We round-up the best savings accounts and Isa accounts on offer in 2020.
Investing for children
The government has put forward a new 10-year plan to help transform the nation’s financial health by getting more people to save regularly. One of several targets on the table is to increase the number of children receiving financial education at school by two million, to 6.8 million.
"Invest in what you know” is the mantra of one of the world’s most successful stockpickers, Peter Lynch. Indeed, over the past decade, it would have been a recipe for success for those who backed the five tech giants (the FAANG stocks) that have become hugely influential over the past decade: Facebook, Amazon, Apple, Netflix and Google (listed under Alphabet, its parent company).
Tell the truth” is one of the first verbal rules parents attempt to instil in their children; but when it comes to securing an age-related discount, hypocrisy tends to set in. According to a survey by MoneySavingHeroes, an online voucher code business, 62% of UK parents have lied about their children’s ages, with 40% of those admitting to fibbing frequently in order to get their children into places for free or claim discounts for young children.
The most popular age-related white lies are told to bag travel, theme park, restaurant and cinema discounts – saving £47 on average.
An investment made on behalf of a grandchild stands to last a lot longer than the latest must-have gadget or piece of plastic tat, especially for those who take a very long-term view and are prepared to invest for a 40-year timeframe.
The idea of such a long timescale may not be feasible for those grandparents who wish to help with the high costs associated with getting on the first rung of the property ladder. But those who want to help their young grandson or granddaughter in three or four decades’ time will be able to invest at the top end of the risk scale.
My almost two-year old son has a one in four chance of reaching the ripe old age of 100. A frightening statistic, not least because I will be 129 when he reaches three figures. This got me thinking about the financial challenges a child born today has in front of them.
Almost two years ago, shortly after my son was born, I worked my way through a to-do list and decided to prioritise one of those jobs that might fall by the wayside – opening a Junior Isa account.
Banks and building societies are busy cutting the rates that they pay savers. The falls impact easy-access accounts offered to new savers, as well as those that were on sale in the past. Thousands of savers are currently earning a pittance on cash languishing in more than 1,400 easy-access accounts, which are closed to new savers.
Anyone can now buy premium bonds for children, including aunts, uncles and family friends.
Previously, only a parent, grandparent or guardian could buy premium bonds in a child’s name.
This change to premium bonds was first announced in the October 2018 Budget and is aimed at creating a stronger savings culture.
This latest improvement to premium bonds follows the reduction of the minimum investment from £100 to £25 in February this year. The maximum that you can spend on premium bonds is £50,000.
Is it appropriate to give pocket money to a three-year-old? Well, one in seven parents think so and frequently splash the cash, according to research by the Nottingham Building Society. Just over one in four (26%) kids aged eight receive pocket money.
The research also found that giving between £5 and £9.99 was the most common; in terms of how often the payments are made, weekly came out on top. This means children who receive pocket money on a weekly basis are potentially pocketing as much as £520 a year.