Child savings account to beat inflation

andrei98

Hi there,

I'm seeking some guidance, if you wouldn't mind.

I wish to set aside £96 every month for a span of 18 years for my child. I'm in search of an account that restricts withdrawals but permits limitless deposits. I have concerns that the money might not outpace inflation if left untouched for 18 years. Could you kindly recommend some savings accounts or ISAs?

Appreciate your time.

r6mile

Cash savings are unlikely to match inflation. A junior stocks and shares ISA (ie Vanguard offers them for example) is probably your best bet for a long term investment, as to what investments to chose within it it will depend on your risk appetite.

jaypers

JISA all the way. 

andrei98

r6mile said:

Cash savings are unlikely to match inflation. A junior stocks and shares ISA (ie Vanguard offers them for example) is probably your best bet for a long term investment, as to what investments to chose within it it will depend on your risk appetite.

I don't want high risk, I just want something to beat inflation, what I would put in the JISA now for my child to get it later

Vanguard or wealthy? 

Albermarle

andrei98 said:

r6mile said:

Cash savings are unlikely to match inflation. A junior stocks and shares ISA (ie Vanguard offers them for example) is probably your best bet for a long term investment, as to what investments to chose within it it will depend on your risk appetite.

I don't want high risk, I just want something to beat inflation, what I would put in the JISA now for my child to get it later

Vanguard or wealthy? 

To beat inflation consistently you have to invest the money.
Investing brings a level of risk,
The level of risk can be mitigated to a large extent by having a mixture of investments that are classed as medium risk for example and by holding the investments for a long time.
This JISA has no fees although as always the investment (s) you pick with have some fees.
Junior ISA | Invest in a Junior Stocks and Shares ISA | Fidelity

masonic

andrei98 said:

r6mile said:

Cash savings are unlikely to match inflation. A junior stocks and shares ISA (ie Vanguard offers them for example) is probably your best bet for a long term investment, as to what investments to chose within it it will depend on your risk appetite.

I don't want high risk, I just want something to beat inflation, what I would put in the JISA now for my child to get it later

Vanguard or wealthy? 

There are different types of risk. The main risk someone faces when they have a long investment horizon is inflation risk, as you have correctly identified. Investment risk can be reduced by choosing a broadly diversified mainstream investment fund and holding it over the long term. An 18 year investment horizon is more than enough to reduce the risk of not keeping up with inflation to low single digit %. Costs are also a significant factor when considering long investment horizons, so you could take the Fidelity JISA suggested by Albermarle and invest in a low cost multi-asset fund such as HSBC Global Strategy, Vanguard Lifestrategy, L&G Multi-index or Blackrock MyMap to keep fees to a minimum. Wealthify (if that's what you were referring to) is a more expensive option than either Fidelity or Vanguard direct, but in the early years, it makes little difference in pounds and pence - it will be the later years when fees become most important.

xylophone

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

Try a  global multi asset fund within a stocks and shares Junior ISA?

masonic

xylophone said:

Try a  global multi asset fund within a stocks and shares Junior ISA?

For this, there is a better Monevator article: https://monevator.com/passive-fund-of-funds-the-rivals/
Though the higher risk global tracker funds could be considered for someone with such a long investment horizon.