The big mistake many make when saving or investing for their children…

Martin Lewis brings you everything you need to know about saving or investing for your children’s future, including: Junior ISAs, children’s savings, regular savings - and reveals the biggest mistake most parents make, so you don’t do the same! Plus, there’s car finance compensation news, as a claims law firm has announced it will take the regulator to court to try and increase consumer payments, but could it slow things down? You tell us the cheapest thing you've ever taken back to a shop to complain about, and Mastermind is all about which credit product has the most interest attached to it, you might be surprised by the answer! If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!). So, if you’ve always wanted to know his favourite Morse code letter, how long he can hold his breath underwater, or have a very complicated question about your finances, email it to [email protected] mailto:[email protected].

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:10Speaker 01

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• 0:41Martin Lewis?

  I can only hope it succeeds in getting more for consumers. We are a nation of savers, not investors, and I need to make a big point.

• 0:49Speaker 03

  They're just giving me love and only protecting from love.

• 0:52Martin Lewis?

  There is a rule on money put away by parents for under 18s. Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Now, usually, much of it comes from my BBC Radio 5 live show with Adrian Charles, but there's also bonus money-saving tips just for you, lucky, lucky podcast listeners. In today's pod, it's a big ickle topic: how to save or invest for your children's future, juniorizes children's savings, regular savings, and what is the biggest mistake most parents make. There's car finance compensation news. As a claimed law firm has announced it will take the regulator to court to try and increase

• 1:35Martin Lewis?

  consumers' payments, but that could slow things down. And we, as a nation, under-invest. The government and investment firms are about to launch a campaign to change that. Will it work? Well, tell us this week, what's the cheapest thing you've ever taken back to a shop to complain about? You're going to love those. Play the theme tune.

• 2:09Martin Lewis?

  When I was walking into Broadcasting House today, I was quite shocked because there were just huge amounts of crowds outside BBC Broadcasting House. Many, many people, and I couldn't work out why. First of all, I assumed that obviously you may have been late to the studio and they hadn't seen you yet, so it was your normal crowd who hadn't dispersed. But then it turned out you're not in the London studio, so it wasn't that.

• 2:31Speaker 03

  It's chaos in Cardiff, by the way.

• 2:34Martin Lewis?

  Is it? Do you have, how many security do you have?

• 2:37Speaker 03

  I don't bother with it because I'm man of the people, but I mean, there's thousands

• 2:41Martin Lewis?

  And you're hard in your own right. I mean, you could take everybody yourself.

• 2:43Speaker 03

  They just give me love and only protecting from love. So anyway, go on, who was it?

• 2:47Martin Lewis?

  So then I asked, and apparently it's the cast of The Devil Wears Prada. But in Mastermind today, Adrian, it is not The Devil Wears Prada, it's The Devil Wears Mid-Range Unspecified Brand High Street Clothing.

• 3:02Speaker 03

  Right.

• 3:03Martin Lewis?

  Because the question that you have today is all about credit and debt. So there you go, that gives you plenty of time to do your preparation to make sure you get it right.

• 3:10Speaker 03

  Okay. So, Martin, I heard there was something had happened with car finance and I was listening to the radio yesterday, and then I kind of, I just thought, oh, I can't bother to listen, Martin will explain tomorrow. So now, now's your chance. What has happened with it?

• 3:27Martin Lewis?

  So, well, there's a sort of irony here because my suspicion is, look, let's go plain first. If we have this new mass redress scheme that was launched by the regulator, the FCA, and the idea of the mass redress scheme is it will cover people not only who complain, though you should always, and this changes nothing, get your complaint in. If you've bought a car on finance since April 2007 and November 2024, and it was PCP or Higher Purchase Finance, you should be putting a complaint in now because if you put a complaint in, you're likely to be paid out quicker than those people who haven't put a complaint in. So that changes nothing. If that's you, there are free

• 4:08Martin Lewis?

  Tools online, you can go and put a complaint in and you should consider doing so because it will speed everything up. So we have this mass redress scheme and the mass redress scheme is designed both to help people who complain and that you don't need to use a firm to complain. But also that firms must go and they must seek out and search people that were missold who haven't complained. Which is what makes it unique and it's why I'm supporting it. But as I've said many times on the podcast before. You need to be aware that the payout you'll get through the mass redress scheme is likely less than the payout you would get. If you were to go to court and win in court, that of course to go to court, you'd probably need to use a claims firm that would take off thirty percent of what you get back. So it balances itself out. So now the reason I suspect.

• 4:53Martin Lewis?

  That there is lower payouts from the regulator than we think the courts would do is because. Ultimately, I think the regulator did a compromise. In order to get its scheme out with a lower risk of challenge from the motor finance industry. I said car and finance, it's also. Motorbikes and camper vans and vans as well. So it's motor vehicle finance. So what's ironic here is that the first reported challenge is from a claims law firm. Who are looking to get the regulator to increase the amount that consumers receive. Now, this is being done via a website called Consumer Voices that works with legal claims firms. And tries to do group action cases. They've decided to bring the case.

• 5:37Martin Lewis?

  They're arguing that the payout isn't big enough. I'm hearing variable terms depending who you listen to. That the amount of uplift they might get from the typical about eight hundred quid that you get on motor vehicle finance. Might be between thirty pounds and hundreds of pounds depending on who you believe. We are also hearing that this may potentially delay car finance payouts. So Consumer Voices decided to bring this case. It's a relatively small website. They want to do it because they think that the amount of payments isn't too long. I'll be honest, I think there is an element of gamble here by in bringing this case. Because there is a risk of delaying payouts and many people already feel they've waited too long.

