Saving for Grandchildren.

Naforan

I want to start some savings for my grandson, almost one year old. I envisage a lump sum of £500 and a standing order of £25 pcm from my First Direct current account.
Any advice?
I am a disabled pensioner, so I doubt if I will be around by the time he hits eighteen.
So, any advice?
Thanks, in anticipation,
Naforan

THREAD NOW CLOSED. MANY THANKS FOR ALL REPLIES. EXCELLENT!

DigForVictory

Discuss the plan with the parents?

They will have to deal with the fallout in another 17 years. (I refer, of course to the family's natural grief, not to any ill-judged acts the dear lad might perpetrate.)

They also may be in a better place to open a savings account in his name that they do not save into & cannot get access to.

Update your Will being specific about the account number & name being specifically for the benefit of the fortunate young soul?

Are you prepared to let it all slide if you need the money yourself? I'm pretty sure many grandchildren would rather have years of cheerful memories of gran than a cash lump sum they are not invariably well equipped to deal with. (Heaven forbid you need care but if you do, there will be very little quarter offered by the council looking to recover monies from the estate, or you.)

Are you confident your proposed savings are not accessible by anyone other than the named beneficiary until he reaches 18? (I'm sorry, but trusting is not one of my virtues.)

woofdonkey

Please speak to the parents as the above poster says.
One of my son's grandparents pays into a trust account that I get statements for. I also pay into this so it's very easy for everyone.

Another one set up an account for my son and told me about it later, which is nice except that I can't manage it (e.g. change our address). I feel there is a chance of losing access to it.

DairyQueen

I am also not a trusting sole. My parents and I have been saving/investing for my two nephews since the eldest was born over 13 years ago.

Unfortunately, the childrens' parents are rubbish money managers so we have opted to set-up an ISA in my father's name in preference to a JISA under the control of the children's parents. My parents and I currently each pay £25p.m. into an ISA with HL. I invest the proceeds annually (saves on dealing costs).

If you are intending to save for almost two decades I would definitely recommend a stock market investment. A global tracker from Vanguard's VLS range suits us perfectly. It has performed much, much better than the child regular saver we chose for the first five years of the savings plan. We are also now minus the hassle of trying to operate a savings account in trust (only straightforward if operated by parents on behalf of their children).

Bear in mind that you may end-up with more than one grandchild and so the cost of gifting could increase exponentially with each new birth.

My dad's Will specifies the beneficiaries of the ISA and it is currently worth in excess of £10k. By the time the youngest is 18 it should be sufficient to pay for a car each and driving lessons, at the very least. Not to be sneezed at.

xylophone

I am also not a trusting sole.

Think everything's fishy unless proved otherwise?:)

xylophone

I want to start some savings for my grandson,

The parents can open a JISA for their child and you can contribute.

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

DairyQueen

xylophone wrote: »

Think everything's fishy unless proved otherwise?:)

Ooops. Another senior moment.

DairyQueen

xylophone wrote: »

The parents can open a JISA for their child and you can contribute.https://www.gov.uk/junior-individual-savings-accounts

Yes indeed, assuming that the parents can handle the responsibility, and that the OP is aware that the JISA proceeds will be available for the grandchild to unconditionally spend at the age of 18.

I shudder to think how much of my nephews' savings my sib would have 'borrowed' by now if he and his now-ex (another complication) had access to the funds.

I appreciate a JISA fits the bill for many wanting to save on behalf a child. However, contributing to a JISA over which you have zero control isn't the right option for everyone.

I also speculate that most people age 18 would be unable to resist the temptation to squander a sizeable lump sum. My parents and I haven't been saving just to provide my nephews with a month of fun followed by years of regret. I've seen that happen in my family on several occasions.

My parents and I may sound like control freaks but the gift is intended to provide something meaningful for the children when they become young adults: house deposit, car, university fees. We haver decided to control the funds in order to ensure that eventually they receive the full benefit.

xylophone

I shudder to think how much of my nephews' savings my sib would have 'borrowed' by now if he and his now-ex (another complication) had access to the funds.

The adult has no access to the money in the JISA.

He controls it to the extent that he can decide whether cash/stocks and shares etc. but cannot remove money from the account.

The child could control (but not access) the funds in the account from age 16 - only the child can access the funds at age 18.