If you want to save money for your children, you might consider ploughing some of the money that might be spent on expensive, soon to be forgotten, plastic toys for Christmas and birthdays into a high interest savings account.
Here are some tips that might well prove useful.
- Parents who cannot afford to risk losing any money for their children should stick with the safety of cash, using a savings account.
- Child savings accounts may pay higher interest on lower balances, but it is worth checking the rates on normal accounts, particularly if you are saving on a regular basis.
- Fill in an R85 form to make sure any interest on a child’s savings account is paid in full, without tax deducted.
- Shares and stock market assets may be volatile, but history suggests they deliver higher returns over the long term. Throughout the last century, if you left your money invested for 18 years or more, equities out-performed cash 99% of the time, according to research by Barclays Capital. Even over shorter periods of five years, equities beat cash 75% of the time.
- Consider asking relatives and friends to top up tax efficient Child Trust Funds. Available to all children born on or after 1st September, 2002, to the maximum of £1,200 a year. The money is then tied up until the child’s 18th birthday.
- Parents who prefer to keep the money under their own control, and hand it over when they choose, might prefer to use their own individual savings account (ISA) allowances to invest up to £7,000 a year in stock market assets. Or up top £3,000 a year earning tax free interest in a mini cash Isa, with the potential to put a further £4,000 in a mini equity Isa.
According to research from The Children’s Mutual, the average child is receiving £85 at Christmas and one in five receiving more than £100.
Faced with the generosity of grandparents, godparents and other relatives and friends, a safe home needs to be found for these sums. It would be madness to fritter away money like this that could be put into a safe home to increase in value.
Children’s accounts suitable for longer term saving include Halifax Children’s Regular Saver account, paying 10%; Yorkshire Building Society’s Treasure Bond paying 6.25% and the latest issue of Nottingham Building Society Children’s Regular Saver account currently paying 7.5%.
Most children’ accounts are not available to children over the age of 16 years, but several accounts are open to older children and can be useful for teenagers and students.
One such account is the Saffron Building Society’s V4 account, which can be held up to the age of 23 years. If you are investing money for your children over a longer term then interest rate is what you should be looking at rather than just easy access, because this becomes increasingly important as the balance grows. Also, postal, telephone and Internet options may prove to be crucial in getting a higher rate of interest.
Save Money and Stay Secure on the Internet
It is possible to be save money and also be secure on the Internet when you are buying goods. Internet buying has many attractions – the convenience of buying in your own home, avoiding crowded shops and inattentive sales assistants and no parking fees to pay. Just with the click of a mouse you can search whole stores, even when they are ‘closed’.
To remain secure and also save money, the following tips will be of help to you.
- Check that the online retailer you are dealing with has an address and landline telephone number in the real world. Make a note of these in case they should be needed, particularly if the company is based overseas.
- Always use secure web sites. These sites are indicated by a small, golden padlock icon usually located in the bottom, right hand corner of the screen.
- If you are buying an item costing over £100 use a credit card to gain insurance under the Consumer Credit Act. You may well save money here.
- Before completing the transaction check the arrangements for payment and delivery and your cancellation rights. Check that you are able to return goods if they prove unsuitable or not as described.
- Print off a copy of your transaction page and also any subsequent emails you may receive relating to your purchase, i.e., confirmation of your order and delivery dates.
- Use retailers that are known to you or those who have been recommended.
- Do not automatically assume that a retailer is based in the UK just because their web address has ‘UK’ in it. Check anything that might cause you a problem in the future.
- Before completing your purchase take into consideration the shipping, postage and packing costs. Balance these against your travelling and parking costs you would have to pay if you journeyed to the High Street.
- Make sure you use a different password for each web site – yes, a bit of a bother, but worth the trouble. Have three or four ready that you can alternate.
- Do not write down these passwords or your PIN number. They are both very valuable. Good exercise for the brain to remember them! This point is particularly important if you are using a shared computer. If you are using a shared computer, remember to log out of any site when you have finished.
- If you must write down these passwords and PIN numbers keep these stored in a small notebook and store it in a place known only you. You have been warned!
Therefore you will now see how to save money and remain secure on the Internet is really just a matter of wise precautions and common sense. Possibly the pleasure without the pain!
Another page of special interest which gives you additional information is Identity Fraud. Definitely worth a read.