How much to save monthly for my daughter and my stepson?

DireEmblem

xylophone said:

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

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

In terms of a cash account, the NS&I JISA currently offers 3.25%.

Even at 3.25%, given the long term nature, would a S&S account not prove better?

bowlhead99

vpdbac said:

AlanP_2 said:

Personally I would ignore what the 5yos father may be doing, you have no idea so why worry about it?

The worry is that my stepson gets £7k+£7k from his parents and my daughter gets £7k from her parents. I think I'll feel pretty bad. 

I need to sit with this and think about it. 

Well, how do you know that the boy's dad isn't going to have put away £100 a month instead of £50 a month, and instead of putting it in a cash savings account like your wife earning about 2%, he invested it in an investment fund returning an average 7% a year instead.

Then the £x from your side of the family to the son at age 18 would be about £13,000 while the £y from the father would be £43,000. So to get the total of £56,000 to your daughter (assuming just using the same savings accounts and not investments), you would have needed to be putting away over £200pm for your daughter, which would be a shock to find out about that with hindsight. 

You can't really control what the father earns or chooses to gift to his son. Maybe he will give him a car. Maybe he will teach him life skills like how to drive the car (if it's not all self-driving Ubers by that point). Maybe he will bequeath him a house, while you and wife will only give him half a house because you have a daughter as well.

You will have the opportunity for a bit of 'hindsight' with your daughter anyway because she's going to be 3-4 years behind the boy in reaching adulthood. So if you're putting £50 away for her each month just like you do with your stepson, you could always put a separate £50 a month into your own ISA or pension so that thirteen years from now when you find out what (if anything) the father did for his son on turning 18, you already have a separate pot of money to boost the daughter's pot if needed, or spend on something nice for your family if not needed.  You may still find out several later that the father decides to gift his son a house deposit or something which you can't or don't want to match. So it's never going to be equitable. 

I do agree with the others that if you're looking at a 10-15+ year timescale then any 'putting away' of money for adulthood should be in investment funds, not in a cash bank account or cash JISA.  Savings accounts are for saving towards short term goals or for some 'rainy day' - where it's important that the pot of money doesn't go up or down in value with the stock markets just before you need to spend it.  In this case you are planning on putting something away for the child to get something in their mid to late teens, which is more than a decade away, so a junior investment ISA or using your own ISA allowances would seem to be the way to go.

vpdbac

Thanks for all the answers and advice. It's a tremendous help to hear other people's thoughts on the matter.

thank you

xylophone

Even at 3.25%, given the long term nature, would a S&S account not prove better?

It could - links in previous.

vpdbac

Setting aside £50 a month for 18 years is £7200 which most 18 year olds would be over the moon 

*£10,800

£7,200 is 12yrs at 50pm

Not sure I should be taking financial advice from you.