Protecting kids meagre savings from inflation.

[BikeBikeBIke]

Young kids, about £1500 savings each. I want instant(ish) access but overwhelming likelihood is their cash won't be touched for 5 or ten years. This isn't future house/university money, it's "buy a bike or kayak" when they're 15 money to enable them to make some medium sized financial decisions for themselves as kids.

Don't want a regular saver.

I'm starting to think buying them each a gold sovereign/Krugerrand and keeping it in the the loft is a better plan than letting a decade of inflation and near zero interest rates erode it.

I'm lazy. (I did consider 'selling' them an interest in my BTL and working out their profits in an ad hoc fashion but I really can't be bothered and if I forget I'm stealing money off my kids which I'd like to avoid!)

We're not talking large sums of money, maybe I should periodically work out inflation and just make it up into their accounts myself....

What should I do?

[alscar]

Premium bonds -probably won't win on that amount but they might and its 100% safe obviously albeit won't deal with inflation ?
Best instant access currently going to be around 1% ish but will no doubt be increasing.
Marcus ( on line ) is around 1.35%.
Only other thought - create a Stock market account with the likes of BMO , Fidelity etc and buy some funds -do nothing with them an see when bike and kayek time comes up ?

[OutInTheShed]

ISA with a selection of shares or funds?

[alscar]

Yup - JISA ie in their name with you as the trustee etc and then simply transfer the Trusts when 18 if money remains then - annual charges will apply but from memory these are fairly small.

[bigandclever]

alscar said:

Yup - JISA ie in their name with you as the trustee etc and then simply transfer the Trusts when 18 if money remains then - annual charges will apply but from memory these are fairly small.

How does he get money out when the kids are 15, which is the OP's consideration? JISAs don't allow withdrawal before 18.

[BoRED S2upid]

alscar said:

Premium bonds -probably won't win on that amount but they might and its 100% safe obviously albeit won't deal with inflation ?
Best instant access currently going to be around 1% ish but will no doubt be increasing.
Marcus ( on line ) is around 1.35%.
Only other thought - create a Stock market account with the likes of BMO , Fidelity etc and buy some funds -do nothing with them an see when bike and kayek time comes up ?

My son has won a few times on a couple of grand far higher return than any bank or cash isa. Plus someone has to win a million every month imagine if it was your son off £1500!!!

[gotoPzero]

Markets have taken a bashing the last 3 months.

If it was me, with a 10 year outlook I would slap the lot in an ISA with Vanguard S&P500 and take a punt.

If you leave it in NS&I in 10 years your 1500 is going to be.... well probably 1500.

Which is going to be worth a lot less in real terms than now.

I would roll the dice. It would also be a great lesson to them (if it makes money) that long term investing is a good idea as you can say look I put £1500 in 10 years ago and now its worth £3000 (or whatever).

(same applies if it loses money!)

[Glosphil]

Coventry - 2.5% & add up to £500 per month. Always this type of account around & simple to change to another as each closes.

[alscar]

Big , ah my bad - didn’t realise you cannot take out pre 18.
Could still put into various funds under a General account still in their name though I guess although obviously then loses the tax free nature.

[OutInTheShed]

Could do an ISA in your name, if you are not using your allowance.

Can you just do a fund and share account in their name? (e.g. HL), as the tax is unlikely to matter?

Or buy gold.