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  • FIRST POST
    • ejmolly
    • By ejmolly 1st Feb 18, 9:54 PM
    • 50Posts
    • 18Thanks
    ejmolly
    Best way to save for my 3 children
    • #1
    • 1st Feb 18, 9:54 PM
    Best way to save for my 3 children 1st Feb 18 at 9:54 PM
    Hi

    I am looking for advice on how best to save for my kids. My older 2 (age 5 and 6) have children saver accounts that I have been adding £50/month to since they were small. They both have a few thousand now. My youngest is only 9 months and I have yet to open an account for him. As I am going back to work soon I need to get this sorted so I can do the same and save £50/month.

    I donít really have time to be managing this on a regular basis. Would I better opening childrenís ISAS or any other longer term investments? A few of the accounts I looked at were bonus accounts and I really donít fancy every year having to move 3 seperate accounts.

    I keep saying I am going to spend a bit of time and research all this but I simply donít have the time so any advice most welcome!
Page 1
    • ValiantSon
    • By ValiantSon 1st Feb 18, 10:13 PM
    • 1,571 Posts
    • 1,295 Thanks
    ValiantSon
    • #2
    • 1st Feb 18, 10:13 PM
    • #2
    • 1st Feb 18, 10:13 PM
    A Junior ISA (JISA) would probably be the best option. You might want to consider an S&S ISA given the timeframe; you are likely to see better returns over time with investments than with savings.
    • xylophone
    • By xylophone 1st Feb 18, 11:28 PM
    • 25,108 Posts
    • 14,795 Thanks
    xylophone
    • #3
    • 1st Feb 18, 11:28 PM
    • #3
    • 1st Feb 18, 11:28 PM
    https://www.gov.uk/junior-individual-savings-accounts


    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa?cmpgn=PS0517UKPABJI0002&gclid=EAIaIQobChMIlvXR 9e6F2QIVw7vtCh1x6QR6EAAYASAAEgIkWfD_BwE

    http://monevator.com/using-vanguard-lifestrategy-funds-life/

    https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html
    • IanSt
    • By IanSt 2nd Feb 18, 10:29 AM
    • 259 Posts
    • 191 Thanks
    IanSt
    • #4
    • 2nd Feb 18, 10:29 AM
    • #4
    • 2nd Feb 18, 10:29 AM
    Don't forget that putting money into their names will mean that they gain access to their money at 18 and spend it as they want, so you may want to consider keeping the money in your name so that you can pass out the money at a time and a purpose you feel suitable.

    It also sounds that you're saving into cash accounts, which means you've got the problem that the cash accounts could start losing out to inflation, so you may want to think about investing at least some of the money. Investing the money is likely to make a lot more than just being in cash accounts - especially given that you'll be adding in on a monthly basis and will get more for your money when the markets dip.
    • ejmolly
    • By ejmolly 2nd Feb 18, 11:08 AM
    • 50 Posts
    • 18 Thanks
    ejmolly
    • #5
    • 2nd Feb 18, 11:08 AM
    • #5
    • 2nd Feb 18, 11:08 AM
    Thanks all. I will look at some of these options later tonight. The stocks and shares isas are something I had already considered but got lost in all the jargon!

    From looking at similar posts on here the vanguard ones seem to pop up regularly.

    What I may do is keep cash account for birthday/ Christmas/small savings but for the regular monthly put into one of the other investments.

    Getting access to a pot of money at 18 does concern me a little and although I am hopeful (!?!) they will be sensible who knows! I could try and keep it quiet but Iím sure over the years they would know.

    Thanks. Iíll do some more reading later.
    • aj23
    • By aj23 2nd Feb 18, 11:36 AM
    • 340 Posts
    • 127 Thanks
    aj23
    • #6
    • 2nd Feb 18, 11:36 AM
    • #6
    • 2nd Feb 18, 11:36 AM
    Use Children's Regular Savers. They pay good rates but low caps.

    Homesdale Building Society do a Young Savers account, 0-23 y/o, paying 2.25% and when they are 23 matures into a 2% Home Savers account. Worth looking at.
    • ValiantSon
    • By ValiantSon 2nd Feb 18, 11:53 AM
    • 1,571 Posts
    • 1,295 Thanks
    ValiantSon
    • #7
    • 2nd Feb 18, 11:53 AM
    • #7
    • 2nd Feb 18, 11:53 AM
    Thanks all. I will look at some of these options later tonight. The stocks and shares isas are something I had already considered but got lost in all the jargon!

    From looking at similar posts on here the vanguard ones seem to pop up regularly.

    What I may do is keep cash account for birthday/ Christmas/small savings but for the regular monthly put into one of the other investments.

