Grand Child - best way to save?

Tryinghardtosave

I am blessed to have recently become a grandparent. In speaking with my daughter, we would like to start a regular savings - where would be the best place? We would want to do regular monthly payments and I think to let it run until the grandchild is 18years old.

Albermarle

This question comes up regularly.
There are childrens savings accounts and there are Junior ISA's
All is explained here. Top children's savings accounts: 5% interest - MoneySavingExpert

Due to the long term involved, you should also consider investments via the JISA route as opposed to savings. Based on history, you would expect a better return from investments than savings over a 18 year period.
There are various providers, but this one waives it charges for JISA's ( although the investment funds themselves always have a charge )
Junior ISA | Invest in a Junior Stocks and Shares ISA | Fidelity

Exodi

Albermarle said:

This question comes up regularly.

Yep... copy/pasting my reply from the last thread a few days ago (is that lazy?)

https://forums.moneysavingexpert.com/discussion/6403718/savings-account-for-grandchild

Exodi said:

Personally (others on this forum would disagree) - I would save any money for children or grandchildren in my own name (maybe in a bespoke savings product that I've earmarked for them) to manage and give as I see appropriate.

Plethora of reasons why, which I won't bore you with - but one of them is the pain of watching freshly turned 18 year olds rip through thousands of pounds worth of savings on nights out in a matter of months while parents/grandparents are powerless to stop it. 18 year olds aren't notorious for their financial responsibility...

Though others fairly argue that if they do this, it at least offers a 'relatively' cheap lesson early on that money doesn't grow on trees.

I'd personally rather buy their first car and driving lessons, or help them with a deposit, than give them a wedge of cash to do with as they please.

Tryinghardtosave

I sort of agree with you Exodi, it would be painful to see them burn through anything they got and have nothing to show for it. My kids were quite good, used a bit for fun or expensive items they wanted, and the rest was saved\invested elsewhere. I also gave them the best incentive to save by offering to match what they saved - which at times did become quite costly but helped them get on the property ladder. 

Albermarle

Savings pot for baby? S&S ISA? — MoneySavingExpert Forum

MikeJXE

I have 4 grandkids 3 of them ages 12,13,15. I needed to put money locked away from their dads lol.  I gave them £9000 each for last Christmas they were in a child trust fund, I convinced the mothers to pull them out and move them to Coventry Building society Jisa at 3.1%. When the money was transfer they all had less than they had last Christmas. 

billyboy

Junior Sipp is by far the best. put up to £ 2880 every year and the government pays in another £720. They can't touch it till they are 57 at the moment and you will probably be gone by then so won't need to worry about them spending it unwisely.

Exodi

MikeJXE said:

I have 4 grandkids 3 of them ages 12,13,15. I needed to put money locked away from their dads lol.  I gave them £9000 each for last Christmas they were in a child trust fund, I convinced the mothers to pull them out and move them to Coventry Building society Jisa at 3.1%. When the money was transfer they all had less than they had last Christmas. 

Doesn't seem to have been the wisest decision to be honest, and the fault of human nature to be risk averse playing out like this time and time again - you've bought in at the top of the market, and then upon noticing the markets are down, crystallised those losses by effectively selling the underlying investments and trasferring as cash.

Using something as an all world index fund as an example, this cash would now be down about 17% from when it was invested and would take approximately 7-8 years to recover at 3.1% in a JISA.

Bad time to have invested, but I think a JISA probably works best for you all anyway.

Albermarle

When the money was transfer they all had less than they had last Christmas. 

Which is why you should have probably left it there, to give it time to recover.