Childrens Savings

Cypher

I've not been around the forums for quite a while and I'm long out of touch with what's currently available,so I hope someone can help.

I'm after some advice on the best place to put my son's savings. He is 16 years old, a non tax payer and has approx. £3000 to save. I was thinking of putting it in an ISA, but as a non taxpayer he could probably get a better interest rate in a standard account.

Does anyone have any suggestions ?

BTW He will not be allowed access to the money for at least 2+ years

Cypher

After a lot of looking around on the internet, there doesn't seem to be anything hats jumping out at me.

The best I have found so far is Barclays Tax Haven ISA 6.5%AER (which includes a 1% bonus, so only 5.5% really).

I've probably left it to late for this years ISA anyway now, but its unlikely he will be saving anything much next year so its no great loss if it takes up 2008/09 entitlement.

Any other suggestions ?

Lokolo

Yeh nothing jumps out at me either. You can get ISA for next year from Sunday for him and put the money in there, but if you want the best rate for a number of years a fixed rate maybe good? Halifax offer a 6.2% one (I think)

Cypher

Thanks for the reply Lokolo.

The Halifax option you suggested might be the best idea, his money is currently in the Halifax anyway so it would make setting it up much easier. :T

I had the money in a trust account so although it was his money I have been in control of the account for around 10 years. With the governments new rules he will have to pay tax on his interest if its left in my name. So that's why I am having to move it to try and maximise his interest. Annoyingly I have to put the money into his sole name where he will now have control of it

Lokolo

Um you will usually get a savings book and stuff with some savings account so just hide it :P maybe harsh but its a suggestion!

Also just teach him that money means a lot, kick him up the bum and make him get a small part time job, then he will learn the value of money

Cypher

Yes but locking into a fixed term makes it harder for him to dip into it, although he could just close it. I would hide the account details though just to be safe

I did the same with my other lad about 18 months ago. He opened the 8% LloydsTSB regular saver for his money and we quickly got all his money into it. I did hide his bank cards etc and broken legs got mentioned if he ever touched the money