• 6:20Martin Lewis?

  Of course, the upside is there's a chance of increasing the amount. If it wins, I think the public will be supportive. Yeah, if Consumer Voices doesn't and it delays the process and now comes out of it. I think there'll be quite a lot of frustration that it's chosen to do this action.

• 6:34Speaker 03

  And what's your view?

• 6:35Martin Lewis?

  Well, I've always supported a mass redress scheme and I've been very upfront that people who think they want to go and get more should consider going to court, although I think for the vast majority of people, they always tell me they want it easier and quick. Now, I did a vote yesterday on social media saying, look, do you see the fact this is a potential delay? And Consumer Voices is saying it won't be a delay, but what I'm hearing from the FCA is it will be a delay. And there are questions that even if the payments were to go up, would that mean there had to be another consultation? So I think it's absolutely right to say there is a substantive risk of delay in this case. And I said, what would you prefer? Do you see this as bad news because it's a potential delay or good news because it's a potential increase in payouts? And this was asking consumers.

• 7:17Martin Lewis?

  Fifty-two percent of those people who had claims in said this was bad news and 48% of people said it's good news. So I think it's really strict. I'm going to phrase this quite carefully and I'm taking quite a neutral stance. I'll be blunt, I'm not trying to hide anything here. The appeal for me of mass redress and what my, you know, I've had over four million complaint letters of mine have gone through on this, which is a huge proportion of the total amount. And the appeal of mass redress on the enormous amount of feedbacks I've had is it's meant to be easy and it's meant to be quick and it has already been delayed. So my view is this, Adrian, and it's almost a bit of political phrasing, you'll forgive me.

• 8:01Martin Lewis?

  As this case is happening, I can only hope it succeeds in getting more for consumers and that with hindsight, it turns out to be something we can celebrate. Whether it should be happening or not is a slightly trickier question that I haven't seen the details. We don't have the details of exactly what they're doing yet that I cannot answer at the moment. But if it is happening, which it looks like it is, then I hope they win because it'll get consumers more money.

• 8:29Speaker 03

  Let's move on to Chancellor's campaign to address the country's investing gap. What is the gap to which he refers?

• 8:39Martin Lewis?

  We in this country massively under invest. So we are a nation of savers, not investors. We are incredibly risk averse as a country. It is quite difficult to get people to invest. Now, look, the honest truth is if you have assets that you don't need and you're putting them away for over five years, then putting them in a broad spread of investment will massively smack the pants off. You know, tenfold type returns on the balance of probabilities compared to savings. And yet in this country, we do not put our money in investment. Now, that has a couple of problems. The economic problem, because what the Chancellor would really like is all to be investing in Britain PLC and putting our money to give extra capital for British firms in order for them to grow, which would help the economy.

• 9:23Martin Lewis?

  Although whether people would actually put money in British investments, you know, a lot of money goes into global tracker funds or S and P, the US tracker funds is an open question. But also equally, that if people are investing, not saving, and they're doing it the right way and it's working for them, then they would have more money in their pockets too. It's a bit like, you know, many of us are investors without really being conscious of it because within our pensions, almost all pensions are invested, not saved. So the hope is that you're, and the hope of investment, just for those who don't know, is you invest in the hopes that you will get greater growth, but in the risk that you may not get back the money that you put in. Though in a broad spread of investment over a long period, you mitigate that risk and balance of probabilities, you should get it back.

• 10:08Martin Lewis?

  You save and your capital is safe, so the money you put in, you'll always get back and you get interest, but there's a risk there that it gets eroded by inflation. So, look, I'm very supportive of this new marketing campaign. I haven't seen it yet. Apparently it's got a squirrel in it, squirreling away, which maybe you shouldn't be squirreling away in savings. Maybe that's the message, but I haven't seen it yet. It will be interesting to see.

• 10:32Martin Lewis?

  We have to remember, this is the reason the cash ISA is being cut. The cash ISA limit from April 2027 for those under 65 will be £12,000, as opposed to the current £20,000. But you'll still be able to put £20,000 in total in an ISA. And the hope from the Chancellor is this will encourage more people to invest. So effectively let the tax tail wag the dog in a way, which is not always the best idea. I would have far preferred a Beckham marketing campaign and incentives earlier so that we didn't have to cut the cash ISA and give people freedom of choice that they could go forward. So I support the moves to get more people to invest. People who listen to what I put out will note that in the last, well, probably three or four years, I've been much stronger on my, you know, you need to consider investing

• 11:16Martin Lewis?

  if it's money you're putting away for the long term that you don't need. We're going to be talking about junior ISAs later and I'm going to be saying that very strongly there because that's one of very obvious area where people should be considering investing. And, you know, I did my first TV show on it a year ago. It's far more difficult to do it on TV. Ofcom regulations make investing really tough. So we had to work very hard to get that passed. But we've been doing it here on Five Live for much longer and on the podcast and on my website. I have been, because some people... So, sorry, I'm sorry, asking myself a question and answering it. Sorry, I hope this is boring.

• 11:47Speaker 03

  It's easier that way.

• 11:50Martin Lewis?

