The best children's savings accounts 2015
When you're juggling a mortgage, credit cards, energy bills and other household finances, putting money aside for your children can often feel like a bit of a stretch. We all know it's the sensible thing to do - but it's also one of the first things to fall by the wayside when money gets tight.
But kick-starting your children's finances is crucial. Not only might it help them get through university, buy their first car or get a foothold on the property ladder, it can also teach them how to manage their money. With so many adults in debt, helping your child to become fiscally responsible could ensure the next generation does not repeat the mistakes of the generation before.
The earlier you start, the easier it will be to grow your children's savings.
So whether you're putting aside birthday money your children have been gifted or you are ready to start a more meaningful savings or investment plan, here's our look at the best children's savings products on the market.
Available from 1 November 2011, the Junior ISA will replace child trust funds (CFTs), which have been phased out. Junior ISAs will have a £3,000 limit and will be offered by high street banks, building societies and other providers that currently offer ISAs to adults. You can invest in either stocks and shares or cash. But, unlike CTFs, there will be no government contributions into each child’s savings pot. Money invested in Junior ISAs will be “locked in” until the child is 18, and the ISA will default to an adult one.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.