New Born Savings - Options

Gurj247

Recently my wife gave birth to a wonderful baby girl, our first and its fantastic, even enjoying the sleepless nights and dirty nappies.


That said I am now thinking about my new daughters future, but unsure of how to move this forward.


I know that I want to start a savings account for her own money (she's saving already thanks to money and gifts from family that visit her) so that money will go into a child account that her mum will control.


We are fortunate enough to be able to put additional savings to one side for her too, circa £100/month, but I don't know whats the best product to put that money into.


Ideally I want to I guess set up an account that her mother and I control, but our daughter cannot access until she is 21, or put caveats around what it can be spent on such as University etc


Any advise on what's the best way of doing something like the above?


What have other parents on here done with regard to saving for their childs future?


Thanks.

eskbanker

I'd go for a junior ISA and in particular a stocks and shares version to recognise the likelihood of greater long-term growth than cash-based saving.

Gurj247

eskbanker wrote: »

I'd go for a junior ISA and in particular a stocks and shares version to recognise the likelihood of greater long-term growth than cash-based saving.

Something to look into more, but I think once my daughter turns 18 the money becomes hers and I would have no control over it?


I'm simply worried that she may in 18 years just go and blow the money that's been saved because she can.


Are there no products that allow some further control?

talexuser

The only disadvantage of a junior isa is the child has full access at 18, so if it is a substantial sum you no longer have any say in how it is spent. Have you any unused isa allowances? For my grandchildren mum had unused isa allowance so we all agreed she would keep the money in her name for 16 years or more to make sure it is used for uni/first car/flat etc. The only disadvantage of this method is the capital counts as mums in the event of needing any benefits, but in our case that is not really a possibility. I agree a stockmarket funds investment is the best route for this timescale, we went for a global investment trust, you'll have to balance reputation/performance against minimum investment levels, or just save up to the minimum and then invest regularly.

jimjames

talexuser wrote: »

we went for a global investment trust, you'll have to balance reputation/performance against minimum investment levels, or just save up to the minimum and then invest regularly.

Many investment trusts have schemes that allow you to invest from £30-£50 per month so there shouldn't be much waiting to invest for most people.

Gurj247

talexuser wrote: »

The only disadvantage of a junior isa is the child has full access at 18, so if it is a substantial sum you no longer have any say in how it is spent. Have you any unused isa allowances? For my grandchildren mum had unused isa allowance so we all agreed she would keep the money in her name for 16 years or more to make sure it is used for uni/first car/flat etc. The only disadvantage of this method is the capital counts as mums in the event of needing any benefits, but in our case that is not really a possibility. I agree a stockmarket funds investment is the best route for this timescale, we went for a global investment trust, you'll have to balance reputation/performance against minimum investment levels, or just save up to the minimum and then invest regularly.

Thanks Talexuser - that's my main concern that they end up blowing the lot.


Unused ISA allowance is something I have not considered to be honest, so will think about that one.


Never thought about a stock market fund investment, any advise, recommendations?

jimjames wrote: »

Many investment trusts have schemes that allow you to invest from £30-£50 per month so there shouldn't be much waiting to invest for most people.

Thanks JimJames - do you have any recommendations / experience of going this route?

skid112

I have just become a grandfather and I was also looking to do something for my grandson. Like you concerned at access at age 18 whilst I wanted something a little more long term, so I opened a SIPP for him. His parents have gone the route of the JISA and he can happily spend that or not should he inherit the thrifty outlook

eskbanker

skid112 wrote: »

I have just become a grandfather and I was also looking to do something for my grandson. Like you concerned at access at age 18 whilst I wanted something a little more long term, so I opened a SIPP for him. His parents have gone the route of the JISA and he can happily spend that or not should he inherit the thrifty outlook

That's not a little more long term, that's a full 37 years later before he can access the money (at 55)!

skid112

eskbanker wrote: »

That's not a little more long term, that's a full 37 years later before he can access the money (at 55)!

57 actually

eskbanker

skid112 wrote: »

57 actually

True, under currently-known rule changes, but who knows how many more might apply by 2073?! Still seems something of an overreaction to delay access by a further 39 years in order for someone not to have direct control of money at 18 though, but your money, your right to decide....

talexuser

Gurj247 wrote: »

any advise, recommendations?

Not allowed to give specific funds here since not a financial adviser. Safest route might be a low cost global index tracking fund, through a low cost isa platform. Alternatively an investment trust is a company that is quoted as a share price, and cheapest route can be to go to the trust company direct rather than through an intermediary which takes another level of fees. Sites like Trustnet or Morningstar list top performers, important to look for long term performance and dividend payments rather than the latest top of the table, which might have got there through short term luck.