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Investing for grandchildren

(26 Posts)
LyndaW Fri 07-Aug-15 07:46:06

I've got two DGCs birthdays coming up. They have a lot of toys already - and they're both having parties so are sure to get loads more from their friends. Although I love watching them open gifts I'm wondering if doing something more longterm would be better. Does anybody else prefer to give money for savings instead of gifts? My one son has junior isas set up for his children but the other not. Thinking I might start my own savings account for them. Does anybody already do this? Would it have to be in my name or theirs? I don't want the money to 'get lost' and end up getting spent on more toys. I'd rather it went towards their future.

Maggiemaybe Fri 07-Aug-15 08:01:55

We leave it to the parents. We've set a limit for birthdays and give the DGS one present to open, then hand the balance over to the DC to use as they see fit. If they want to use it for shoes (for the children smile) or the holiday fund, that's fine by us. They all have premium bond accounts, so we'd put any extra into them. I know the returns aren't usually great - though ours are running at 4% pa at the moment - but there's always the chance of a decent prize.

Nelliemoser Fri 07-Aug-15 08:48:43

LyndaW I worry about the masses of toys etc my DGs has already has and how something less transient like savings would be more useful than presents "for the sake of it."

Having been asking her to open a junior savings account since DGS1 was born I eventually got DD to get round to opening open a Junior ISA when she was on mat leave with DGC2. I need her to get on and open one for new baby.
Maggiemaybe I think that is the best way to go.

jinglbellsfrocks Fri 07-Aug-15 09:14:43

I top up their Isas each April, but I will never forego the delight of seeing their faces when they open our present to them.

This year for the 10 year old, it was Minecraft Lego. I will never forget his little face when he said to his mum, "I've got The Mine!" smile

This time, for the 14 year old, I am looking into opening a Nationwide kids' account with debit card, so that he can start handling his own money.

KatyK Fri 07-Aug-15 09:30:11

We have saved for our DGD since she was born, as we could never afford to save for our DD. I am not sure now that it is a good idea. DGD doesn't know we have an account for her as DD is afraid she will start badgering for the money. DGD is 15 and we planned to give her the money when she is 18 or whenever her parents think the time is right. When I mention to DD that maybe she could use it for university fees, or driving lessons, or to buy a car, DD replies 'we want to help her ourselves'. I'm thinking now it was the wrong thing to do although we just want to help as our DD and SIL struggle money-wise sad

Nonnie Fri 07-Aug-15 09:41:37

I think it does depend on their parents' financial position but I agree with jingle that I like to see their faces when I get the present just right.

DS3 and his wife suggested that instead of buying them an anniversary present each year we start a savings fund for future children. Not so easy as you can't open a child ISA for one not yet even planned! I have suggested peer to peer lending as it has a good interest rate and they don't need the money. I know there is some risk but as it won't be a large amount it might be fun.

Pippa000 Fri 07-Aug-15 10:13:57

We have put money in premium bonds as well for both children's birthdays since they were born, with their parents blessings I may add. My parents did the same for our children and they were delighted to receive a surprise on their 18th birthdays. But they do also have a small present for the birthday as well.

hulahoop Wed 07-Oct-15 22:23:59

Maggiemaybe didn't know premier m bonds made any interest or ami being thick we are wanting to invest some money for each of our grandkids but unsure what's best fed up of looking I am not very savvy re financial investments ??

grannyqueenie Wed 07-Oct-15 22:51:49

I consult with the mums and dads and sometimes they prefer gifts to be practical things like clothes etc. But I always have a few bits and pieces to raise a happy smile, like others I do love to see their faces light up! Jingl have you heard of the Go Henry card? It's a debit card (without a bank account) for younsters, that can be topped up/monitored by a parent. My 12 & 13 year old grandaughters both have them and love the independence it gives when they go shopping

Maggiemaybe Wed 07-Oct-15 22:53:16

Hi hulahoop. You can't guarantee any return at all with premium bonds. I just meant that the prizes we had over 12 months added up to the equivalent of 4% pa. That was back in August. As luck would have it (or not), we didn't win a thing in September or October. I just hope I'm saving myself for the big prize!

WilmaKnickersfit Wed 07-Oct-15 23:09:03

We had a similar situation with our niece and nephew. Their parents are well off and they live in an affluent area, so all in all they had so many gifts, especially for birthdays because they had a party every year. In fact, their Mum used to put away some gifts to be opened on a rainy day and the children were stuck indoors. We just couldn't compete with this and were pretty sure any gift from us would be quickly forgotten.

So we started buying NS Children's Bonds for Christmas and Birthdays. It meant that when they got to 18, they could cash them in for a nice little lump sum. At one point they did not give the best return on the market and their Mum suggested we just put the money in another savings account the kids had, but we said no because the point of doing it was to make sure the children knew the bonds were from us. Luckily we were in a position to see them a fair bit and even went to the USA with them twice, so we had plenty of opportunities to buy them other stuff and treat them where happy memories were created.

