last 14 years we've done very well with the kids investments despite crashes and peaks. From your post mentioning interest rates I assume you are saving in cash rather than investing.

Something that is often mentioned is the risk of stock market investments and that they may drop. While that is true, for the most part if you are actually investing monthly that is what you want them to do. It might make you feel good but prices going up all the time mean you get less for your money each month.

In most circumstances we are happy when prices go down - Tesco cuts the price of food and everyone stocks up. Strangely we all think the opposite when it comes to investments. If you are a long term buyer then getting good value at lower prices is a benefit.