New Baby - Need savings account advice please

jimjames

chile_paul wrote: »

Just my personal perspective on this having done similar for our newborn 3 years ago who is growing up too rapidly.

We decided to set up an Investment account when she first arrived on the scene - however we made a mistake of not fully understanding the fee's when we established a Child Investment Plan with F&C. With a flat £25 a year fee and additional charges for each deposit which were taking a considerable chunk out of deposits at Christmas and Birthday pressies the charges were wiping out any gains. As a result we're now moving into either a JISA or even using some of our own ISA pot for a fund which we will give to our little one when she is all grown up.

We also considered a separate savings account; on reflection though we've decided to hold off on this until she is older (7 or 8?) and then involve her in the account opening process, going down to the branch to open it etc as part of educating her about how to manage money sensibly.

F&C were very competitive but since they introduced their new charges they are not for smaller sums.

There are still lots of other companies offering similar schemes for very low cost so don't let that put you off using this type of route. If you are happy with investment for such a timescale then I wouldn't go to cash just because one company has introduced higher costs.

chile_paul

jimjames wrote: »

F&C were very competitive but since they introduced their new charges they are not for smaller sums.

There are still lots of other companies offering similar schemes for very low cost so don't let that put you off using this type of route. If you are happy with investment for such a timescale then I wouldn't go to cash just because one company has introduced higher costs.

Don't worry I'm definitely not looking to move the investments into cash - I'm considering opening a S&S JISA with Cavendish Online or using either mine or my OH's ISA contribution with iweb (it doesn't appear to be possible to open a JISA with the iweb platform?) and then invest in a passive fund - either one of the Vanguard Life Strategy funds which have an 80-100% equity mix or a FTSE tracker fund.

The obvious downside of using our own ISA is that it will use up some of our own contributions, however we're not likely to get anywhere near the 31,200 combined savings per annum so this shouldn't be an issue. There is also no way to transfer the invested sum automatically into our daughter's own ISA when she turns 18.

Presumably if the total sum of the investment when she turns 18 is less than £15,600 (or whatever the limit is in 2029) then she will just be able to put it back into her own ISA at this point? If it's any more than this then the portion above £15,600 will have to be subject to tax for at least one year?

xylophone

If you are not proposing to put the money into a JISA but to save in an ISA of your own and give the money when the child turns 18, the child will be able to deposit your gift in an account of her own - if the ISA is still available, she'll be able to subscribe up to the limit if she wishes and put the rest into another account on which she may or may not be taxable.

As the money would be yours, you might choose simply to give her enough for a full ISA subscription in 2029 and hold the rest over in your own account to gift in other tax years.

And see https://www.gov.uk/inheritance-tax/gifts

ptrichardson

The reason I'm not answering some of the questions is because I don't really know - I know almost nothing about investments outside of standard cash ISAs

I was thinking a stocks and shares ISA type product, though.
Guess I'll have to do some reading of my own.

xylophone

http://www.halifax.co.uk/investments/our-investment-products/junior-stocks-shares-isa/

http://www.halifax.co.uk/investments/our-investment-products/junior-stocks-shares-isa/

http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/

You might consider hedging your bets, half stocks and shares half cash.

https://www.gov.uk/junior-individual-savings-accounts/overview

ptrichardson

Like the look of that Scottish Widow's fund via Halifax.

I'm comfortable with a higher risk / longer term type investment. Can look to diversify / lower risk at a suitable time after 15 years.

Also seems the Halifax savings account will be our best bet for a "normal savings account", we have a branch in our town which helps.

Thanks for the help.

jimjames

ptrichardson wrote: »

Like the look of that Scottish Widow's fund via Halifax.

I'm comfortable with a higher risk / longer term type investment. Can look to diversify / lower risk at a suitable time after 15 years.

Also seems the Halifax savings account will be our best bet for a "normal savings account", we have a branch in our town which helps.

Thanks for the help.

Surprisingly for a bank product it does look ok although just investing in the UK but charges are only 0.5% which is fairly good.