    Getting access to a pot of money at 18 does concern me a little and although I am hopeful (!?!) they will be sensible who knows! I could try and keep it quiet but I!!!8217;m sure over the years they would know.

    Thanks. I!!!8217;ll do some more reading later.
    Originally posted by ejmolly
    Vanguard offer a good product at a good price. If any of the jargon confuses you then just ask.

    With regards to gaining access to the money at 18 it is just something that you have to accept and hope that you have brought them up to be sensible, but accepting that everyone is their own person. You can still advise them when they reach 18. You don't have to tell them about the accounts until they get to 18, but once they do then they are legally entitled to know that they have this money/investment.

    Apart from some small cash savings as you suggest, i.e. money they might draw on from time to time or special things, I'd avoid cash savings because inflation will eat into the value and the rate of return is poor. S&S are likely to outperform savings over the long term.
    • BearWhite
    • By BearWhite 2nd Feb 18, 1:01 PM
    • 566 Posts
    • 740 Thanks
    BearWhite
    • #8
    • 2nd Feb 18, 1:01 PM
    • #8
    • 2nd Feb 18, 1:01 PM
    Thanks all. I will look at some of these options later tonight. The stocks and shares isas are something I had already considered but got lost in all the jargon!

    From looking at similar posts on here the vanguard ones seem to pop up regularly.

    What I may do is keep cash account for birthday/ Christmas/small savings but for the regular monthly put into one of the other investments.

    Getting access to a pot of money at 18 does concern me a little and although I am hopeful (!?!) they will be sensible who knows! I could try and keep it quiet but I!!!8217;m sure over the years they would know.

    Thanks. I!!!8217;ll do some more reading later.
    Originally posted by ejmolly
    This is basically what my wife and I are doing for our two kids. Any money they get for Christmas or birthdays goes into a cash savings account in there names. They can do what they want with this when they're old enough to access it.

    I also have a S&S ISA in my name (Vanguard LifeStrategy 100) which I drip feed £100 a month into at the moment. When they're older and in need of some financial assistance this will be the pot which will be used if I and the wife think it's appropriate.
    • louloubelle79
    • By louloubelle79 2nd Feb 18, 1:14 PM
    • 318 Posts
    • 162 Thanks
    louloubelle79
    • #9
    • 2nd Feb 18, 1:14 PM
    • #9
    • 2nd Feb 18, 1:14 PM
    I!!!8217;m in the process of setting up Vanguard S&S Isas for my two children 7&8, easy process so far.
    • ejmolly
    • By ejmolly 2nd Feb 18, 2:51 PM
    • 50 Posts
    • 18 Thanks
    ejmolly
    Quick read whilst baby naps!! .... Just been reading the terms and conditions of vanguard and looks like minimum £100/month for monthly saver so guessing that rules all their accounts out??

    With 3 children to save for £50/month is about all I can manage at the moment
    • xylophone
    • By xylophone 2nd Feb 18, 3:02 PM
    • 25,108 Posts
    • 14,795 Thanks
    xylophone
    With 3 children to save for £50/month is about all I can manage at the moment
    https://www.onefamily.com/hub/finance/new-isa-junior-isa-guide/

    https://www.shepherdsfriendly.co.uk/plans/child-savings/junior-isa/fund-performance

    may be worth a look.
    • p00hsticks
    • By p00hsticks 2nd Feb 18, 3:44 PM
    • 6,082 Posts
    • 6,340 Thanks
    p00hsticks
    This is basically what my wife and I are doing for our two kids. Any money they get for Christmas or birthdays goes into a cash savings account in there names. They can do what they want with this when they're old enough to access it.
    Originally posted by BearWhite
    Perhaps I'm old fashioned, but I'd also recommend taking them along to open their own savings account when they're old enough - I still remember my mum and dad taking me along to the building society to open my very own savings account with some birthday money when I was seven or eight and being given the pass book to look after. Fifty odd years later I can remember it like it was yesterday and it started me onto the savings road.
    • ValiantSon
    • By ValiantSon 2nd Feb 18, 4:59 PM
    • 1,571 Posts
    • 1,295 Thanks
    ValiantSon
    Quick read whilst baby naps!! .... Just been reading the terms and conditions of vanguard and looks like minimum £100/month for monthly saver so guessing that rules all their accounts out??

