Long Term Child Savings

scaredofdebt

I'm looking to open a savings account for my 2 year old son, the idea is he will get the money when he is financially competent, so around age 18-50

I want to open it with a mimimal deposit and then drip feed money into it, plus ad hoc payments such as birthday moeny, so ideally it should allow deposits whenever for whatever amounth.

I'm thinking someone based on the stock market as over that timeframe it should hopefully outperform the bank interest rates.

Something that reduces any tax liability and ideally I can control when he gets his hands on the money.

Thanks for any suggestions.

MallyGirl

S&S Junior ISA. It will become his at 18 though

jimjames

I'd definitely use investments and not a savings account for that sort of timescale. Junior ISA would make sense but they automatically get the money at 18

IanSt

I personally would definitely invest into a S&S ISA - but would keep it in my name.

You can then up the contributions if other children should come along and when the money is needed you can divide out its value at whatever times you think best.

AnotherJoe

As long as you arent maxing out your ISA allowance, then save into your ISA for him, investing as appropriate, discussed many times in this forum.

You can segregate "his" investment by only buying a particular fund or ETF etc so its clear which is yours and which is "his".

I'm doing this for a grandchild and the will mentions the segregated fund.

As said above issue with a child ISA is the money becomes theirs age 18 irrespective of how suitable. I caught a snippet of a radio programme at lunchtime yesterday, teenager gone completely awol, drugs violence theft, if god forbid such a thing happened to yours or mine even in a far less extreme way, you have no ability to stop that and a large sum could even be counterproductive.

p.s. great point about if you have subsequent children you can pool the money and dont end up with kids getting completely different amounts just because one was a little late to the investing game.

cloud_dog

As always, I would recommend doing both. An investment in to the child's own S&S JISA with money going in to your/OH S&S investment account or ISA (depending on circumstances).

xylophone

The child's birthday money is his - you might use the cash JISA.

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

With money you wish to give eventually, you can do as suggested above.

If you are really thinking of 50+, you might open a pension for him.

https://www.legalandgeneral.com/pensions-retirement/stakeholder-pensions/stakeholder-pension-for-children/

Eco_Miser

scaredofdebt wrote: »

plus ad hoc payments such as birthday moeny,

If I received money for birthdays/christmas, I'd be rather disappointed if it disappeared until I was 18, no matter how useful it would be then. I'd be wanting to pool it and buy something immediately useful, like a book or computer.

xylophone

If I received money for birthdays/christmas, I'd be rather disappointed if it disappeared until I was 18,

It could be split between the JISA and an ordinary easy access child account.

https://moneyfacts.co.uk/savings/childrens-savings-accounts/

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

MallyGirl

When my DD was small all money gifts went into an account as she did not understand money. This was also where the grandparents put something for her as a start in life.
Now she gets any birthday money direct to her to spend as she likes.
She has a secret account and a JISA - she knows she has something but has no idea how much is in it. She will be 16 soon so we will be going to open a HTB ISA to take some of the money from a junior account she is now too old for, when she turns 18 we will tell her about the rest.

louloubelle79

Hi my kids have a S&S JISA with Vanguard, would you recommend me getting my own in my name then to drip feed £100 in a month.?