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Holly's Blog: Rugrats, deals and presents

11 July, 2017

As we press send on this week’s blog I am relieved to see that it is only 11 days, 20 hours and 24 minutes until my children go back to school.

Even an invasion of aliens will not stop me from appearing at the school gates and pressing the ‘Eject’ button with gusto. How long is everyone else managing to hold off in the daily Screen Time Battle each day? I made it to 16:48 yesterday, well done me. [If you are one of those parents who bans screens and whose children play the harp and sew, please do not email me... x)

A Woodford Dribble…

So – turning to what’s up in the world of money. This week, news that another dribble of cash will be paid out to long-suffering investors in the Woodford Equity Income fund. Direct investors will be sent a letter on 24th August detailing how much of the total £183 million to be paid out, will find its way into your account. If you’ve invested on a platform, they should communicate with you directly and the money should hit by the end of August. There are no details on when investors can expect to get the final amounts due paid out – these illiquid assets will be slow to sell and pay out. Death by 1000 cuts…

Rugrats and Child Trust Funds

On a more positive note, let’s look to the future. Our precious little kiddies. In 2005 Gordon Brown launched the Child Trust Fund – people were sent a cash voucher for (mostly) £250 to save into one and get going. If you have a child born between 1 Sep 2002 and 2 Jan 2011 you will have had one of these vouchers. In September the first Child Trust Fund kids will turn 18, and so can get their paws on the money. Gulp.

Research from Interactive Investor (https://www.boringmoney.co.uk/isas-pensions/interactive-investor/)found that parents who saved £50 every month in the FTSE All Share index in their Child Trust Funds from launch, would have amassed nearly £17,000 by the end of 2019, which would have fallen to nearer £14,000 at the end of July this year.

By contrast, if they had invested in the global ‘MSCI World index’, it would have grown to about £22,200 by the end of 2019 and £22,500 at the end of July. That’s a clear reminder to make sure we have enough of a global spread in our investments.

If they had saved to cash, and got the very best rate currently available on cash Junior ISAs (3.25%), since Jan 2005 with a monthly top-up of £50 as well as the £250 start, this would have turned into about £12,500.

A few tips and some deals

  • First up on cash – NS&I (https://www.nsandi.com/junior-isa) leads the pack on cash Junior ISAs – paying 3.25% at the moment. (And grown-ups – this Government-backed provider also pays 1.15% on Monthly Income Bonds (https://www.nsandi.com/income-bonds) too at the moment – it’s hard to look past this combo of security and rates for cash savings at the moment.)

  • If you want to save into shares for the rugrats, you have up to £9,000 a year which can be sunk into a Junior ISA (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/junior-isa/). And anyone can contribute. There’s a new deal from Fidelity (https://www.boringmoney.co.uk/isas-pensions/fidelity/)which is worth a look. From 1 September they are not charging admin fees on Junior ISAs. That’s a pretty good offer from a very solid platform which has steadily been getting better.

  • And finally there are about a million lost Child Trust Fund accounts. If you have no clue what happened to yours, there’s a link here (https://www.gov.uk/child-trust-funds/find-a-child-trust-fund)to help you find it. It’s worth doing and bearing with the Kafka-esque trauma of the Government Gateway to find your account - this lost account could be up to about £1,000 today.

The Stingy-O-Meter

During lockdown, there has been a change in attitudes towards giving small people cash as a present – instead of large plastic tat from Taiwan which just blocks the hallway. According to robo adviser Nutmeg (https://www.boringmoney.co.uk/isas-pensions/nutmeg/), over 4 in 10 people who have given a gift to kids during lockdown have given cash. (And just so you can benchmark your generosity or stinginess, the national average for a kid’s pressie is apparently £20!) Maybe a Junior ISA is the new Lego :0)

Tweet this (https://ctt.ac/Je6xY)👆

Join Us!?

And finally, some exciting news from us. After 3 years of testing and development, we’ve got a clear plan of attack, big growth ambitions, and will be raising money to help us deliver. I wanted to give our loyal Boring Money readers first dibs on the chance to get involved – so next week we’ll be giving you early details of our crowdfunding and the chance to own a slice of Boring. Watch this space... :0)

Over and out all. Have a lovely weekend.

Holly