Children’s savings

philb3374_2

I don’t have any children of my own but would like to be able to save for my best friends children on a regular basis so they have something from me when they’re 18. 

I don’t believe I can open a children’s saving account as I’m not their parent, but are there any other tax-efficient options I can access which locks the money away until their 18th birthday? I’m an additional rate tax payer so don’t want savings I make for them to be taxed if it’s avoidable 

gravel_2

Would the parents open a JISA and give you the details? Only issue is making sure no more than £9k total is paid in by all parties in any given tax year - harder to track when it's not just the parents paying in.

You could possible buy them premium bonds? Also requires involvement of the parents.

jimjames

Do you use your own ISA allowance? Depending on the age of the children you might be better to invest the money for them rather than keeping as cash savings

wmb194

philb3374_2 said:

I don’t believe I can open a children’s saving account as I’m not their parent...

No, you can. Some institutions are more open to it than others but e.g., you can at Barclays and Lloyds/Halifax. Look at an account's opening requirements. You'd need to get hold of the child's birth certificate.

Personally, I'd save in my own name and gift the money when you feel fit. This way you won't be railroaded into having to give it to them when they're 18 (16 in Scotland). The downside to this is that it won't be ringfenced for them if something happens to you or you e.g., get divorced.

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

kempiejon

Bit niche.
They are a rare product but the TESP tax-exempt savings plan might work. There are specific products aimed at children. Can be opened in the name of the child, comes under their control at 18. £25 per month cap I found, all investments free of all tax if kept for at least 10 years. Not cash mind. Run by mutuals or Friendly Societies invested into their with profits bonds.
I did some research nearly 10 years ago and invested with Forresters' Friendly. Not a recommendation, there are a few other suppliers. Opaque as to where it invests and there are charges to watch out for too. The tax treatment was the most interesting thing at the time.
Massive penalty for early encashment, tapered after a couple of years, mine has made small growth and the promise of a terminal bonus.