Decisions for 16 year old ISA savings

eLLeBee1986_2

Hi all,

My son has recently turned 16 and has gotten himself a part time job to work around his college studies (proud mum!). We've already had discussions around savings and he's keen to get going (super proud mum!). I was quite late to the party in learning the importance of savings and investments having only started myself last year so I'm keen to educate my kids up so they can have a much better head start than me.

Together we have put a plan together for him to:
- "lock away" 20% of his savings for his future
- Save another 20% separately for big purchases he personally wants such as cars, motorbikes etc

For the latter he will just use an easy access/regular saver type account that he can dip into when he needs. For the funds he wants to lock away we are trying to decide the best course of action in regards to which accounts to use.

I already have a junior stocks and shares Isa that I contribute monthly to him and would ideally like to keep his savings from his job separate to this because I don't want to dampen the moment of me being able to hand over the lump sum I've personally saved for him when he turns 18 and blur the lines of what I've saved and what he's personally managed to save. At this point I will encourage him to continue with the stocks and shares Isa.

In the meantime I know we have a couple of options with either a junior cash isa or now that he is 16 he can open an adult ISA which will give him a bigger allowance to play with but a lower interest rate. 

Have any of you been in similiar situations and what route did you go for?

TIA

MX5huggy

How about a HSBC My Savings paying 3.25% on up to £3000? 

anonmoose

I would recommend HSBC. Both my kids (similar age to yours) have them with the debit card current account and they can manage the accounts online transferring from the HSBC current account to savings account as and when needed. 

Not really much point in cash isas for that age as they can get better interest rates elsewhere. Like you I am saving in a JISA separately. 

Albermarle

As above for most  adults, cash ISA's are largely a waste of time ( unless you have large savings ) and you will get better savings rates in non ISA accounts.

eLLeBee1986_2

Thanks everyone, I'll try the HSBC savings account for him