    With 3 children to save for £50/month is about all I can manage at the moment
    Originally posted by ejmolly
    No, it doesn't rule them out. You don't have to make a monthly deposit. If you do want to then the minimum is £100, but you can just make ad hoc deposits as and when it suits, as long as you open the account with an initial investment of £500. As you have been saving £50 a month for them for most of their lives then you should have the necessary £500 each (and more), so you can still invest through Vanguard and then just add to the investment as you want.
    • ejmolly
    • By ejmolly 2nd Feb 18, 8:46 PM
    • 50 Posts
    • 18 Thanks
    ejmolly
    Perhaps I'm old fashioned, but I'd also recommend taking them along to open their own savings account when they're old enough - I still remember my mum and dad taking me along to the building society to open my very own savings account with some birthday money when I was seven or eight and being given the pass book to look after. Fifty odd years later I can remember it like it was yesterday and it started me onto the savings road.
    Originally posted by p00hsticks
    Very true! I can remember this too. I loved looking at my passbook every now and again. Funnily enough I just asked my husband (who is terrible with money!) if he could remember and he said vaguely!!
    • girllikeme1
    • By girllikeme1 7th Feb 18, 11:17 AM
    • 108 Posts
    • 28 Thanks
    girllikeme1
    Use Children's Regular Savers. They pay good rates but low caps.

    Homesdale Building Society do a Young Savers account, 0-23 y/o, paying 2.25% and when they are 23 matures into a 2% Home Savers account. Worth looking at.
    Originally posted by aj23
    My children have Halifax Regular Savers accounts which you can currently open online with a rate of 4.5 per cent.

    At the end of the year they convert to Young Savers accounts (currently 2 per cent I think) but you could then move the money elsewhere e.g. into an ISA or S&S.
    • ejmolly
    • By ejmolly 7th Feb 18, 8:44 PM
    • 50 Posts
    • 18 Thanks
    ejmolly
    Thanks for all comments.

    Have narrowed down to vanguard junior isa. The wording on their page is confusing but I have cleared up that the minimum £100 regular payment only applies when opening the accounts. If choose to open the
    accounts with a lump sum greater than £500 then you are definitely able to set up a regular payment of £50.

    Now the next dilemma is deciding which fund! So many choose from. From my limited reading this week I am looking at life strategy 80/20 with a risk score of 4. Any thoughts on this? Has looked at the retirement funds for 2030 and 2035 but the end dates don!!!8217;t quite work out with current kids ages. Either expire a little too early or too late.
    • ejmolly
    • By ejmolly 7th Feb 18, 8:45 PM
    • 50 Posts
    • 18 Thanks
    ejmolly
    Should also add going to keep open the current regular saver accounts with Halifax/bos for small savings - Xmas, bdays etc
    • Zorillo
    • By Zorillo 7th Feb 18, 8:56 PM
    • 82 Posts
    • 49 Thanks
    Zorillo
    Mine are in VLS100, it's a long time since it's going to be needed and I want to give it the best possible opportunity to grow.
    • ValiantSon
    • By ValiantSon 7th Feb 18, 9:03 PM
    • 1,571 Posts
    • 1,295 Thanks
    ValiantSon
    Thanks for all comments.

    Have narrowed down to vanguard junior isa. The wording on their page is confusing but I have cleared up that the minimum £100 regular payment only applies when opening the accounts. If choose to open the
    accounts with a lump sum greater than £500 then you are definitely able to set up a regular payment of £50.

    Now the next dilemma is deciding which fund! So many choose from. From my limited reading this week I am looking at life strategy 80/20 with a risk score of 4. Any thoughts on this? Has looked at the retirement funds for 2030 and 2035 but the end dates don!!!8217;t quite work out with current kids ages. Either expire a little too early or too late.
    Originally posted by ejmolly
    VLS80 is a reasonable choice given the length of time before the money is (potentially) needed. You could consider the VLS100, but this will be more volatile than VLS80. Either of those two funds are reasonable choices, it depends on how much risk you can tolerate.

    Sorry not to be able to give you much more to go on, but I don't think you will make a bad choice with either, as long as you are prepared for the falls in value when they come and don't get too stressed about them.

    The Target Retirement funds don't have to match their 18th birthdays exactly, so you don't need to rule them out for that reason. However, if reducing risk is something you would like to do, as they near their 18th birthdays, you could still do this with LifeStrategy funds by switching down from say, 100 to 80 and then to 60 in stages.
    Last edited by ValiantSon; 07-02-2018 at 9:11 PM.
    • kidmugsy
    • By kidmugsy 7th Feb 18, 10:39 PM
    • 10,341 Posts
    • 7,040 Thanks
    kidmugsy
    People at MSE tend to sneer at Friendly Society policies like this but I must say we were pleased with the one we opened for one nipper. So was she: she's invested with them since.

    https://www.forestersfriendlysociety.co.uk/saving-for-children/

    Another possibility would be Investment Trust savings schemes or JISAs: scroll down to pages 45 and 46.
    https://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats31Dec17.pdf
    Last edited by kidmugsy; 07-02-2018 at 10:43 PM.
    Free the dunston one next time too.
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