Children’s saving accounts

[Paddy1000111]

10 hours ago, dreish said:

Really useful information given so far, one thing that I’m not sure of is when to make the cash available for the kids. 
 

I know if I had been given any cash before I was probably at least 23 , It would Not have been spent wisely.

It's tough but it's all based on them personally. You could give it to someone who's 25 and they could keep it safe and use it wisely or you could give it to someone who's 40 and they could go an buy a motorbike and kill themselves on the first trip. It's also dependant on the amount, I think the more it is the more wisely it's cared for. I inherited some money from my grandfather at 24 and I never used it for anything but big business investments where the finance would be a killer or property as I knew taking £10 out the fund would lead to £100 then then £1000 then more. There were times I was "skint" but never used that money as I knew it would be a slippery slope. 

Edited April 1, 2021 by Paddy1000111

[Steve Bullman]

17 minutes ago, dreish said:

Really useful information given so far, one thing that I’m not sure of is when to make the cash available for the kids. 
 

I know if I had been given any cash before I was probably at least 23 , It would Not have been spent wisely.

I wish I hadn’t set mine to 18. In fact I wish id just set up an account in my name that I could give them at a time that I felt right, ie for setting up a business or a deposit on a house. My eldest turns 18 in July, I hope he doesn’t spunk the lot on a car and add ons like all his mates are doing. He says he wants to save though and I’m pushing him hard to reinvest it in an isa. I’d rather him do that and I buy him his first car 

[dreish]

My kids are in a very fortunate position financially- Not I must add from my earnings.  All I will try and do is steer them as best I can , but I know full well that at some stage they will ‘know’ best  and sample the world. I would rather they did that on a budget . 

[Paddy1000111]

4 minutes ago, dreish said:

My kids are in a very fortunate position financially- Not I must add from my earnings.  All I will try and do is steer them as best I can , but I know full well that at some stage they will ‘know’ best  and sample the world. I would rather they did that on a budget . 

Maybe just keep it in your name and nurture it yourself if you're concerned? Let it grow and if they want to buy a house it will make a big difference? The only reason for them to have it in their name is to spend it themselves or to put their feet up about saving for a deposit? 

 

[Lloyd Jerrey]

Good responses chaps, thank you.

Her money is currently in premium bonds and won a couple of £25 but that’s it.

The “what if” of winning a larger sum is obviously very appealing but not guaranteed and I want to maximise her money with definite growth.

Have friends who have done well with Bitcoin but it’s too risky for me to invest her money in (plus seems a bit late to the show now) happy to do my own but not hers. Been on waiting list to open a trading 212 account for a few months now (it’s seriously backdated due to the Gamestop chaos), but still waiting so maybe a separate thread on investments might be in order when I do get the account set up.

I like the junior ISA’s as they are guaranteed growth and safe. But I also have the temptation of maybe splitting it half and 50% lump sum + monthly direct debit to a junior ISA and 50% of the deposit + monthly direct debit to an investment ISA, maybe starting at high risk then reducing to medium risk after 10-15 years then as it gets closer to cashing it in move to a low risk strategy.

This way half of her money has the “potential” for some decent growth and the other half still is safe with a fixed guaranteed interest.

[Lloyd Jerrey]

Good subject this and congratulate you on sorting it out and hope your ethic flows down to your kids through their lives.
20 years is a good long time to save money over and compound growth is your friend.
Compound growth is where you re-invest your earnings through dividends, interest or whatever and it increases the pot so has a much stronger impact than taking an income.
I would stick the £4K in an equity ISA as they are a great way of tax free saving, the money going in may be taxed but when you have a good large pot, you can take money out with no tax implications.
A decent ISA should be able to double its value every 7 years so in 21 years you should be able to double your £4k and double that then double that in the 21years period. There are no guarantees to this as equity can go up or down but long term, it makes a lot of sense. 
You may like to start in relatively safe European and UK funds but as they get bigger, look at China, Japan, Tech and North American funds. ISAs or its forerunner PEPs were predominantly UK based funds but that has now expanded. 
One caveat to this is that equity has had a long bull run so you could wait a bit and invest if you see a major decline in share price but.....you have to be in it to see the growth over time!
Personally I would avoid any funds managed by banks etc. Do your research, select a fund and invest through a platform such as Interactive Investor as they charge very low administration fees but they will NOT advise you.
My late father did exactly this for my nieces and £1000 grew to £6k in under 18 years....work it out!!!

Brilliant post thank you

[topchippyles]

4 minutes ago, Lloyd Jerrey said:

Good responses chaps, thank you.

Her money is currently in premium bonds and won a couple of £25 but that’s it.

The “what if” of winning a larger sum is obviously very appealing but not guaranteed and I want to maximise her money with definite growth.

Have friends who have done well with Bitcoin but it’s too risky for me to invest her money in (plus seems a bit late to the show now) happy to do my own but not hers. Been on waiting list to open a trading 212 account for a few months now (it’s seriously backdated due to the Gamestop chaos), but still waiting so maybe a separate thread on investments might be in order when I do get the account set up.

I like the junior ISA’s as they are guaranteed growth and safe. But I also have the temptation of maybe splitting it half and 50% lump sum + monthly direct debit to a junior ISA and 50% of the deposit + monthly direct debit to an investment ISA, maybe starting at high risk then reducing to medium risk after 10-15 years then as it gets closer to cashing it in move to a low risk strategy.

This way half of her money has the “potential” for some decent growth and the other half still is safe with a fixed guaranteed interest.

Martin lewis money saving expert is about the best to look at 

[IRE David H]

how do people feel about 60/40 eg  In a 60-40 portfolio, 60% of assets are invested in stocks and 40% in bonds—often government bonds. The reason it has been popular over the years is that traditionally, in a bear market, the government bond portion of a portfolio has functioned as insurance by providing income to cushion stock losses.

 

it cant loose money unless every share and stock fails and as you spread the money over alot of stocks, i think it gives a great return and is nicknamed 60/40 no brainers a radio financial guru is always on about in ireland. 

 

We dont have isa in ireland sadly

 

 

Edited March 31, 2021 by IRE David H

[spudulike]

20 hours ago, topchippyles said:

Martin lewis money saving expert is about the best to look at 

As much as I like the bloke for championing the underdog, he doesn't do the Pensions, ISAs, share thing on his TV program and openly states so.

As much as saving £125 on your yearly heating bill is good, cracking on with a pension as young as possible and making as much use of tax free investments is a much bigger game changer if done earlier enough in life.