Child Savings

tpearce28

Hi, I have 3 children, two of whom got child trust funds, having been born between 2001 and 2011. They have junior savings accounts, but are all reaching, or have reached, the £10K threshold, after which as I understand it interest falls to basically 0%. So I now need to switch accounts. I think for the older one (born 2000) a junior ISA is probably the thing - but what sort of product should I be looking at for the other two? I want to put in small amounts each month (£10 - £20), with the occasional bigger amount when Gran wins on the bingo

jimjames

Which product drops to 0% at £10k?

It might be too late now but S&S funds would probably give better returns long term.

elwy

I am in the same situation with both of my children being born in the CTF doldrums.


I'm hanging on to a rumour that they will be eligible for Junior ISAs from 6th April this year. I haven't investigated it much yet but if it's true I'll be transferring their CTFs into a S&S junior ISA as soon as I can!

sterlingstash

Lloyds and Halifax child saver accounts both give 3% interest up to £20k if I recall correctly.

xylophone

There is no reason why all three children shouldn't have a JISA?
They can be set up so that a regular amount is paid in each month, or amounts paid in as and when etc.

You just need to bear in mind the annual subscription limit.

Some draft guidance to JISA managers here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/416075/bulletin64-JISA-CTFdraftGN.pdf


Subscriptions following a CTF to JISA transfer

25A.7.1 The annual subscription limits for a CTF are based on the child’s birth year while JISA subscriptions are based on tax years.

Where a CTF is transferred to a JISA, the CTF provider does not need to pass any subscription details to the JISA manager. Once the transfer has been made, the child can access the full JISA
subscription limit for the tax year of transfer regardless of any subscriptions made to the CTF.

For example, the child’s birthday is 1 October so his CTF subscription year runs from 1 October to the following 30 September. The subscription limits for both a CTF and a JISA are £4080 and the CTF is transferred to a JISA on 1 December 2015.

Subscriptions of up to £4080 could be made to the CTF between 1 October 2015 and 30 November 2015. Once the account has been transferred to a JISA,subscriptions of up to £4080 can be made between 1 December 2015 and 5 April 2016. The JISA manager only has to report subscriptions he has received (after 1
December 2015).

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

tpearce28

Thanks all.


(1) At the moment they have children's savings accounts with Virgin, which as I understand it have a 3% or so rate until you've put £10K in, and then they drop I think to the standard rate for their savings accounts, which is about 0% at the moment. At least I think that's what they said...


(2) I only looked very quickly on a comparison website, and the Junior ISA info there said that they were only available to children who were not eligible for child trust funds. Would that only be for those specific ISAs?


(3) Sorry, I clearly need to spend a little more time on this. What's "S&S"?

Eco_Miser

2) Junior ISAs are not available to children eligible for CTFs. However this is changing in April, see post 5 from xylophone.

3) S&S = Stocks and Shares - also includes Gilts, Corporate bonds, and funds (collective investments) of the same.

xylophone

The Child Saver from Virgin appears to pay 2% - the savings limit appears to be £10,000.

http://uk.virginmoney.com/savings/find/results/childrens-accounts/

There are others with a much higher limit.

http://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-childrens-accounts.html

Parents should be aware of the "£100 rule" if interest of over £100 is being earned on money they have given to their child outside tax privileged accounts like CTF/JISA.

See "Things you might like to know" http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

It should be possible to transfer CTF to JISA from April 6 - details to be announced.