  So I think from my personal perspective, I've always talked about savings and I've always done the caveat that that doesn't mean you shouldn't invest, but that investing is not my expertise and I'm not a regulated investment advisor. And I am concerned that some people, even though I said that, the message they heard is save. So I have been deliberately conscious for a few years now to be much stronger on making sure people don't get that message. And I think the, you know, there's lots of problems in investment that are being changed now, that the strong warnings, you know, if you're doing it in advertising your investment, even if it's a broad spread in a tracker fund, you have to put all these warnings on it that are really basically a bit like cigarette warnings that are almost designed to put people off,

• 12:34Martin Lewis?

  which runs entirely counter to the Chancellor and the sort of economic need for more people to invest. And I think this is all part of a turnaround of the psychology on that. So I think it's very interesting. I prefer to do far more of this carrot stuff than the stick type stuff they're doing with the cash ISA.

• 12:50Speaker 03

  Can I just ask you a very basic question? Why does the Chancellor care? What benefit is it to the government? If I, I take a, let's say notionally, let's say I had a million pounds in a savings account. Instead of that, I buy some shares with those million pounds. How, how does that help? Because I'm buying the shares of somebody else, I'm not sinking it into a company.

• 13:16Martin Lewis?

  Well, that's not, well, first of all, if you're buying shares, and lots of other people like you are buying shares, then you push up the, the price earnings ratio of, of UK shares, if it's in UK shares. Which means, you know, one of the problems at the moment is we have, people are moving away from the, this is not my expertise, so I'm doing this from a general point. If there are any proper specialists out there, people are moving away from the city of London because there isn't enough money coming into the market compared to where the markets and valuations in the UK are far lower. So if you're gonna, if you're gonna put your company on the stock market, you know, and you've got a hundred million pounds of profits. And in the UK, that means if you float it, your company will be worth a billion pounds.

• 13:57Martin Lewis?

  But if you float it in the US because the price earnings ratio, how, how markets are valued is higher, it'll be worth three billion pounds. Well, you're gonna float it in the US, which makes UK PLC less competitive and the UK market's less competitive. But also more people buying shares means there's more liquidity in the market, so it's easier to sell shares. So it's easier to launch new shares and more money can come into companies. But equally so, Adrian, the, the philosophy is, if you do, you know, if you put a million pounds in an individual share, that is a huge risk. If you put a million pounds in a global tracker that is covering, you know, a thousand different shares or two thousand different shares, then actually of, of large companies, you're vastly mitigating the risk.

• 14:39Martin Lewis?

  And on the balance of probabilities, you know, I'm making this number up, but you would then in 10 years' time, you might have two million pounds. Whereas in savings, you might have a million and fifty thousand pounds. And the fact that you've got more money makes you richer, means you pay more tax, means you've got more to spend in the economy and all of that boosts the economy. So that is, that's the general theory of what's going on, said by a non-investment specialist. I'm just, you know, I've got a bill of caveat on that, it's not my, it's not my subject area.

• 15:07Speaker 03

  Shall we move on to putting money aside for your children? Lots of questions, before we get into them, just run us through the basics.

• 15:14Martin Lewis?

  Okay, so, I mean, it boils down to a choice of two things. Do you want to lock your children's money away until they are at the age of 18? If you do, then the prime product is a junior ISA. So a junior ISA allows anyone aged under 18, I mean, a UK resident aged under 18, to have up to nine thousand pounds put away each tax year in their name. Remember, it's each tax year. So you could have put nine thousand pounds away for them last March, which was the old tax year, and you could put nine thousand pounds away for them now. And all of that would stay in your tax-free ISA wrapper so that the money could never be taxed. And you can choose a junior ISA, or JISA, as it's sometimes called, cash, or a junior ISA shares investment.

• 15:59Martin Lewis?

  You can do either one, you can do a combination of both, which is, you know, often what many people do. And then that money becomes theirs at the age of 18. So the big boon of a junior ISA is it's tax-free, although the tax is not necessarily that relevant for many children. And the big boon for others is you lock it away till they're 18, and that they can't touch it until they're 18. And equally, for many grandparents and aunties and uncles out there, if you want to put money away, their parents can't access it either, because it's locked away until the child is 18. You know, so it's not that the parent might be the custodian of it, but they can't take the money out. The concern of that is, let's say you're using a junior ISA to save

• 16:42Martin Lewis?

  or invest for your child's university, and you want to put the money aside. And you've done that diligently, well, on the child's 18th birthday, if they want to buy a camper van to follow Harry Styles around the world in it, you know, and think, oh, work out my university funding another way. It's their money, it's their choice. It is their money on their 18th birthday. So you have to remember that. There's also child trust funds, which is predecessor of junior ISA, some people have. The other alternative is children's savings, which are basically just savings accounts for children where you have access to the money, or your child has access to the money if they need to spend them. And you can have access to the money, depending on the age, you know, your child, you might want to have some funds for them that they can spend when they're 15, 16, 17, 18. Or you might want freedom and flexibility, which is what normal children's savings do.

• 17:26Martin Lewis?

  So I know we've got loads of questions, I won't go into the specifics now. But basically, the choice is, do you want to lock it away in a junior ISA? Or do you want the freedom and flexibility of being in children's savings?

• 17:36Speaker 03

  And how does tax work for children? Before we get into ISAs, but explain how tax generally works.

• 17:42Martin Lewis?

