Saving for our child’s future

[W201_190e]

Our first child, a girl, is due in a few weeks. My wife and I would like to start a savings account for her to make available at an appropriate age so she can put a deposit down on property, or for travelling or education… or anything else worthwhile really. Other than just opening a normal savings account is there anything more beneficial we can do that will benefit her when the time is right?

We aren’t talking huge amounts here, it would only grow by a few hundred pounds a year as we don’t have much money ourselves. But want to do our best for her. Would appreciate any suggestions!

[Edible Roadkill]

Stick it n an isa which you have control of.

Any kids specific savings account transfers into their name to use as pleased from age 16-18 and for all intensive purposes’s they might be able total s at that age and blow your intended college/1st house fund on an all inclusive summer of debauchery in Ibiza.

[B9]

I’ve approached three ways

Pension in their name. I contribute only a small amount per month but it’ll be a great headstart for them when they’re 18

ISA in their name. They will have access to when they’re 18. I’lol stop contributing when they’re 5 and allow this to compound. They’ll be aware of this and I hope to use it to teach them fundamentals of saving

Partition of my ISA. They won’t be aware of this but it’ll be towards house deposit etc. I’ve created a separate fund in my ISA so it’s easy to track. Allows me control if, for example, they splurge their ISA

[GR86]

I am doing a stocks and shares ISA using a global tracker hoping it will keep up with inflation.

[bitchstewie]

Edible Roadkill said:

Stick it n an isa which you have control of.

Any kids specific savings account transfers into their name to use as pleased from age 16-18 and for all intensive purposes’s they might be able total s at that age and blow your intended college/1st house fund on an all inclusive summer of debauchery in Ibiza.

Of course the counter view to this is that some parents will decide it's acceptable to dip into their childs savings when the gutters need doing or some emergency comes up which is why it's arguably better to have it in the childs name where it's out of reach.

[Aunty Pasty]

There are junior ISAs available. They won't be able to access it until 18.

[okgo]

Edible Roadkill said:

Stick it n an isa which you have control of.

Any kids specific savings account transfers into their name to use as pleased from age 16-18 and for all intensive purposes’s they might be able total s at that age and blow your intended college/1st house fund on an all inclusive summer of debauchery in Ibiza.

Wouldn’t this not work if you wanted to pay into your own isa that year?

Or are you proposing to use a year of your allowance then never touch it?

[fat80b]

okgo said:

Wouldn’t this not work if you wanted to pay into your own isa that year?

Sure - if you’ve maxed out your own ISA and your partner’s ISA, then you probably have a good kind of problem.

Me personally, I agree that you are better off building your own pots rather than put things in the kids names that they get access to at 18.

A lot can happen between now and then

[anonymous-user]

Kids ISA's all in there name, few quid a month. Just forget about it now.

[dingg]

I contribute 100 quid a month to a j isa, in my account under my gsons name, should either be enough for a deposit for his first house, a car or uni fees, all depends on the next 14 years, he's 4 at present. I have informed our daughter best not to tell him its there....

[okgo]

fat80b said:

Sure - if you’ve maxed out your own ISA and your partner’s ISA, then you probably have a good kind of problem.

Me personally, I agree that you are better off building your own pots rather than put things in the kids names that they get access to at 18.

A lot can happen between now and then

Even if you don’t max it, you can only pay into one product a year can’t you? So how do you propose it works?

I’ve got an old ISA from years ago that I am planning to start a JISA with. Can’t be that hard to keep a letter with Vanguard written on it from someone until they’re a bit more mature

[fat80b]

okgo said:

Even if you don’t max it, you can only pay into one product a year can’t you? So how do you propose it works?

I’m proposing that you are better off saving in your own products for the next 18 years as opposed to having anything in the child’s name. No need for multiple ISAs

I.e. You save in your ISAs and pensions (or whatever products you want) to build your pot.

