A personal finance savings mission – including a Junior ISA
I am on a savings mission this January. There are several things that I want to save for so I am experimenting with setting up a range of different savings products. I currently have a significant amount of money saved up in my business savings account. Very simply I have been moving excess money from my business current account to my business bank account. And that is earning maybe 0.1% interest. This is NOT the right place to keep my savings.
I want to set up a higher interest paying regular emergency savings pot, the aim is to have at least £5k in there. I also want to have a separate specific pot for holidays, that is money for a nice summer holiday this year and for a Disney holiday next year. One last account to open is a stock and shares ISA for me and a junior ISA account for each the children. Phew. That’s a complex mission of savings options to investigate.
We spent our children’s savings
Back to the children! Rewind to 2013 before we needed to pay for an expensive extension, we had savings accounts for the boys. We were doing well and had put aside nearly £5k for the boys. This was going to be their university (or whatever they decide to do at 18) fund. But then we needed extra money to pay for our extension, I hadn’t released enough from the mortgage so we needed to source money from elsewhere.
The boys accounts were raided and they helped to pay for 7% of the house extension. Fair enough as they were living in it and benefitting from the extra space!
2018 is a savings year.
So now in 2018 after a few years of self-employment I am now able to open some accounts and to start savings again. I will be starting small and investing £20 per child per month. Once we have paid off the interest free debt we will be able to increase these savings amounts to much higher. I have always had a stocks and shares ISA myself and have always found the returns to be much greater than cash in the longer term so this will be the product I go for the children’s accounts.
Switching our Child Trust Funds over to Junior ISA’s
As part of my savings investigations I remembered that we already have two child trust funds that were started when my eldest and middle children were born, with the £250 vouchers that were given by the government. The funds in these accounts (with a very expensive fund provider, charging 1.5% in fees!) can be transferred into the Junior ISA’s to give them a nice healthy balance to start with. Things are looking rosy for Dylan and Josh who have a nice balance of savings in their name of around £2k each as I had been topping up the accounts with a small amount every month. Poor Jack though he has nothing, the government stopped giving out voucher between Josh being born in 2009 and Jack in 2012 so he currently has nothing.
Junior ISA from Wealthsimple
The account that I will be opening is a Junior ISA, of the stocks and shares variety. A provider that is worth considering is Wealthsimple who offer an online solution for the opening of various types of investment accounts including the Junior ISA.
Wealthsimple have no minimum amount required to set up an account and you can pay into the account any amount of money you wish per month. Many other providers have minimum monthly investment criteria and minimum set up balances, this is a big positive.
The fees are 0.7% for investments of less than £100k and 0.5% for investments greater than £100k, however if you use this link the first year of fees on a balance of up to £10k will be waivered, an even better offer than available direct on their site which is £5k fee free for the first year.
When setting up your account you answer a risk questionnaire which will give key information to help create a customised portfolio. There are different risk levels available with different funds with a risk level of 1-9. The funds that are available are currently less than 12 months old so have insufficient data to give a track record of past performance, this is coming in Summer of 2018.
I am very much so looking forward to building a secure savings fund for my children. I want them to have a nest egg of money to set them up when 18. It’s something that I didn’t have when I was younger and certainly wish that I did.
Please be aware that any form of investment can go up and down and you may want to consider advice from a qualified IFA. Just make sure they are recommended by a trusted friend and check their investment levels as some will only work with clients with an investment level of at least £150k. This post was written in collaboration with Wealthsimple.