  So I sort of mentioned this earlier. It's a really interesting question. Many people think that children don't pay tax. That is incorrect. Children pay tax just like adults. So just like adults, the first £12,570 per tax year that they earn is tax free. But most children, at least those who aren't in the new Harry Potter TV show anyway, do not earn enough to pay tax. So their income is taxable, but it isn't taxed because it's below the threshold. So that means for most children, the fact that junior ISAs are tax free until they're 18 isn't the biggest deal. So one of the reasons, people do it for the lock away till late teen thing rather than

• 18:27Martin Lewis?

  the tax free, but there is a big exception to this. And the big exception, the one place children are taxed differently to adults, and actually you can argue are taxed more than adults, which might surprise people, is there is a rule on money put away by parents for under 18s. Now, this is specifically by a parent or stepparent. It is not by a grandparent, an auntie or an uncle or others. So if your child earns more than £100 a year interest, or it could be income in investments, on money given to them by a parent, it is taxable as if it was the parent's savings or investment.

• 19:08Martin Lewis?

  Now, what this is done, is this is done to stop parents dunking all their savings into their kid's name to use their full tax free allowance to avoid paying their own tax on it, so that you can't do that. So when I say it's taxed at the parents' rate, if the parents have their personal savings allowance, a basic rate taxpayer can earn £1,000 of interest a year tax free. Well, then, you know, it would be, this would use up their parents' personal savings allowance. So that's when a junior ISA comes into its own, money given by parents, because that would be taxed over a certain amount, you know, £100 interest. It, you know, you're talking a few grand in the savings account and you're going to earn over £100.

• 19:46Martin Lewis?

  quid interest quite easily. So on that basis, that's when the junior ISAs is strong. So children, children mostly aren't paid tax. So the junior ISA, where money not given by a parent, isn't that interesting and not that much money doesn't really give a tax free advantage, but it does if it's money given directly from a parent. And if you're putting away nine grand a year, if you're putting the full junior ISA in, then that money, you know, absolutely would have generated enough that the child's interest would count as the parent. So it's worth doing.

• 20:13Speaker 03

  Okay, let's move on to the question. Nikki Ashby wants to know, how can I start saving for my 15 year old son? Most ISAs are for 16 plus.

• 20:21Martin Lewis?

  I think that's a confusion, Nikki, if you forgive me. Cash ISAs, which are the adult ISAs, used to be available for 16 and up, whereas junior ISAs are for those below 18. They've now changed it so that cash ISAs are only available once you're 18. So the regime is simplified that you have a junior ISA before you're 18 and you have an adult ISA once you're 18. And so therefore, it just simply isn't true that there aren't there aren't accounts for under 16. So there are loads. I'll just do the Best Buy junior ISA savings, although as I'm going to come on, you will hear me say, I don't think

• 21:04Martin Lewis?

  generally you should be using savings as your priority. You should be investing, but let's just do them because it's an older child, so putting a little bit of money away. Top pair is Leek Building Society at 3.85%, available by postal branch, followed by Skipton at 3.8%, also postal branch and Stafford and Coventry, all in the 3.75%. The top, which is available online, although it's an app, is CMC Invest at 3.56%. But to be honest, only 0.01% below that at 3.55% is NSNI, the state owned financial institution, you know, the premium bonds financial institution. NSNI is paying 3.55% on one pound plus online. Every account I've mentioned.

• 21:49Martin Lewis?

  Allows transfers. So if your child has money in a junior cash ISA right now, you should be checking the rate. If the rate that you get is lower, you should be doing a transfer to one of those junior ISAs that I've mentioned, or maybe to a shares ISA, as we'll talk about in a moment. And to do the transfer, obviously you can't take the money out, so it would be impossible to do that. You go and make an application to the new firm and on the new firm's application, so whether it's Lead Building Society or NSNI, it will have a transfer part and you fill in the transfer part and then the new firm will take the money from the old firm for you. So you now have your new junior ISA with the new firm, not with the old firm.

• 22:31Speaker 03

  Okay, so Jen Henderson, does the amount put into a junior ISA come out of the contributors, i.e. the parents' ISA allowance for the year?

• 22:39Martin Lewis?

  Absolutely not. It's totally separate. Your child has that. It is your child's money, not your money. It uses up your child's junior ISA. So you can have up to £20,000 in an ISA and you can also put up to £9,000 per tax year in a junior ISA.

• 22:56Speaker 03

  Okay. Tracy Dowler, can you move a child trust fund if the interest rate is no good? And can you have a junior ISA at the same time?

• 23:04Martin Lewis?

  You cannot have a child trust fund and a junior ISA. You can only have one, but you can transfer a child trust fund into a junior ISA. And certainly on cash, I would strongly recommend that you do. Child trust funds are junior ISAs predecessors. They had the boon. It's for children aged 15 to 23. So many of them aren't in this, but if you've got a 15, 16, 17, 18 year old, that they're sort of in this regime, depending on exactly their birthdays. And the state will have added money too. But child trust fund interest rates tend to be lower than junior ISA interest rates because the child trust fund is a legacy product. It can't be opened anymore. So if your child has money in a junior, in a cash child trust fund,

• 23:49Martin Lewis?

  I would be transferring it to a junior ISA. If your child has money in a shares child trust fund, what investment advisers have said to me is the choice of investments in shares child trust funds tends to be worse than the choice of investments in shares junior ISAs. So they also suggest you transfer it too.

• 24:11Speaker 03

  Claire Spencer, my daughter is 16 and has money in the government trust fund. When the government gave £500, we continued paying into this. Is it best to keep the money there or transfer it to an ISA? She also has a considerable amount in a savings account. Account is in my name, but is on behalf of her.

• 24:30Martin Lewis?

