Childrens Finances

[GJOB]

Now that our little lump has been born we now need to set up accounts and savings etc

Being self employed muddies the water (i think).

Have been on NS&I and searched around.

Seem to be a lot of flash deals offering 6% but they're all borrocks as there is a maximum you can pay in monthly and the rate only lasts 12 months.

What do you guys and girls do for long term financial planning for your kids?

Do I just get a boggo account for granny and grandad to put money in or is there a smarter solution?

TIA
GJOB

[anonymous-user]

Get a Child ISA

[onedsla]

Outside of the JISA market, I found Northern Rock had the best 'simple' rate @ 3%.

[GJOB]

ISA makes sense for saving but aren't all the rates only 1% is after the first year?

NR @ 3% sounds worth a look.

I'm happy to split savings accounts with limited access and some fixed termers like bonds etc. Halifax have 5 year - 4.2% AER - Is that 4.2% average per year or 4.2% after 5 years??

[Cheib]

Unfortunately my kids were born before JISA's.....so they are stuck with CTF's which are pretty st in my opinion. Very high fee product....

It may sound daft but I have set up pensions for both my kids.....you can contribute approximately £3000 a year which gets grossed up at the rate of basic income tax. Obviously they can't touch it but when my kids are in their 20's and 30's with all sorts of financial pressures there will hopefully at least be something there that means they are ahead of the game on their pensions so there will be one less thing to worry about.

If I had the choice I would divide any money between the JISA and a Pension....

[tali1]

If you want long term (5yrs plus) -then stick them in stocks /shares isa - i have for 4 of my kids

[GJOB]

Thanks for that

I'll let ye know how I get on...

[aztec]

How about a pension, your allowed to put in £3600 per year and get basic rate tax relief, no better way of giving your kids a head start

[gmasterfunk]

I keep an eye open for my 2 yo. Personally used the 6% to get a lump sum by building up for a year remember you can usually open the account with a full months payment so you get just better than 3% approx overall. I just give her the child benefit money each month plus a bit. Not too bad after 18 years ....

Then went for an isa for her with the Max term to suit.

Loving the pension idea but I would like her to have access for uni or house deposit. probably only 1 years tuition by then though. Lol.

[GJOB]

Regarding Junior ISA's, can you open a new one each tax year or is it just a one off?

I notice they hold the money til they're 18 so it is a pretty long term commitment to tie up the money.

[Rufus]

If you are serious about it, do what we did and get properly drawn up trust funds, makes life an awful lot simpler later on. Otherwise, now is a great time to set up a long term stocks and shares ISA.

[GJOB]

Rufus said:

If you are serious about it, do what we did and get properly drawn up trust funds, makes life an awful lot simpler later on. Otherwise, now is a great time to set up a long term stocks and shares ISA.

simpler in what way? and what rate of return are you hoping for?

[voicey]

Cheib said:

Unfortunately my kids were born before JISA's.....so they are stuck with CTF's which are pretty st in my opinion. Very high fee product....

It may sound daft but I have set up pensions for both my kids.....you can contribute approximately £3000 a year which gets grossed up at the rate of basic income tax. Obviously they can't touch it but when my kids are in their 20's and 30's with all sorts of financial pressures there will hopefully at least be something there that means they are ahead of the game on their pensions so there will be one less thing to worry about.

If I had the choice I would divide any money between the JISA and a Pension....

We opened a stakeholder pension for my daughter when she was born (18 months ago). We maxed it out in the first year and any money that grand parents want to gift her going forward will go into it. With any luck it'll stand her in good stead in (many) years to come.

[Rufus]

GJOB said:

Rufus said:

If you are serious about it, do what we did and get properly drawn up trust funds, makes life an awful lot simpler later on. Otherwise, now is a great time to set up a long term stocks and shares ISA.

simpler in what way? and what rate of return are you hoping for?

Theres no complicated get out clauses etc, and each child knows exactly what they've got as it is all in one place, and there is someone paid to manage it properly and if the young ones are interested, they can have their say, if they aren't then they can take advice on what is best for them. My family stockbroker was been in charge of my parents money, is in charge my money and the children's money and when we married started looking after my wife's money too. He knows what the 'goal' is as it were and the transition of money through the generations is very simple and can be well managed to avoid inheritance tax as much as possible. It may seem very extreme to be thinking of things like this just as they are being born, but having good systems in place now means the difficult times later on are made much easier.

[Cheib]

voicey said:

Cheib said:

Unfortunately my kids were born before JISA's.....so they are stuck with CTF's which are pretty st in my opinion. Very high fee product....

It may sound daft but I have set up pensions for both my kids.....you can contribute approximately £3000 a year which gets grossed up at the rate of basic income tax. Obviously they can't touch it but when my kids are in their 20's and 30's with all sorts of financial pressures there will hopefully at least be something there that means they are ahead of the game on their pensions so there will be one less thing to worry about.

If I had the choice I would divide any money between the JISA and a Pension....

We opened a stakeholder pension for my daughter when she was born (18 months ago). We maxed it out in the first year and any money that grand parents want to gift her going forward will go into it. With any luck it'll stand her in good stead in (many) years to come.

I think it's a great thing to do...actually just made an investment on their behalf today in their pensions. The nice thing is that because it is such a long time horizon you can take very considered risk decisions.

[voicey]

Cheib said:

voicey said:

Cheib said:

Unfortunately my kids were born before JISA's.....so they are stuck with CTF's which are pretty st in my opinion. Very high fee product....

It may sound daft but I have set up pensions for both my kids.....you can contribute approximately £3000 a year which gets grossed up at the rate of basic income tax. Obviously they can't touch it but when my kids are in their 20's and 30's with all sorts of financial pressures there will hopefully at least be something there that means they are ahead of the game on their pensions so there will be one less thing to worry about.

If I had the choice I would divide any money between the JISA and a Pension....

We opened a stakeholder pension for my daughter when she was born (18 months ago). We maxed it out in the first year and any money that grand parents want to gift her going forward will go into it. With any luck it'll stand her in good stead in (many) years to come.

I think it's a great thing to do...actually just made an investment on their behalf today in their pensions. The nice thing is that because it is such a long time horizon you can take very considered risk decisions.

Indeed - I chose some pretty funky funds for her!