Children Saving Account

carl_muffin

Hi,

We have just had our first child and my father wants to put £25.00 per month for 25 years into a savings account for his first grandchild ideally my we do not want our child to have access to this money until that age. This is because I had the same investment for myself and drew it out at 18 and it lasted me only a couple of months with nothing to show for it

I have not got a clue to where to start looking for suitable products for our child.

Another question is that we intend to save our child's beneift monies of £18.10 per week into another saving account, some of my friends have suggested an ISA would this be suitable? As the advice in the benefits form suggest not to have the money put into an ISA!!

Any suggestion would be gratefuly welcomed!!

Kind regards
Carl

BruceyBonus

If you want to keep it away from the child until 25, you would have to keep the money in your own name. If the account is in the child's name, it becomes theirs at 18.

Meltdown_2

As the advice in the benefits form suggest not to have the money put into an ISA!!

The (original) idea of benefits is that they were to help with everyday costs. They would all have been spent by the time the next benefit payment was due.

carl_muffin

Right thanks so putting the account in our name and signing it over when he is 25 would be the best option?

Carl

BruceyBonus

carl_muffin wrote: »

Right thanks so putting the account in our name and signing it over when he is 25 would be the best option?

Carl

If you are a taxpayer, then the interest will also be taxed.

Could you not put the account in the child's name but then teach them about the importance of money when they are growing up? Seemed to work with me!!

baby_boomer

To put into perspective the loss of interest over 25 years if the money was not saved either into an ISA or into a tax free account in the child's name.

You would lose £1057 on £25 per month compared to the £7,500 total your father is intending to save. This assumes interest rates @ 5% and basic rate tax @ 20%.