Savings account for a Newborn

dyerflyer

Hi there,

I'm in need of advice. I've got £5k I want to put into a savings account for a newborn and I want the money to remain untouchable until she's 25.

What's the best way of going about this, what gives good returns and what's the tax issues (if any)?

Jonbvn

Hi,

You would need to set up a trust to do what you require. Furthermore, given that you will be investing for 25 years, stocks and shares would be far better than savings.

hbl_2

A word on trusts is that once the beneficiary reaches the age of 18 and is of sound mind, they can petition the trustee to release the trust to them. You might want to think about locking it into an investment term of 25 years to make sure that it isn't called upon sooner. Who knows, she might study law at university and learn all about this in her first year and decide to come knocking!!

dyerflyer

Thanks guys, the parents will be setting up a CTF for the child and I wanted to do something different.

Why would the stockmarket be a better long-term investment? How would I manage the risk? Are there any companies that could do all that for me?

Lokolo

The stockmarket maybe give a better return. From past experiences shares have a better return than savings, but obviously this could change (who knows!).

http://www.childtrustfund.gov.uk/templates/Page____1220.aspx

They explain it there.

One of the more experienced guys will come and tell you how to handle risk and who could do it (dunstoh etc.) as I am not really sure about doing it for a child.