Children Savings

beancounter80

Hi
I trying to work out what’s best to do with savings for my kids. 

I put £100 per month into an account, currently it’s in a Santander account in their name but it only pays interest upto £2k. It currently has £5k in so aware it’s not earning anything on £3k. All the accounts either only pay on small balances or can’t be managed online.

Bit lost as to what is the best approach to take so any advice would be appreciated.

Nurse2047

How old are your children? Do they have a junior isa? 

km1500

Thete are several savings accounts paying 2.8 to 2.9% for example Sainsburys defined access account

beancounter80

MFW2026 said:

How old are your children? Do they have a junior isa? 

8 and 5. They don’t have one no, everything is just in a Santander account currently 

beancounter80

km1500 said:

Thete are several savings accounts paying 2.8 to 2.9% for example Sainsburys defined access account

Would that be putting the account in my name and just putting their funds in it?

ispookie666

@beancounter80 You could look into Junior ISA  or Junior Stock and Share ISA and probably put the money into a global tracker. I moved all of the cash ISA into S&S, as the long term returns from them will be far better. This does not mean that you will definitely have positive returns!
Ultimately this will boil down to risk apetite.  

I have my daughters S&S JISA with Fidelity, they do not charge fees like Hargreaves Lansdown till the child is 18. 

xylophone

Below may be worth a read.


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

https://moneyfacts.co.uk/isa/junior-isas/

https://www.fidelity.co.uk/junior-isa/fees-and-charges/

https://monevator.com/low-cost-index-trackers/

https://monevator.com/best-global-tracker-funds/

Nurse2047

Yes I have s&s JISAs with Fidelity and as your children are still very young I’m sure most would recommend this over a cash jisa. Otherwise could use premium bonds in their name or a child sipp?

ForumUser7

Here is another thread discussing Children's savings accounts, with some good ones listed: https://forums.moneysavingexpert.com/discussion/6407656/childrens-savings-accounts-discussion-area#latest , courtesy of @refluxer

olbas_oil

beancounter80 said:

Hi
I trying to work out what’s best to do with savings for my kids. 

I put £100 per month into an account, currently it’s in a Santander account in their name but it only pays interest upto £2k. It currently has £5k in so aware it’s not earning anything on £3k. All the accounts either only pay on small balances or can’t be managed online.

Bit lost as to what is the best approach to take so any advice would be appreciated.

The most important question is when do you want them to have access to the savings?
a) 18 That's the easy one, and Junior ISA is a good choice.
b) <18? (perhaps to pay for things that they want, and you agree they can use this 'nest-egg' - driving lessons? scuba diving?)
c) >22? When you're sure they won't 'blow it' on sex, drugs and rock 'n roll, and perhaps use as house deposit in their twenties.

xylophone

The OP should also take note of the "£100 rule" relating to income/interest on gifts to his minor unmarried children.

 If gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent's income. A child cannot get back any tax on that income. The £100 rule applies separately to each parent.

The £100 rule applies to income arising each year. It does not matter whether the money in the account is comprised of part capital and part added interest. The £100 rule applies as long as income is over £100 in any one year for any one child from one parent.

For example

If a parent gives a child £2,000 which earns £98 interest the interest belongs to the child for tax purposes and the account can be registered for gross interest. But if the £98 is added to the account, leading to £101 interest being earned in year 2, the interest has now exceeded the £100 limit. This means it now belongs to the parent for tax purposes .

 The £100 rule does not apply to parental gifts into JISA.