  So, as I've just answered that, really, yes. In a shares ISA, I would be looking to transfer it to a junior ISA provider that gives you more choice. That's what investment advisers tend to suggest. Just as a note, she also has a lot of money in a savings account, but it's in my name. She doesn't have a lot of money in a savings account. You have a lot of money in a savings account. You're taxed on that money, not her, and that goes to your tax bill. That is potentially an inefficient way for you to be doing this. And as long as you trust her, at this age, you may want to be putting that money into her into her name and using up your various allowances to do so.

• 25:06Speaker 03

  Okay, Rebecca Connor, I'd like to know if there's a sensible way to save for our son, aged three, but with the option of potentially accessing the funds for him if we need them while he's still a minor for school trips, etc.

• 25:21Martin Lewis?

  Okay, you're talking saving and you're talking accessing money. So we're now talking about children's savings, not junior ISAs. The money in junior ISAs locked away, gone.

• 25:34Martin Lewis?

  Locked away behind a door. That was my sort of general noises.

• 25:36Speaker 03

  Very good.

• 25:37Martin Lewis?

  Thank you very much. So let's have a look. Top easy access savings for kids is the Nationwide Flex One Saver. Pays 5% interest on up to £5,000, but your chart has to be aged 11 to 7 to open it. 11 to 17 to open it. And top payer that would apply for, in this case, for a three-year-old is the Kent Reliance Buildings, Kent Reliance, at 4.18% on up to £25,000. You must apply by branch or in post, and it must be opened by an adult aged under 18 for an under seven. It doesn't have to be a parent. Junior ISAs have to be opened by parents. Savings account can be opened by an adult. Running down the list, you've got HSBC and Family Building Society, too.

• 26:21Martin Lewis?

  I think it's worth noting, there's a thing called Kids Regular Savers which pay more. So, the very top paying kids savings accounts are Regular Savers, Halifax is at the top. It pays 5.5% interest fixed for a year. You pay in between £10 and £100 a month and it's for those aged 0 to 15. And parents or legal guardians must open on behalf of a child online or in branch. So what this is about is this is great for those people who are putting money aside each month because the interest rate is higher, although at the end of the year it closes down and goes into a pants account. So then you'd need to move it into one of the sort of normal savings accounts that we've got.

• 27:04Speaker 03

  Jen Rainbow, the only savings account I can find for my four-year-old is the one you recommended, Halifax Kids Monthly Saver Account, but after a year the interest is reduced. And if they open another account instead of the Kids Saver, the interest is cut from 5.5% to 2.25%. It seems there's not many places you can save with high interest for a child under seven.

• 27:27Martin Lewis?

  It is much more difficult for a child under seven and that is the point of Halifax. It lasts for a year and then the rate is pants. So you can then reopen one or you move the money elsewhere that you've saved up. The top rate for under sevens in easy access savings is Kent Reliance at 4.18. So you could then put all the money that you've saved up in Halifax at the 5.5% Regular Savings Account into Kent Reliance and you could sweep that each year annually and that currently is the best combination.

• 27:56Speaker 03

  Okay, Anne Ellis, I want to pay into a savings scheme for my niece and nephew. How can I do this in their name with restricted access until they're 18?

• 28:06Martin Lewis?

  Well, that would be a junior ISA. That would be absolutely a junior ISA that you're talking about. But you can't open a junior ISA because it's your niece and nephew. The parents or the legal guardian has to open the junior ISA and then you put money in and nobody can touch it until they're aged 18. So I mentioned earlier the sort of all their parents. Now, in many cases, of course, the parents have the kids' best interests at heart. But if you're a worried relative who thinks is not a fan and thinks the parents might not be going to be money and might take their kids' money and it does happen, then a junior ISA, even though it's opened by the parents, is totally protected because the money's locked away until they're 18 and then it's the child's to take it out, not the parents. So you would get that protection. Now, the question I've been waiting for, because there is a big mistake millions

• 28:51Martin Lewis?

  of parents make when putting money away for their children. Here you go.

• 28:56Speaker 03

  Carol has just had a baby. Congratulations, Carol. I want to buy stock on behalf of him and so he can access them when he's 18. Which account should I set up for him?

• 29:05Martin Lewis?

  Yeah, we finally got our shares ISA question and I need to make a big point at this level. You know, when I look on my website, the vast majority of people who come to my junior ISA page are looking for the top cash junior ISA savings rates. When we ask for questions on kids savings and investments, the vast majority of questions are about savings, not investments. That worries me. We talked earlier in the show about investing. Now, on the balance of probabilities, if you invest in a broad spread of assets over the long run, investments are likely to grow significantly faster than savings, significantly many times faster. You know, over

• 29:48Martin Lewis?

  the past 10 years in a S and P 500, you would have, you know, I can't remember what the factor is, factor 20 times more than you would have done doing it in savings, which wouldn't have beaten inflation. Now, I'm just interrupting myself because while I was doing it live, I was giving rather loose indications of the difference between saving and investing. And I thought it was worth doing that a little bit firmer with some actual numbers for you. These are based on the adult market rather than the children's market, but the principle is exactly the same. Of course, it depends on the period that you look at, and there are no guarantees here. But we're going to look at a 10-year period up until the end of last year, till the end of 2025. We're going to assume that if you had savings, you kept the interest in the account, so that

• 30:31Martin Lewis?

  compounded. And if you put it in a fund, then any dividends, that's the income you make on shares and funds, were also reinvested and bought you new shares. So they compounded too. It's worth noting, this particular period we're looking at was a very low interest rate period. So the savings returns were particularly low. It was all those years of, you know, half a percent UK base rates. But still in Contrast, this is a long 10-year period, just to show you the difference. So, if you'd put a thousand pounds in savings at the start, at the end, you would have made 270 quid. In other words, you'd have got 1,270 pounds back. But, just to keep up with inflation, you would have need to get 390 pounds back.

