Β£1000 to lock away for 15 years. Children's money.

Β£1000 to lock away for 15 years. Children's money.

Author
Discussion

rufusgti

Original Poster:

1,918 posts

136 months

Wednesday 17th July
quotequote all
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.

KTF

8,318 posts

94 months

Wednesday 17th July
quotequote all
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.

Zoon

4,161 posts

65 months

Wednesday 17th July
quotequote all
Coventry Building Society Junior Cash ISA 3.6%
NSandI Junior Cash ISA 3.25% if you cannot be arsed to mess about waiting for Coventry to send you a form in the post and want to open online.

KTF

8,318 posts

94 months

Wednesday 17th July
quotequote all
As a comparison I have our offsprings JISA in VLS 80 and its up nearly 7% since I transferred over in May from Orbis..

rsbmw

2,607 posts

49 months

Wednesday 17th July
quotequote all
I keep our kids JISAs invested in VLS80 too, prefer to take a bit of risk and actually earn some interest over 15+ years than receive interest rates below inflation from a bank and actually lose money.

Zoon

4,161 posts

65 months

Wednesday 17th July
quotequote all
rsbmw said:
I keep our kids JISAs invested in VLS80 too, prefer to take a bit of risk and actually earn some interest over 15+ years than receive interest rates below inflation from a bank and actually lose money.
Or you can get rates above inflation with no risk as above.

rsbmw

2,607 posts

49 months

Wednesday 17th July
quotequote all
Barely above inflation, granted.

river_rat

460 posts

147 months

Wednesday 17th July
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My 5 years old daughter's is in an even mix of VLS80 and VLS100 - up over 11% since Nov 18.

My 9 years old son's more recently put in an Intelligent Money JISA.

louiebaby

8,991 posts

135 months

Wednesday 17th July
quotequote all
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?

JulianPH

4,215 posts

58 months

Wednesday 17th July
quotequote all
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! biggrin

A mixture of the two is probably the best approach, in my humble opinion.

louiebaby

8,991 posts

135 months

Wednesday 17th July
quotequote all
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! biggrin

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.

There's no need to tell them about the pension until they're 30, after all!

smile

JulianPH

4,215 posts

58 months

Wednesday 17th July
quotequote 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! biggrin

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.

There's no need to tell them about the pension until they're 30, after all!

smile
There is no need to tell them about the ISA either...!!!

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.

peterperkins

2,167 posts

186 months

Wednesday 17th July
quotequote all
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..

Croutons

3,572 posts

110 months

Wednesday 17th July
quotequote all
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! biggrin

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?

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.

Narcisus

4,557 posts

224 months

Wednesday 17th July
quotequote all
Buy Lego. Seriously...

mike9009

4,154 posts

187 months

Wednesday 17th July
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Narcisus said:
Buy Lego. Seriously...
A £1000 worth, each?

BoRED S2upid

15,149 posts

184 months

Wednesday 17th July
quotequote all
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.

denzilpc

122 posts

119 months

Wednesday 17th July
quotequote all
invested £1000 t each of mine in premium bonds, you never know !

Narcisus

4,557 posts

224 months

Wednesday 17th July
quotequote all
mike9009 said:
Narcisus said:
Buy Lego. Seriously...
A £1000 worth, each?
Yes I’ve been buying the odd carefully chosen set with my daughters money for the past 10 years.

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 !

rufusgti

Original Poster:

1,918 posts

136 months

Wednesday 17th July
quotequote all
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 👍