I think you can still get the bonds and no doubt the rules will have changed now because investments for children is big business these days, but it might be worthwhile investigating.

granjo39 Wed 07-Oct-15 23:19:08

My Gs are aged 5 years and 18mths.They have plenty of toys and live too far away to give presents. Halifax had an account which gave 6% the first year.I arranged for DD to open accounts and give them just a token small present to open for Christmas and birthdays and transfer money to their accounts.Because I don't see them to give pocket money I make a direct debit to their accounts each month.I am leaving it to DD to arrange new accounts when the 6% deal runs out.

tiggypiro Thu 08-Oct-15 08:08:41

Mine are all abroad so I have savings accounts for them here in their name but operated by me. It is not the best way to do it as we can't reclaim any tax and for that reason ISA's are not possible but it does still mount up and will be nice for them later on. GC's and their parents have no idea how much is there.
When I do get to see them they get small presents as weight in suitcases has to be taken into account !

mummyagain Thu 08-Oct-15 20:38:45

I think it's better to put into savings accounts that the parents have set inlaws opened an account for my lo 'in case they need anything'
It was weird as my husband and I have a junior savings account set up already so they could have transferred into that (like my parents do) the money in that account will not be touched.
And if our lo 'needs anything' we will not be asking them ??

I don't know what their plans are for the money but I worry they'll just hand it over at 18 and it'll get wasted. Our savings are to help lo with a house deposit/university/car/wedding - something big (my parents saved thousands for my wedding and we were so grateful as we had an amazing day thanks to them. I really wanted to do the same) x

jinglbellsfrocks Thu 08-Oct-15 23:14:42

Isn't splurging thousands of pounds on a big wedding, wasting it anyway? Just like you are worrying your children will waste their money at 18? confused

harrigran Fri 09-Oct-15 00:15:07

GC get a toy and some clothes for their birthday and I put a lump sum into an account or Premium bonds, I have done this since they were born. We will also be setting up accounts to pay their school fees.

mummyagain Fri 09-Oct-15 08:57:45

I can see why you'd think that jinglebellsfrocks, that's what my parents saved it for though. I should also add that my husband and I had our degrees, cars and mortgage before that anyway. All grafted for. (We lived in sin for years ????)

I don't think getting married is a waste. It's creating a cemented family unit for our children ????

mummyagain Fri 09-Oct-15 08:58:43

Ps - I didn't type loads of ??? Don't know what happened there haha

jinglbellsfrocks Fri 09-Oct-15 09:06:40

You sound just like my DD with the degrees, cars, etc sorted. And the living in sin for years bit. I think it was the latter that made her decide to have a lovely little wedding, which certainly didn't cost "£thousands"!

Not my business I know, but you posted it, and it sounds a bit odd on a thread about sensible investing for grandchildren.

Nelliemoser Fri 09-Oct-15 09:33:51

Saving for a "dream wedding!" IMO there are far more important things to save for. It might be news to some young people today that you can have a perfectly happy simple wedding without spending £1000s.
To save to get an education or career qualification or to buy a house is more useful.

My children had a reasonable legacy from their grandparents shortly after the time DD finished uni.
She spent a lot of that on a years travelling. My mother would have been totally horrified at such a "waste of money" never mind the risk.
(To some extent I can understand mum's point of view, they "just managed" when we were small and neither parent had any inherited money. They remained very frugal.)

DD went off on her own and came back as a much more confident and out going person all her shyness gone. For her that experience was life changing. She settled to do an adult nursing degree which was something I never imagined she would do.
It is hard to get any decent returns on small kids savings, I need to learn somthing more about these child trusts.

mummyagain Fri 09-Oct-15 10:11:44

That's what my parents wanted me to spend it on. Their wedding cost something like £75 years ago. I guess my mum was sort of living vicariously iykwim. We had a church wedding and it was lovely. I have a huge family and we had a sit down meal meal for everyone (mum and dad wanted it - me and husband wouldn't have bothered with that but are so glad we did as it was lovely)

I realise that makes me sound ungrateful - believe me I am not in any way. I'm very lucky in that I have a wonderful relationship with my family - all of them.

I don't think it cost a ridiculous amount at £5k. I have a friend that's spending £30k which is bloody ludicrous.

I'm really thankful that my parents did what they did for us. We had a wonderful family celebration, and as with all these things sadly it was the last time we saw a couple of members. My brother died shortly after so these are memories that will be treasured forever.

I don't expect everyone to understand that.

Also hoping I don't come across like a spoiled brat as I'm totally not lol

mummyagain Fri 09-Oct-15 10:19:03

Also My daughters savings are in a junior savers account ATM, I think I'll have a look at bonds for her too as she has a nice pot growing now. I have no clue where to start though and want to ensure its safe so any advice would be welcome x

rosequartz Fri 09-Oct-15 10:20:40

jingls - minecraft lego ??

Forget the money, minecraft lego for DGS for Christmas!
I didn't know they made it

Excited now grin

Maggiemaybe Fri 09-Oct-15 10:26:11

Not at all coming over as a spoiled brat, mummyagain! Family celebrations are always lovely and I can understand anyone wanting to make the most of them. It's entirely up to the individual to decide how they do this, and how they spend their money, whether earned or gifted.

Not that my DGSs will be able to do much with what we can give them over the years grin. A weekend in Blackpool, perhaps? Unless those premium bonds pay off, of course!

rosequartz Fri 09-Oct-15 10:27:39

I think that £5,000 is reasonable for a wedding, if everything is included in that.
I think both our DGC's weddings cost about that, and they were not ostentatious, but lovely.

It 's when people start spending £30 or £40 thousand (then complain they can't afford a house!).