• 31:16Martin Lewis?

  So, in other words, you didn't keep up with inflation. So, in real terms, by putting your money in the savings, and these were the top savings it was calculated upon, you know, the Martin Lewis top savings account for the time, you would have still actually seen your purchasing power diminish. You know, you would not have had enough in the account after 10 years with 1,270 quid to buy what a thousand pounds would have bought you with when you first put it in. Now, let's contrast that to a couple of different tracker fund investment options. If you had put the thousand pounds in a global tracker and had the dividends reinvested, by the end of the 10 years, you would have made 1,980 pounds. In other words, you'd have got 2,980 pounds back.

• 31:58Martin Lewis?

  A massive difference, far above inflation and smacking the pants off savings. If you'd gone to put it in the S and P 500, which is the top 500 US biggest shares, well, that had a very high growth at the period because lots of tech firms did well, then you would have got back 3,790 pounds. So, that's your original thousand pounds plus another 2,790 on top. Contrast that to just the 270 pounds you would have got in savings. Now, of course, as you're supposed to say, and as is absolutely true, past performance is no indicator of future performance. So, there are no guarantees this would happen again. There are also no guarantees that the S and P 500 would outperform in that period.

• 32:42Martin Lewis?

  But I wanted to give you just the scale of magnitude of difference of putting money in a broad spread of investments. So, these are all tracker funds compared to putting it in savings over that 10-year period. And you can go back and look at graphs online to see different periods compared. And the reason, when we start talking about junior ISAs, they are absolutely ripe as a choice for investing, not saving.

• 33:06Martin Lewis?

  And this is why the two big questions about whether it's time for you to invest or not with some or all of your, not all of your assets, some of your assets is, is it money you don't need to access at the moment? And is it money you're putting away for the long term, e.g. a minimum of five years? Now, money in a junior ISA is locked away until your child is eighteen. So if you're putting money in a junior ISA, you don't need access to it, they don't need access to it because by definition, you're locking it away till they're eighteen. And the second question, money you're putting away for the long term. Well, unless you're starting in their late teens, you are by definition putting money away for the long term. So junior ISAs absolutely sit in that sweet spot of when it is right to consider investing.

• 33:51Martin Lewis?

  And there are many choices. I think if you're putting money away for a young child and you're going to be putting money away over a, by definition, over a long period in a junior ISA, there's an argument you are subserving them quite substantially by not putting at least some of that into a shares ISA. Now, let me be plain, you can only have one cash junior ISA. You can only have one shares junior ISA, but you are allowed to have a cash junior ISA and a shares junior ISA. So if there is a nervousness that I don't want to put it all into a shares junior ISA, you can have both and you can put some in each, you can put, as long as you're not putting more than a total of nine thousand in both in a year, that works really well.

• 34:34Martin Lewis?

  As for where you get your junior ISA and what you put the money in, well, we have to be careful. You know, the obvious beginner type stuff is a tracker fund which tracks a market performance like the S and P five hundred top US companies or the FTSE one hundred top UK companies. We did our investment programme and talking about beginners investing and Ed Marshall, who's a financial planner at Dean's Wealth Management, said this when I mentioned that on the investment programme and asked about it.

• 35:01Speaker 04

  That's right, but you want to be out, you want to be more than just the FTSE one hundred, all the S and P five hundred. If you look at the MSCI World Index, you've got the world's largest two and a half thousand companies. But then you can buy global tracker funds that will buy even more than those two and a half thousand shares. So instead of just two hundred different companies, try and aim for five thousand plus different companies and try and buy the world. And that diversification will help to take risk off the table.

• 35:27Martin Lewis?

  So for those people who are considering putting money away for their kids for the long period, I mean, even if you're really risk averse, let's say you're putting a hundred quid a month, put 10, put 20 of that into a junior ISA, drip feeding it each month, which takes out the vagaries of the markets. You know, if you're investment savvy providers that let you open junior ISAs, the likes of Hargreaves, Landstein, or A.J. Bell, or Fidelity. If you're new to investing, you've got robo-investors which try and do it in the rough risk assessment based on you, you having to do very little and automatically picking funds for you, like a Viva's Wealthify and Moneyfarm. Of course, if you've got an independent financial advisor, absolutely speak to them about it. But I do need to

• 36:08Martin Lewis?

  make, we started on this, I need to be really strong. So many of you are so desperate to protect your children and build a nest egg for them for the future. But by putting it all in savings, if you're locking it away for 10, 15, 18 years, I think you're probably doing a disservice. I think there is an element of risk that you need to take in the hopes of greater growth. And some of it, I think is probably worth putting, or all of it if you choose to, in a shares junior ISA over that period. But not in one share. Let's remember, put it in one share, huge risk, could lose all your money. Put it in, as Ed said, 5,000 different companies by using a tracker fund that maps 5,000 different companies' returns. Then you're spreading the risk, you're smoothing it all out, and

• 36:51Martin Lewis?

  you're hoping, you're basically just saying, I'm putting some money in the hope that the world economy grows as it usually tends to do. And if it does grow, I'll benefit from that growth.

• 36:59Speaker 03

  Ruth Hart says, can I open junior ISAs for my grandchildren? Or does this have to be done by their parents?

• 37:04Martin Lewis?

  Got to be done by their parents. Or legal guardians.

