Saving for my grandchildren

Juliajoules

I have a 4 month old granddaughter and would like to start saving now for something really meaningful. I was thinking I would put away £1 week for the first year, £2 a week for the 2nd year £3 a week for the 3rd etc . Anyone got any advice one where to put this money and what to do with it?

sheilavw

I opened an account at the Halifax for my Grandson in January 2017 with £50 and I put £10 a month away for him.

Biggles

Using savings accounts is pretty pointless these days, as the money will be worth less when she's 18 than when you put it in.

Something like a Junior Stocks & Shares ISA is what you need, one with low charges, esp if you're starting a £1pw.

Pollycat

https://www.moneysavingexpert.com/savings/

chesky

Biggles wrote: »

Something like a Junior Stocks & Shares ISA is what you need, one with low charges, esp if you're starting a £1pw.

Grandparents cannot officially open these, you will have to get the parent to sign and authorise all the paperwork.

DairyQueen

I assume that you are looking to save until she is 18? If so, that kind of timescale strongly suggests a stock market investment - something like the Vanguard LifeStrategy funds, or Blackrock equivalent, will do the trick (cheap, well-diversified, automatically rebalanced) . The issue that may apply here is the small sums invested. Dealing charges are low/zero on many platforms but there is usually a minimum investment required to keep platform and dealing charges low. Would it be possible for you to, say, invest a £100 lump sum each year rather than £1/£2 per week? This may make the stock market investment a viable option.

The other issues to consider:
- Are you likely to have more grandchildren? If so, you may need to plan for similar savings for any new addition.
- How good are the baby's parents with money? As a JISA is under the control of the parents until the child turns 18 the parents will have complete freedom to access the funds prior to that point.

My parents and I have been saving for my nephews (now age 12 and 10) since the eldest was born. We began by popping £150 p.a. between us into a child's savings account (with me as trustee). This increased to £300p.a. when nephew number 2 came along.

The administration was so onerous, and the returns so pathetic, that eventually we did the smart thing and transferred the cash into an S&S ISA. Unfortunately the children's parents are not great with money and my parents and I decided to keep the ISA under our control. Their investments are currently held in my dad's name. We have been adding £600p.a. since 2014 and it's now a pretty decent sum.

If you prefer the cash savings route then a child's regular saver a/c will give the best rate. The Halifax usually tops the interest rate league on these accounts but you need to invest a minimum of £10 per month and (warning) these accounts are a complete pain to administer if you are not the parent (been there, done that).