Saving for my babies future.

ChopperST

cherabelle wrote: »

Thanks ChopperST.

I am exactly trying to avoid shiny plastic and ensure he has some help when it comes towards buying his first home. With Stocks and Bonds would I look to speak to an FA? I have a few simple stocks with Hargreaves Lansdown but I have absolutely no idea what I am doing with them or how to make them work for me. (I currently hold £10 in M&B because the 20% Shareholder discount outweighs my initial outlay) as well as some stocks in National Express, again about £10.

Yes, I worried about the inflation over 18 years. We have always used them for about 12-24 months at a time, our wedding, loft conversion etc and have won around £2k in that time which we were happy with. Longer term I'm not sure it would work as well.

The deposit on a property would be alongside our savings, I possibly didn't explain it too well. What I actually meant was just bung it in with ours to increase what we would already have.

Re a SIPP, am I right in thinking they cannot access that until they are 55? I think that may be a little long term for what I am thinking, I'm hoping it could be more for buying a house.

Sorry for so many questions.

For a small amount it would make much more sense taking a DIY approach. Again for a small amount a fund of funds like Vanguard lifestrategy would be a sensible place to start. The fund will auto balance for you and has variations of 100% - 20% equities allowing you to dial down the risk.

SIPP cannot be accessed till 10 years below the state pension age so currently 55, rising to 58 over the next few years. A SIPP does not hit your brief of having access at aged 18.

Albermarle

have a joint income of just over £82k per annum with myself a higher rate tax earner.

Just to go off topic slightly . From a family finance point of view the most obvious investment is for a higher rate taxpayer to pay enough in a pension to pay less/no 40% income tax.
So if you are not already doing that, then it should be a priority over other alternatives. . You can always give some of it back to the children when you are 55, but you will not get such a good deal with any other type of investment.

atush

A jisa for the baby is good idea.

An even better idea is to pay more into your pension so as to bring you out of HRT

cloud_dog

Op, for 18 years you need exposure to equities. Whilst I appreciate some may not be comfortable with the increased risk associated with equities there have been a number of links posted which, hopefully, will help you in the process.

As with anything in life, it is rarely black and white. I think you need to be considering a number of options, which you may choose to do from the outset, or may choose to do in a planned approach.

Our child is a lot older and some of the below have come along as the years have progressed.

An important element to consider is if you will be comfortable for your child(ren) to take control of all the monies at age 18? My child seems well balanced when it comes to money but, even so some accounts are in our names (me/wife) and we know that they are for our child or to benefit our child. We may just give them the money at some point or we may use the money to help them; we'll see what life throws at us.

In child's name:

1. S&S JISA
2. Savings Account
3. Debit Card bank account (was a savings account)

The savings account No.2 is money from ourselves, aimed at older age, i.e. Uni, car, etc etc (whatever they want to use it for)

The debit card account (was savings) is for gifts, money she earns, etc. The idea being that she should have access to this money as it is hers, has been gifted or earn't for her to use as she see's fit.

In our names, S&S accounts x2 (mine and wife's names). This is where we will decide when it is handed over.

chelseablue

I invest £100 a month into a S&S ISA for my son (its in my name so he cant blow it all at 18, but I know its all his money)

He also has a Halifax Young Saver account that any birthday and Christmas money goes into

cherabelle

Albermarle wrote: »

Just to go off topic slightly . From a family finance point of view the most obvious investment is for a higher rate taxpayer to pay enough in a pension to pay less/no 40% income tax.
So if you are not already doing that, then it should be a priority over other alternatives. . You can always give some of it back to the children when you are 55, but you will not get such a good deal with any other type of investment.

Thanks, I already have reduced my tax liability as much as I think I can by purchasing EPA at state retirement age minus 3 years. I now only pay 40% on approx £9 of my salary. I am not sure I have the option to increase my allowances any more but I will look at it again just in case.

AnotherJoe

If you are not using your full ISA allowance then you could open an ISA in your name that is "earmarked" for them that way you can control when they get it. You could perhaps invest in one fund in that you regards as his (or theirs if more come along later ) so you can continue to invest since you can only invest in one S&S ISA in any one tax year.
I suggest you also take some time out to be more familiar with investing for your own benefit. Try reading the Monevator website asa start.

cherabelle

Thanks very much all.

I think we have decided on the following approach, but like cloud_dog suggested may possibly evolve over time depending on circumstances etc.

1) A JISA S&S, most likely with Vanguard as the website seems easy to understand and it appears to be a popular choice.
2) Some kind of savings account that can be converted to something with a card in the future for things like gifts etc.

We will then look at whether it is sensible in the future for us to put some S&S in our name which is a fund we can manage. Fingers crossed we can install good financial skills from an early age now....

ChopperST

Please consider the advice regarding your own SIPP - if you are a higher rate tax payer reducing your ANI under £50k also has the benefit of avoiding the higher rate child benefit charge.

If you are going to use cash savings for the long term - look at the regular savers (Halifax / Barclays) that at least beat inflation.

cherabelle

AnotherJoe wrote: »

If you are not using your full ISA allowance then you could open an ISA in your name that is "earmarked" for them that way you can control when they get it. You could perhaps invest in one fund in that you regards as his (or theirs if more come along later ) so you can continue to invest since you can only invest in one S&S ISA in any one tax year.
I suggest you also take some time out to be more familiar with investing for your own benefit. Try reading the Monevator website asa start.

Thanks for the advice, neither myself nor my husband use ISA's as at the moment, mostly because we are using the money we "save" to do work on the house (loft conversion, downstairs toilet, garden, garage extension). It is something we should probably look more into though.

My only worry I had about putting stuff in our names, which was actually for them, was would it affect our options when we did things like mortgages etc as you have to declare savings. Would they not say we had access to those and look on us less favourably?