• 37:09Speaker 03

  Dan, looking for a best high junior ISA for a nine-year-old and a 12-year-old. Both have savings they don't know about. Wink. Will be £100 a month going into each.

• 37:19Martin Lewis?

  Well, again, I would argue, at that age, you might want to look at putting some of it into a junior ISA. But £100 a month, well, the top interest would actually be the Halifax regular saver. It wouldn't be in a junior ISA. Otherwise, it's all the ones I mentioned earlier.

• 37:33Speaker 03

  Okay, Shabo, what is best way and safest way for parents of very young children to save their children's future? By way of safest, I mean, bank, bill and society, credit union, et cetera. Also for parents who are not finance savvy and those who don't know the jargon, et cetera. Well, it goes back to what you just said.

• 37:49Martin Lewis?

  Well, you see, if you ask me safer, so if I answer the question I'm being asked, right? And I think I've made my my view on on what you probably should be doing pretty plain. But to answer the question, every junior ISA and children's savings account I have mentioned is covered by the Financial Services Compensation Scheme. So that is a government-backed scheme that means in the unlikely event that financial institution went bust, you would get the first £120,000 per person, per financial institution back. Now, very few people are going to have anything close to that in cash junior ISAs. So your child's money would all be protected in every institution I've mentioned. And as long as it's a UK-regulated savings institution,

• 38:33Martin Lewis?

  which everything I mentioned has been, all the savings things I've mentioned have been, then you get that protection. So you should be focusing on rate, would be my view. Now, you might, if you're saying to me, I just want real safe, well, you've got NSNI, which is state-owned. So that doesn't have the saving safety compensation because everything in there is government-backed anyway. So there's no limit on the amount in there. But I would say, safety is one thing, but risk, it's really interesting, risk. Risk is, we are so caught up that risk is a negative term. Risk is a measure of variance. Risk means variance of outcome. So you invest in the hopes you get very substantially greater growth than savings, but accept that you might not get all of your initial money back.

• 39:16Martin Lewis?

  But on the balance of probabilities in a broad spread of assets over a long period, the vast likelihood is investing will outperform saving. So if you want to put money away safely for your kids, that that is your choice. But you might also, as I say, want to risk a little bit and cross your fingers that it hopes build them a bigger nest egg for the age, once they're aged 18.

• 39:36Speaker 03

  Okay, Duncan Harper, I started two junior cash ISAs when the children were born. One with Tesco, currently 3.25%, and the other Nationwide, currently 2.8%. I've just kept paying into them since, and I assumed I would just keep doing that until they were 18. But should I be doing anything else or moving them if I can?

• 39:54Martin Lewis?

  Well, look, I would always, those rates are not bad rates, but they're not the best rates. So, I mean, certainly if you're keeping money in cash ISAs, I would be transferring them to the best rates once a year. Leak Building Society, 3.85%. If you want online access, NSNI at 3.55%. And I would just be doing the transfer and moving them. But I would also be considering, you can transfer money from cash junior ISAs into shares junior ISAs and vice versa. So if you wanted to put some of the money they already have into a shares junior ISA, you could. Equally, you could start, keep the money where it is or transfer it to a better paying cash junior ISA. I'd always suggest that. And then, and start putting some money into shares for them. And we have many more of your children's saving and investing questions still to come. But first, let's do the tellers.

• 40:37Martin Lewis?

  Ooh, and even after we finish that, if you listen to the end of the podcast, there are even more there too. It's a bonanza.

• 40:45Speaker 03

  Tell us about the tellers.

• 40:46Martin Lewis?

  What's the cheapest thing you've ever taken back to a shop to complain about and why?

• 40:50Speaker 03

  Love this, love it.

• 40:53Martin Lewis?

  Do you want to do microfrown first? What about you? You've got one of these. This is class. I mean, I can see a column in The Guardian just on you doing this once.

• 41:01Speaker 03

  Yes, absolutely. The column writes itself. It's just, look, my craft brown, I am with you. I took a cauliflower back, 99p. This annoys me about cauliflowers as well. It looks a good size, peeled all the leaves off and I've struggled to make cauliflower cheese for one with it. I mean, it is a problem with cauliflowers, isn't it? Which I know isn't the point of the tellers. Sometimes they're all leaves and no sort of white bit. I mean, you can cook the leaves, but you buy a cauliflower for the florets, don't you?

• 41:29Martin Lewis?

  Unfortunately, I don't believe nature has a complaints department.

• 41:33Speaker 03

  Okay, well, we'll see about that. We, I'm sure we can, I'm sure we can find one. Funnily enough, I nearly took, I nearly took, only last night, I nearly took a potato back because I bought some friends for dinner and I took all the, I bought the bag of potatoes from the local shop, pulled out one of the potato, put my hand in the bag to pull out one of the potatoes and my, my fingers went straight through the middle of it.

• 41:58Martin Lewis?

  Oh, they don't want that.

• 42:00Speaker 03

  And, but then I literally, I was like, I'm going to go storming back. And I thought, hang on a minute, it is disgusting. But, I mean, the other 10 potatoes in there were all right. So I calmed down a bit, but I, I'm, you know.

• 42:13Martin Lewis?

  What, what happened to microfrown? You've left us all on tenterhooks, Adrian.

• 42:16Speaker 03

  Um, well, I'm delighted to say they were quite surprised that I've taken it back. He's 99p cauliflower, but they let me pick one I was happy with and sent me on my way.

• 42:27Martin Lewis?

