I asked what you would like to hear about, and one of the topics that came up was how to save for your kids’ futures, so here we go . . .
There are many options available to you for savings for your kids:
Bank accounts
You could open a bank account for your child(ren). Many banks do them and give the child rewards for saving. Not as cool as the old school Natwest Pigs obviously, but Metro Bank give £5 free if you have deposited money in the account over several months, plus other cool little gifts and lollies when you go into their branches. I’m sure other banks do other fun things for kids.
Go Henry
My kids are always asking for money, especially Alana, my 8 year old. She is constantly wanting to buy a new unicorn or snazzy car or amazing mansion on her iPad game called Roblux. These need real money, not just fake game money. How else can these electronic giants make their millions?!
It comes as a surprise to her that I am not made of money and don’t want to spend it all on her online games!!
So, I have set her and her brother up with Go Henry cards. These are debit cards that she can take to a shop and use online, but they are also linked to an app on my phone and their phones / iPads.
Every week £2 automatically goes onto their cards as their pocket money and they can earn extra money by doing chores / jobs. They are set up on their devices so they can see what they need to do and how much they will earn.
Alana came into me the other day asking for just one more pound. “Please Mummy, just one pound?” I made her clean her bathroom sink, empty her bathroom bin and sort out the many shampoo and conditioner bottles in her shower. £1 was then added to her account, which was promptly spent on a new car for her game.
Not only is this teaching my kids a valuable lesson about money and earning and spending it, but I get more chores done around the house without massive complaint. Who doesn’t love that? Plus, I do not have to have change every week to put into their ‘piggy banks’ as who has cash these days?
So, if you have children or grandchildren consider this for them as it has really helped our family.
Junior ISA
The Junior ISA (JISA) limit has been increased significantly this tax year to £9,000 pa.
If you invested that £9,000 each year between a child’s birth and their 18th birthday, growing at 3% net a year, you would have a pot of £217,000!! That’s a lot of money!!
However, do you trust your child at 18 with this sort of money? If in a JISA, at 18 they have control and access to it. I wouldn’t!! Even though I have been amazingly sensible throughout my whole life (cough, cough) I would not have trusted myself with this money at that age. Therefore, should you be trusting your child?
Wouldn’t it be safer in your own name so that you have control over it? You can then gift it your children when you think they need it. Maybe for university fees, buying a car, a house, their wedding. . . Just not wasted away on expensive things that hold no value and are lost in days if not seconds.
Remember the 19-year-old electronically tagged lottery winner who won £9.7 million, bought loads of Burberry (not forgetting the drugs, gambling and prostitutes) and was bankrupt within a few years?! Need I say more?
ISAs / General Investment Accounts
Put the money in your name but in an investment that you know is for your children so you can use that money for them in the future. Not in your children’s control so you can decide what it is for, you can change your mind at any time and not use it for them, and you can use your ISA allowance and capital gains allowance for it, thereby reducing any tax to pay on any growth.
Trusts
You could put money into trust for them. This way the money is set aside for them but isn’t in their name so they cannot get hold of it. It is also not in your name so is safe from bankruptcy, divorce and inheritance tax on death (depending on when you put it in). It is more complicated than having it just in an investment for yourself that you know is for your kids, but could be a good option depending on your circumstances.
