I'm trying to work out the best way to set up a trust fund for my two nephews. Here's the deal: we want to seed the fund with a chunk of cash, and add to it over the years, but have the money locked in until the boys reach 18. (Tricky, since one is 8 and the other is 2 ... maybe I need two trust funds, but that will surely impact on interest earned).
Critical factors: the fund (or whatever) must be set up by Monday 28th. Interest rates in the UK are low at the moment, so purely interest-bearing accounts may not be the best. The UK government also gives something like an additional 20p per pound of donation to charities. It would be nice to take advantage of that. And finally, we'll need two signatories on the account - the uncles from both sides of the family.
Anyone else out there got experience of doing this? I spoke to the family accountant and he's "still working on it", and the company accountant hasn't got back to me yet. So lazy web, I invoke thee!
Update: This article on tax-efficient ways to save for school fees has some interesting hints about bare trusts and ISAs, which could be useful (although we envisage the money would be used as deposit on a house or paying university fees).
From the article: Charles Ansdell of Inter Alliance, an independent adviser, believes equity Isas can usefully be employed for school-fees planning, although you have to choose your funds with care.
He says: �You want a balanced portfolio with a mix of bonds, cash, property and stock-market investments. As a rough guide, I would invest about 50% in bonds, 30% in equities, 10% in property and 10% in cash.�
The Times also has a good article on Children's savings accounts compared. For simple savings accounts, it looks like Scarborough Building Society offers the best deal.
The Children's Portfolio looks like an interesting concept and one that bears looking at further. Not sure if it requires a regular monthly investment or a lump sum investment though.
The National Savings Children's Bonus Bonds are similar to what my sister and I had as kids, but when we had them, interest was around 10%. It's now 3.2% - hopeless!
Posted by savs at July 23, 2003 3:19 PM