When the time comes, you choose how to spend it on / gift it to the child. House, education, coke and hookers, etc - my way, the choice remains in your hands.

Only if you are going to max both your ISAs today does it make sense to open one in the child’s name

[VR99]

I opened a JISA, same platform as my SIPP so easy to manage with minimum hassle and invested into a cheap global fund. My wife and I have agreed we will conveniently 'forget' to mention it to our son till he is mature enough to hopefully put it to good use...we hope..if not might need to keep it under wraps longer though appreciate once he hits 18 then legally it's 'his'.

[projectgt]

What is the maximum I can save in ISAs?

I understand it’s £20,000 per annum, but is there a total cap.

[fat80b]

projectgt said:

What is the maximum I can save in ISAs?

I understand it’s £20,000 per annum, but is there a total cap.

Currently 20k each with no total cap on either lifetime contributions or growth.

Although there are rumours (after a think tank suggested) that this may change in the near future.

You can always drop 40k in before April and 40k after if this is a problem

[Armitage.Shanks]

VR99 said:

I opened a JISA, same platform as my SIPP so easy to manage with minimum hassle and invested into a cheap global fund. My wife and I have agreed we will conveniently 'forget' to mention it to our son till he is mature enough to hopefully put it to good use...we hope..if not might need to keep it under wraps longer though appreciate once he hits 18 then legally it's 'his'.

Very wise. If I'd have done any investment planning for my daughter it would have gone straight on a Lamborghini so I did nothing. she's stood on her own feet, OK I've helped a little along the way but she's actually matured saying she hopes we spend all our savings and investments before we die and what's left ie the house she'd be more than happy. Same viewpoint to her Grandma who is leaving her estate to all the grandkids, including those (in fact all bar my daughter) she hasn't seen for over 30yrs and have contributed not one jot to looking after her needs. I'm sure they'll be happy enough to keep the beer flowing on Weatherspoons.

[alfabeat]

It is so worth doing. We have done £100 a month since birth for our kids into the now defunct Child Trust Fund scheme. When they turn 18 in the next 2 to 7 years, they will have a great start with about £30k each.

The aim is for them to use this for uni living costs / rent if they go. If they don't go, then they will hopefully use it for a house deposit or something worthwhile.

[Armitage.Shanks]

alfabeat said:

The aim is for them to use this for uni living costs / rent if they go. If they don't go, then they will hopefully use it for a house deposit or something worthwhile.

Just expect £30k to be swallowed up in university rents. I paid out more than that and still my daughter left with £75k loan outstanding even though she could only get the minimum maintenance loan because there was no point in disclosing my income being over the limit. Despite any 'advice' about borrowing the maintenance loan if they don't really need it 18yr olds are adults and will make their own minds up. Plus someones got to keep the Student Union bar busy!

Will the £75k ever get paid back? I very much doubt it, and certainly not by me. Mrs Shanks once suggested I pay all the tuition fees off

[Big Stevie]

I opened a bank account for my son when he was born 16 yrs ago, it was with Halifax paying 10% but that rate dropped over the years.
About 3yrs ago I moved £5k of it into a Hargreaves stocks & shares ISA in my name, which has made about £1k.
Also took out the governments offering of a Child Trust Fund and pay £10/month into that, but that hasn't done so well.
All in all he has about £7k to his name which he doesn't know about yet.

If I was doing it again I would start a pension for him, from birth, which I always meant to do but never did. His £7K in savings isn't bad, but I think he would have had more benefit from having a pension started early in life, due to compounded interest. After all, at the point he needs his £7k I would be able to gift it him from my savings, but the lost interest of a pension he never had cant be made back so easily.

[OutInTheShed]

Consider 'investing' in non-monetary ways, like education. And I don't just mean formal school-based education.

Having a modest pot of money you can access at any time might make a difference.

Don't rush to tie money up, unless the advantages are massive and guaranteed.

Think twice before taking advice from people like me, and others on here!