The Best Way to Save For My Child

NurseMoneySaver1122

Hi

Saving for my 3-and-a-half-year-old's future, so long-term saving.

Currently have £5000 saved for her (atm it's in Tandem, in my name, earning 4.65%).

I save £120 every month, plus occasional extras, for example if I sell on any of her unused toys/clothes.

I'm concerned if I don't invest it/some of it, her savings are at risk of losing value in 'real' terms, but feel I need to better educate myself on this as I know very little!...so any tips very welcome!!!

Would love some ideas of where people would put this money (currently saved amount and future monthly savings), if they were in my shoes?

xylophone

If you do not wish to make outright gifts from your pwn resources to your daughter now, you might wish to open your own stocks and

shares ISA - you will then be in a position to decide when and if you make such gifts.

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



With regard to modest birthday/Christmas gifts/ proceeds of sale  of your daughter's toys etc, you might open a cash JISA for her, the

proceeds of which will be available when she turns 18.

https://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-children-s-accounts.html

Bigwheels1111

Whichever way you go, just remember to teach her about money.
Save, spend etc.
Of when she gets it at 18, it will last a month or years.
This will be down to your teaching.

Mikeeee_2

NurseMoneySaver1122 said:

Hi

Saving for my 3-and-a-half-year-old's future, so long-term saving.

Currently have £5000 saved for her (atm it's in Tandem, in my name, earning 4.65%).

I save £120 every month, plus occasional extras, for example if I sell on any of her unused toys/clothes.

I'm concerned if I don't invest it/some of it, her savings are at risk of losing value in 'real' terms, but feel I need to better educate myself on this as I know very little!...so any tips very welcome!!!

Would love some ideas of where people would put this money (currently saved amount and future monthly savings), if they were in my shoes?

Be careful of this as you will be using your own personal savings allowance here. So make sure any other savings don't take you over the annual limit. If you can move the savings to a JISA or something else tax exempt, I would do that. Even if you make the account in your child's name, the interest is only tax free if it's £100 or less in the year. Any more and you will be clobbered for the whole amount. 

Baldytyke88

I put £500 in a SIPP for my 20-year-old daughter, we invested the £600+ in shares, Norcros PLC.

It will make her think about the future and how investing in shares works. Perhaps not a SIPP for a young child, but an investment in China or broad unit trust.

gravel_2

I would recommend not investing solely in one Plc. or China.

jimjames

Investing rather than saving would seem to be a better idea for a 3 year old. JISA or ISA in your own name would avoid tax implications and for that sort of timescale a worldwide index tracker would probably do the job at low cost. It will vary up and down over time so you need to be aware of that but if it's down you'll buy more units that month that will help the long term total.

Nurse2047

check out https://youtube.com/@damientalksmoney?si=CNnquDXEA2xK0JHW lots of great information. 

https://youtu.be/Ib1C3tujEno?si=DKOVizOcv_RRbozy

I would look at a junior s&s isa with fidelity as no fees and put it in a global index fund. 

I also put £25 into my children’s SIPPS each month to get them started early for pension and for compounding to do its thing. 

https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

https://youtu.be/FYzfGeeOJfs?si=OWT6nYytruawMoeh James Shack 

https://youtu.be/isq_2tw6pdQ?si=FBWoqemddjm06_4O Humble Penny 

https://youtu.be/Ozyc0nWUImk?si=SKMc47vQH3MfPq_f Toby Newbatt

https://youtu.be/ZEIe8anKrjw?si=346_OnCZZgQ_gCdq CreatingBalance

Albermarle

Baldytyke88 said:

I put £500 in a SIPP for my 20-year-old daughter, we invested the £600+ in shares, Norcros PLC.

It will make her think about the future and how investing in shares works. Perhaps not a SIPP for a young child, but an investment in China or broad unit trust.

I also put £25 into my children’s SIPPS each month to get them started early for pension and for compounding to do its thing.

OP - Be aware that there two schools of thought regarding starting pension for children/young people.

The opposite one to the above is that the young people would benefit more from having money in the Twenties than their Sixties, when they may well have a pension from work and not need the money.

Baldytyke88

Albermarle said:

OP - Be aware that there two schools of thought regarding starting pension for children/young people.

The opposite one to the above is that the young people would benefit more from having money in the Twenties than their Sixties, when they may well have a pension from work and not need the money.

Or even help them retire in their 50s?

silvercue

Junior Stocks & Shares ISA is a great way to invest in her future.   Keep within the yearly allowance and there will be no tax to pay.  This may not seem like a big deal now, but in 15+ years, it could well be.  

The most important way to invest in her future, is to get involved in that JISA too and watch it grow and then teach her the power of compound growth.  You may not understand that just yet, but you will.

That knowledge may just set her up, financially, for life.