£1000 to lock away for 15 years. Children's money.
Discussion
Hi
I have two children of five and seven. I've been putting a bit away each month over the last couple of years and both have Halifax young savers accounts recieving 1.98%. Both are now approaching £1000 and I would like to maximize interest as it's certainly not going to be needed for at least 10-15 years.
From what I know about investing it's safe to say the money is not going to do well with a high street bank or building society. I've been wondering about some kind of global equity fund. Nothing too risky but something that should plod along and appreciate over the years with a bit of luck. I can probably add around 200-300 pounds for each child each year and can do that as a one off payment or drip feed monthly.
Can anyone share any experience they may have had with similar figures. I appreciate some funds would not be worth the fees for small amounts. Although I could have an account in my own name with both lots in if that was more tax efficient. I'm a 20% tax payer if that helps.
Many thanks.
I have two children of five and seven. I've been putting a bit away each month over the last couple of years and both have Halifax young savers accounts recieving 1.98%. Both are now approaching £1000 and I would like to maximize interest as it's certainly not going to be needed for at least 10-15 years.
From what I know about investing it's safe to say the money is not going to do well with a high street bank or building society. I've been wondering about some kind of global equity fund. Nothing too risky but something that should plod along and appreciate over the years with a bit of luck. I can probably add around 200-300 pounds for each child each year and can do that as a one off payment or drip feed monthly.
Can anyone share any experience they may have had with similar figures. I appreciate some funds would not be worth the fees for small amounts. Although I could have an account in my own name with both lots in if that was more tax efficient. I'm a 20% tax payer if that helps.
Many thanks.
A Junior ISA is worth looking in to. I have set one up for our 18 month old and every month his child allowance (plus other top ups) go in and will be left there until it becomes his at 18.
High level details of what they are here: https://www.moneysavingexpert.com/savings/junior-i...
Post in the Intelligent Money thread and Julian will be able to give you more detail based on your circumstances if needed.
High level details of what they are here: https://www.moneysavingexpert.com/savings/junior-i...
Post in the Intelligent Money thread and Julian will be able to give you more detail based on your circumstances if needed.
louiebaby said:
This thread is of interest for me.
Another option I'd considered is to start the kids a pension. At least then I know they won't go out and chuck it all away on beer at university at 18.
Is it a valid option?
Perfectly valid. They will hate you for not being able to access until 10 years before state retirement, but then love you again when they see the benefits of c. 50 years of compound growth though! Another option I'd considered is to start the kids a pension. At least then I know they won't go out and chuck it all away on beer at university at 18.
Is it a valid option?
A mixture of the two is probably the best approach, in my humble opinion.
JulianPH said:
Perfectly valid. They will hate you for not being able to access until 10 years before state retirement, but then love you again when they see the benefits of c. 50 years of compound growth though!
A mixture of the two is probably the best approach, in my humble opinion.
It's what I'd considered. Although I have very modest sums to give them, I think it has a deal of sense associated with it. Perhaps an 80:20 split of pension:fund.A mixture of the two is probably the best approach, in my humble opinion.
There's no need to tell them about the pension until they're 30, after all!
louiebaby said:
JulianPH said:
Perfectly valid. They will hate you for not being able to access until 10 years before state retirement, but then love you again when they see the benefits of c. 50 years of compound growth though!
A mixture of the two is probably the best approach, in my humble opinion.
It's what I'd considered. Although I have very modest sums to give them, I think it has a deal of sense associated with it. Perhaps an 80:20 split of pension:fund.A mixture of the two is probably the best approach, in my humble opinion.
There's no need to tell them about the pension until they're 30, after all!
I don't think the sum matters. It is both a head start and a valuable lesson, regardless of the amount involved.
You are doing the right thing (I don't just mean just financially, but in general) and that is all that really matters.
Pension is an interesting idea, but what if the unthinkable happens and they die? Is the money gone?
OK I appreciate the money won't be important in context of the bereavement, but it could be a substantial sum.
If married/children then of course some rights might exist for dependants/widows etc. But if none of above apply what happens?
A saving account/isa is money that is part of the estate..
OK I appreciate the money won't be important in context of the bereavement, but it could be a substantial sum.
If married/children then of course some rights might exist for dependants/widows etc. But if none of above apply what happens?
A saving account/isa is money that is part of the estate..
JulianPH said:
Perfectly valid. They will hate you for not being able to access until 10 years before state retirement, but then love you again when they see the benefits of c. 50 years of compound growth though!
A mixture of the two is probably the best approach, in my humble opinion.
10 years before state retirement age you say. Does this mean the legislation to effect that mere proposal has been enacted?A mixture of the two is probably the best approach, in my humble opinion.
Or is it still currently the case that you can take a private pension at 55?
I appreciate change may occur, but I would think it quite important we distinguish between what might happen, and what IS the case.
peterperkins said:
Pension is an interesting idea, but what if the unthinkable happens and they die? Is the money gone?
OK I appreciate the money won't be important in context of the bereavement, but it could be a substantial sum.
If married/children then of course some rights might exist for dependants/widows etc. But if none of above apply what happens?
A saving account/isa is money that is part of the estate..
If they die they can leave it to you or their sibling doesn’t have to be a partner or dependent like with our pensions. OK I appreciate the money won't be important in context of the bereavement, but it could be a substantial sum.
If married/children then of course some rights might exist for dependants/widows etc. But if none of above apply what happens?
A saving account/isa is money that is part of the estate..
mike9009 said:
Narcisus said:
Buy Lego. Seriously...
A £1000 worth, each?Never failed to double my money at least.
All goes back into her bank. Like to see £300 put in any bank make 6 or 700 after 4 or 5 years !
Thanks very much for all the replies. I'd not spotted the ns&i junior accounts, will take a look at that. And I'll be checking the vanguard as that's popped up elsewhere also.
I won't be buying Lego as the idea makes me nauseous 🤢😷
I had a great uncle who was a mean old git. He had an attic full of boxed original kids toys that his kids, grandkids, anyone! were banned from touching because "they'll be worth a fortune one day". I'm not sure what message that is teaching children. Maybe something of value but I can't think what. Each to their own though 👍
I won't be buying Lego as the idea makes me nauseous 🤢😷
I had a great uncle who was a mean old git. He had an attic full of boxed original kids toys that his kids, grandkids, anyone! were banned from touching because "they'll be worth a fortune one day". I'm not sure what message that is teaching children. Maybe something of value but I can't think what. Each to their own though 👍
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