Savings accounts for kids
Discussion
The grandparents have kindly offered to give our 2 kids a small amount of money each month (not sure on the exact amount, but not likley to be more than £50 a month each).
They would like to pay a fixed regular amount each month.
They would like the account to be inaccessible until they both reach a milestone birthday (probably 18... eldest is currently 3 and youngest is 12 weeks!).
Not sure of the best product to meet these criteria.
Would a junior ISA be best?
As parents, we are happy to open the a/c on behalf of the grandparents and they would simply transfer the £ by monthy standing-order once we've shared the bank a/c details with them.
They would like to pay a fixed regular amount each month.
They would like the account to be inaccessible until they both reach a milestone birthday (probably 18... eldest is currently 3 and youngest is 12 weeks!).
Not sure of the best product to meet these criteria.
Would a junior ISA be best?
As parents, we are happy to open the a/c on behalf of the grandparents and they would simply transfer the £ by monthy standing-order once we've shared the bank a/c details with them.
Jockman said:
Set up a pension for them. The £50 will be made up to £60 each month by the Govt. you can take over the contributions when the grandparents are no longer able to do so 
I disagree with this, you (and later your children) have no flexibility with this and it will be locked away for at least 60 years. What about if this money would be more useful earlier for say a house deposit or if not it can be put in a pension at a later date, yes they've lost the extra earnings on the 20% government contributions but I think that this is a price worth paying for the flexibility (and I'm really tight!!)Thanks all.
Think a pension is too long-term.
The grandparents would have a good chance of still being around and seeing their savings mature when the kids turn 18, so would like to see the money being used for something worthwhile (put toward a house deposit, university fees, or whatever).
Think a pension is too long-term.
The grandparents would have a good chance of still being around and seeing their savings mature when the kids turn 18, so would like to see the money being used for something worthwhile (put toward a house deposit, university fees, or whatever).
Charlie1986 said:
ive been lucky enough to come in to some money recently and im looking at ISA's for my daughter who is 3. Is the maximum same as a adult £15,240?
No.£4,080 limit.
http://www.hl.co.uk/investment-services/junior-isa
In respect of pensions, if a new parent is in their 40s, then investing the money into a pension *can* work. But not in the child's name.
Pension contributions are outside an estate for IHT purposes (unless the wretched IHT 409 applies), you can still get tax relief (possibly, at that age higher rate tax relief) to compound growth quickly and you still can mentally set aside the additional amounts that are going in (for later allocation). I'm not saying it's right for everyone, but it's a possibility to at least consider and/or reject.
https://www.gov.uk/government/publications/inherit...
Pension contributions are outside an estate for IHT purposes (unless the wretched IHT 409 applies), you can still get tax relief (possibly, at that age higher rate tax relief) to compound growth quickly and you still can mentally set aside the additional amounts that are going in (for later allocation). I'm not saying it's right for everyone, but it's a possibility to at least consider and/or reject.
https://www.gov.uk/government/publications/inherit...
SunsetZed said:
I disagree with this, you (and later your children) have no flexibility with this and it will be locked away for at least 60 years. What about if this money would be more useful earlier for say a house deposit or if not it can be put in a pension at a later date, yes they've lost the extra earnings on the 20% government contributions but I think that this is a price worth paying for the flexibility (and I'm really tight!!)
No problem with your disagreement..The inflexibility is exactly what appeals to me. God forbid that your child should actually save for their own house deposit.
It's also extremely unlikely that you will be the only person saving for that child. There's absolutely no harm in being the quiet one in the background churning away at a future retirement pot that you will never see. Let someone else take the plaudits for the house deposit. Let another person be the beneficiary of adulation for that first car purchase.
As I say, no probs with your disagreement. We're all different in our outlooks.
Ginge R said:
In respect of pensions, if a new parent is in their 40s, then investing the money into a pension *can* work. But not in the child's name.
Pension contributions are outside an estate for IHT purposes (unless the wretched IHT 409 applies), you can still get tax relief (possibly, at that age higher rate tax relief) to compound growth quickly and you still can mentally set aside the additional amounts that are going in (for later allocation). I'm not saying it's right for everyone, but it's a possibility to at least consider and/or reject.
https://www.gov.uk/government/publications/inherit...
Ginge I am only permitted to claim tax relief at 20%. I have never been able to claim at the higher rate as I am contributing for someone else. Pension contributions are outside an estate for IHT purposes (unless the wretched IHT 409 applies), you can still get tax relief (possibly, at that age higher rate tax relief) to compound growth quickly and you still can mentally set aside the additional amounts that are going in (for later allocation). I'm not saying it's right for everyone, but it's a possibility to at least consider and/or reject.
https://www.gov.uk/government/publications/inherit...
If this is incorrect please feel free to pm me as I will have an absolute shed load to reclaim.
This is what I have in place...
The Halifax 6% (used to be 10%
) regular saver is great but limited to £100 per month.
So after that I fund an S&S ISA in global equities, used to be a CTF.
She has a fair old chunk in NS&I Childrens Bonds too funded by gifts/the reg saver above.
Recently started a pension for her but I should add it is the smallest of all her saving plans. Never to early to start
Over the years we took advantage of 4% bonds from the Halifax which no longer exist
Cheers
The Halifax 6% (used to be 10%
) regular saver is great but limited to £100 per month. So after that I fund an S&S ISA in global equities, used to be a CTF.
She has a fair old chunk in NS&I Childrens Bonds too funded by gifts/the reg saver above.
Recently started a pension for her but I should add it is the smallest of all her saving plans. Never to early to start
Over the years we took advantage of 4% bonds from the Halifax which no longer exist
Cheers
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