Children's savings for university

reddevil375

Hi

My daughter who is 16 and my son who is 14 would both currently Iike to attend university after they have done 6th form. Me and my wife both decided that we would prefer for them to take advantage of the student loan to pay for any fee's and then we would help with accommodation costs. We want to start saving for the kids university now and will be saving around £700 for daughter per month and around £500 for son.  Do you think it would be advisable to open a stocks and share JISA for them and drip feed the monthly amount into there? Or should we just save in normal cash ISA?  They both already have normal bank accounts with savings of around £2.5k each. 
Thank you for help

xylophone

Your daughter will require the money in 2023/4?
Does she already have a CTF/JISA?
Does your son?

pat1976

This is pretty short term saving, so as you've indicated cash isa or other savings accounts or possibly premium bonds might be best. Just somewhere the money will be safe with hopefully growth to keep up with inflation. 

Your kids already have a tidy sum available to them which suggests they are financially savvy (congratulations) and probably wouldn't blow any money you put in their names, but it's always a risk.

How is your tax position with regards to tax on interest or maxing your own isas? If you've space then keeping it in your own name could be prudent. However there are kids accounts which have better interest rates.

On the other hand, that's a lot of 'spare' money each month, so you've probably already got a fair stash. You could just keep on doing whatever you are doing and if nothing changes use this extra money to pay accommodation, or dip into savings or investments. 

reddevil375

xylophone said:

Your daughter will require the money in 2023/4?
Does she already have a CTF/JISA?
Does your son?

Yes daughter will be going sept 2022 and son sept 2024. Both have a JISA which they have £500 each in. It was only opened last year and they have always had normal Barclays account.

reddevil375

pat1976 said:

This is pretty short term saving, so as you've indicated cash isa or other savings accounts or possibly premium bonds might be best. Just somewhere the money will be safe with hopefully growth to keep up with inflation. 

Your kids already have a tidy sum available to them which suggests they are financially savvy (congratulations) and probably wouldn't blow any money you put in their names, but it's always a risk.

How is your tax position with regards to tax on interest or maxing your own isas? If you've space then keeping it in your own name could be prudent. However there are kids accounts which have better interest rates.

On the other hand, that's a lot of 'spare' money each month, so you've probably already got a fair stash. You could just keep on doing whatever you are doing and if nothing changes use this extra money to pay accommodation, or dip into savings or investments. 

Thank you, mine and wife's tax position is already maxed out so we would need to save in kids own names. Hopefully they remain good kids and what we have taught them about saving will pay off in long run. They both do part time work at our company and have been saving 40% of whatever they earn. Both pay £50 into there own sipp each month which is encouraging.  
Will take a look at premium bonds 

xylophone

Both have a JISA which they have £500 each in. 

Did they not both have a CTF?

https://en.wikipedia.org/wiki/Child_trust_fund

Cash-Cows

You said you were taking out loan for fees but you didn't say you were doing the maintenance loan? You might as well do both. The sums you are saving seems very high. Why don't you wait until they start and pay monthly from then based on a budget you can set when you know the costs involved more accurately. 

Ray_Singh-Blue

£500-£700 per month should pay for their accomodation. Why not just keep that money handy in your name, and pay for their accomodation directly if and when the time comes? This way you remain in control while their neurones are still joining up- they don't always join up right first time 😀

daveyjp

xylophone said:

Both have a JISA which they have £500 each in. 

Did they not both have a CTF?

https://en.wikipedia.org/wiki/Child_trust_fund

My thoughts too. 

reddevil375

Yes they both had CTF accounts originally and I recently had them converted to JISA via Hargreaves lansdown. My plan was to let them loan pay for fees and then use the savings to pay for the living costs.  Just wanted to start early now so it was budgeted for and not a big worry in few years time.    The money they are getting from us is for the work we get them to do for our business. Daughter helps with admin and does a full day a week and son does website updates and marketing. So it's a wage really for them. However I want them to save all this for university.

Alexland

If the money will be spent in less than the next 5 years any investment in S&S is a gamble as it's not certain you will get back as much as you invest. S&S investments are intended for at least the medium term preferably much longer to balance out the ups and downs of the market. Consider going for the best rate Cash Junior ISA such as Coventry BS at 2.95% if you trust them to have access to the money from age 18.