Savings account for baby

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Can anyone recommend a good savings for a baby? I want to open our 10 month old a savings account to put money into for when she is older, but I'd rather an easy access than a regular saver so I'm not restricted to certain amounts each month... some months I will be able to put larger amounts in, sometimes nothing.

A lot of the guides on the website focus on older children. For example Santander for under 13 you have to have a current account which I dont have with Santander.

Lloyd's have 1.5% which seems reasonable?

colsten

MSE have an article here: https://www.moneysavingexpert.com/savings/child-savings-tax-free/

In addition, there are several Regular Saver accounts for kids: https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list

You may be faced with difficulties at present opening a kids account, as they often require Branch appointments and these are nigh impossible to get right now.

eskbanker

Worth considering investing rather than saving - keeping the money in cash deposit form runs the risk of real-terms value loss due to inflation over a lengthy period.  Junior ISAs are available in cash or investment varieties....

poppy10_2

For a baby if you are planning to invest for the long term, potentially 18-20 years till they go to Uni, then you should be looking at stocks and shares rather than a cash savings account. Open up a Junior ISA with the likes of AJ Bell. You can put in as much or as little as you like each month. The money can only be withdrawn when they turn 18 which helps to keep it locked away from any short-term temptations

MaxiRobriguez

Can I half take over this thread and ask forumites their opinion on setting up a pension for a newborn in lieu of or alongside a JISA?

BuildTheWall

MaxiRobriguez said:

Can I half take over this thread and ask forumites their opinion on setting up a pension for a newborn in lieu of or alongside a JISA?

I had the same question. Some answers found on this forum are: the major expenses in children’s lives come early - uni fees, marriage, home purchase etc. Pension only benefits them when they are 57 or later. So your sipp contribution wouldn’t help them in the early stages of their life when they might find it tough. Some young people even don’t want to have kids until they have saved for a house. 

If you have maximised your ISAs, invest in a junior ISA and then a junior SIPP. And do this only after maximising your own pension contributions. 

bhjm

i opened an "junior Sipp" ( https://www.youinvest.co.uk/investing-for-children/junior-sipp) for my little one once he was born
don`t want him to burn through the saving once turned 18. 
a longer time for the investment to grow and potential of benefit from the compound interest.
Saving for retirement - probably most of us started it way to late - so i wanted to have this burden taken away from him as early as possible

Keep_pedalling

MaxiRobriguez said:

Can I half take over this thread and ask forumites their opinion on setting up a pension for a newborn in lieu of or alongside a JISA?

I certainly would not do it in lieu of savings for earlier life events. Yes you risk them being wasteful with it when they are young, but with a SIPP you risk them never benefiting from it as around 11% of use don’t actually make it to retirement.

Alexland

poppy10_2 said:

Open up a Junior ISA with the likes of AJ Bell.

AJ Bell would cost £1.50 per trade and 0.25% ongoing.

For a S&S Junior ISA (or SIPP) then Fidelity charge no platform fees if you stick to funds but they do require either a £1k initial lump sum or to start a £25+ per month plan.

MaxiRobriguez

Keep_pedalling said:

MaxiRobriguez said:

Can I half take over this thread and ask forumites their opinion on setting up a pension for a newborn in lieu of or alongside a JISA?

I certainly would not do it in lieu of savings for earlier life events. Yes you risk them being wasteful with it when they are young, but with a SIPP you risk them never benefiting from it as around 11% of use don’t actually make it to retirement.

Yeah I think that was my take on it, not in lieu of, but alongside.

I've maximised my own pension contributions and that pot should be at least £800k by the time I can access it at 57, at which point our child will be 25. Vague plan is to use other sources (either S+S ISA or remortgaging of our house) for any help with uni fees/accomodation and then any deposit for a house, should I still feel that generous after we've raised him. Then the pension comes into play and can pay off any remortgage/top up the ISA if needed.

That plan is in place, I'm also planning £100 a month to go into either a JISA or a pension for him (hence initial question). Given above I think I've answered my own question. A gap between him needing the cash and my pension being accessible, I guess JISA works best.

kinger101

MaxiRobriguez said:

Can I half take over this thread and ask forumites their opinion on setting up a pension for a newborn in lieu of or alongside a JISA?

I considered this, but the realities are they'll ideally need money earlier in life for house deposit.  The sooner they get on the ladder, the easier it is for them to set their own money aside for pension.  Potentially, it could also be used for education if the student loan regime changes to something where they'll likely pay it all back in the future.  Or they want to study for doctorate.

The tax advantages of a SIPP aren't that great.  The £2,880 will be topped up to £3,600, but as it will be taxed at their marginal rate in retirement, it's likely only a 6.25 % uplift assuming pension taxation remains the same.  If they could potentially be making their own contributions once working under salary sacrifice or HR tax, you might just end up eroding their LTA with inefficient contributions.

The only way pension could work well is if you can make additional contributions to your own pension and can later take a tax-free lump sum on retirement and gift to them if it ties in with the age they need it for house deposit.  You just have to remember to live another 7 if IHT comes into play.