Saving for grandchild

bertiewhite

I would like to start saving regularly for my 10 month old grandson so that he has a cash sum when he is 18. I'm only thinking about putting £20 or so away each month so even that will be a few grand by the time he's old enough.

What's the best way to do it - regular savings account such as an ISA or an endowment-type savings scheme?

redmalc

I opened a S&S isa for mine and went into aggressive funds given the time schedule.
Thats me, but you may wish to go into more conservative funds

MyOnlyPost

An S&S ISA will probably give greater returns over 17 years but carries some risk to capital. You may also need a minimum contribution of £25 pcm

Junior cash ISAS's are currently paying around 3% and carry no risk to your capital.

Both are locked away until age 18 and both will be the property of the child. I appreciate the sentiment, we are saving for all 3 of our children in CTF or JISA, but take it from someone who has already trodden the path, it can be daunting thinking about what the children will do with the money once they get it and you will have no say over it. Obviously when we set up these accounts we have no idea how our kids will turn out and none of us fear the worst but in hindsight I fear at least one of my children will waste the money given. If I was to do it again I would open the account in my name so that I could decide whether to give it as a lump sum or a monthly allowance at 18.

BLB53

I am looking at a designated investment account with Bailiie Gifford for my grandchildren - the big advantage is I keep it in my name and can wait until they are older, maybe 21. Also there are no fees for the admin and its very flexible.

xylophone

If the parents were to open a JISA for the child, you could contribute your £20 a month.

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

The Coventry might suit.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

Be_Happy

I went for slow and 'hopefully' steady for my grandson. Opened an M&G FTSE Tracker Regular Savings Scheme in my name, designated for him, which I hope to hand over to him when he is 21 in 14 years time.

Opened it in April 2013 with £1220 from other savings. Have invested £30 a month in its savings scheme since then (£1350) - total £2570 and it is now valued at £3115, so happy enough.

Reaper

If you are using a "designated" account as suggested above so you can control whether or not to actually hand over the money when the time comes remember it may not be as tax efficient because the income it earns is counted as YOUR money for tax purposes rather than the child's.

Of course you could just stick it in your own ISA (if you have not used up your annual allowance) and gift it when they reach 18 if you feel like it, though if you plan to do that perhaps you should mention it in your will just in case.

BLB53

If you are using a "designated" account as suggested above so you can control whether or not to actually hand over the money when the time comes remember it may not be as tax efficient because the income it earns is counted as YOUR money for tax purposes rather than the child's.

Is it the case now that we can receive £5,000 of investment income tax-free?

xylophone

Is it the case now that we can receive £5,000 of investment income tax-free?

https://www.gov.uk/tax-on-dividends/how-dividends-are-taxed

https://www.gov.uk/government/publications/personal-savings-allowance-factsheet/personal-savings-allowance

DiggerUK

Each year, on their birthdays, our grandkids get a sovereign..._

https://atkinsonsbullion.com/gold/gold-coins/sovereign-gold-coins

grey_gym_sock

DiggerUK wrote: »

Each year, on their birthdays, our grandkids get a sovereign..._

https://atkinsonsbullion.com/gold/gold-coins/sovereign-gold-coins

why not give them something they'd really appreciate? - http://www.waitrose.com/shop/ProductView-10317-10001-229465-Milk+chocolate+coins

(or alternatively, give them a proper investment, like a S&S JISA.)