  Now, this is my favourite one of the whole lot, the next one. It doesn't really fit in with the sort of theme I was trying to do that well, because it is a legitimate error. But it did make me laugh out loud, so I'm glad I get to read it. This is from Sir Jack 22. Took Jurex back to the chemist, was given them in a brown paper bag. And asked for erex for box of wax.

• 42:51Speaker 03

  Oh, I've got a story about when I first bought Jurex ever. And, uh, but I'll have to run it past editorial policy to see whether I can tell it to you.

• 43:00Martin Lewis?

  Well, you need, you need to keep yourself protected that.

• 43:02Speaker 03

  Yes, that's very good. Uh, Jude, Jude Parsons, my son, then 11, bought a yo-yo for a pound. Twenty yards down the road, it broke. He took it back and they tried to tell him he'd been playing with it wrong.

• 43:16Martin Lewis?

  I've had a lot of up and down experiences with yo-yos myself, to be honest.

• 43:18Speaker 03

  You said they didn't know.

• 43:22Speaker 03

  Can you stop with the punning? This is important material, this is. Anyway, Jude says, um, so Jude says they, they didn't know my son. He explained at length his rights and their obligations. He got his money back.

• 43:34Martin Lewis?

  Love, I love your son Jude.

• 43:35Speaker 03

  Yes.

• 43:36Martin Lewis?

  Jude should come on the show. Victor. Three pound bunch of flowers. Label said they last five pounds, but they only lasted three. Begrudgingly got my money back. I say begrudgingly because the young lady made her thoughts on the trivial amount very obvious. That just made me chuckle as I left. When you buy goods, I mean, I always say that my mnemonic that I came up with 20 years ago now on a, on a journey to the Jeremy Vine radio show. Is that if you buy something, it, you, it's the sad fart rules. And I think these tellers really are sad farts. And I say that with all the plaudits it implied. Sad fart stands for you buy something, it must be satisfactory quality. That's your S. As described, so now we've got sad, fit for purpose. The next bit I had to cheat on because I couldn't quite work it out a better way. And.

• 44:21Martin Lewis?

  Last a reasonable length of time, satisfactory quality as described, fit for purpose and last a reasonable length of time. Now, clearly, three pound bunch of flowers, label said they last five days, they only last three, was not as described. So it fell down before we even got to the fart, it fell down just on the sad. You are quite right, Jude Parsons. You had a right to a full refund. Go on.

• 44:42Speaker 03

  Jonathan Mahix or Mahikes Pearce says in 1991, I took a 60p cheese salad roll back to a local corner shop. Why? Well, because it had no butter in it, or cheese, or salad. I mean, he's got a strong case there. Basically, give me an uncut lump of bread in a bag.

• 45:02Martin Lewis?

  We're seriously falling down on the as described element of your consumer rights in that. Erica, a balloon. I bought an eight and a zero for my dad's 80th birthday party. Could have been your eight year old's party, but why you'd have added the zero at the beginning, I don't know. Went to inflate them at the venue and the eight was an S. So you can't put balloons that said so.

• 45:21Speaker 03

  Or Oss.

• 45:23Martin Lewis?

  Took them both back two days later as one was no use without the other and I got my two pounds back. Well done.

• 45:28Speaker 03

  Glad to hear it. Kirsty's dad took a chip pan back as one of the cheapest models they did and several years old, so well past the guarantee period, visibly well used, all the writing had come off, and greasy. Through sheer pity, apparently, they took pity on him and replaced it without any issue. Kirsty was mortified.

• 45:49Martin Lewis?

  I love it. We'll do a few more of these, then we shall get back to the zero stuff. Sally, a pack of eye makeup remover wipes, 99p. They were mouldy and I thought it was dangerous that they went on our eyes and they should know. They just looked at me like I was mad, threw them in a bin and got me another pack. I actually think you probably saved them from an environmental health type issue going on. I think you did a really good job. There's nothing funny in that. Moldy wipes for your eyes are not good, are they?

• 46:10Speaker 03

  And Sue Pounder once wrote to Roundtree as all her tutti frutti's were green. They sent a one pound cheque and a lovely explanation of quality control.

• 46:21Martin Lewis?

  Green tutti frutti's, I'd be jealous. Not the best pump.

• 46:24Speaker 03

  Do you want to do one more?

• 46:25Martin Lewis?

  Let's do Betsy Dent. A 40p bag of popcorn. When I opened it, it was full of packing foam peanuts. Turned out it was a display case that should have been in a shop. The shop advised to contact the manufacturer and I ended up with a 10 pound voucher as an apology. The bizarreness of the situation made me return them.

• 46:53Martin Lewis?

  Hello and welcome to My Money Mastermind. Adrian, the score stands that you've got 18 right and 36 wrong in this three option multiple choice quiz, which means sadly you are

• 47:14Martin Lewis?

  no better than random chance. But after your triumph in finally getting a question right last week, you're now on the cusp. It could all get better. Yes, indeed. Adrian got it right last week. And as I think positive reinforcement is important, I want to state publicly, I think Adrian deserves a lot of credit. And sadly, with his truly awful budgeting skills, that's highly necessary too. See where I was going there. I mean, I have to say, I wrote this question a few weeks ago, but you haven't got one right for so long. It's just been sitting there waiting until I could do it the week you got it right. So I could make that terrible pun. Adrian, today's question is all about credit or debt, if you prefer. It's a simple question. I would like to know which of these

• 47:56Martin Lewis?

  three has the highest interest rate? A buy now, pay later, paying three from Klarna, HSBC's purchases credit card standard APR rate, so not including any 0% period, or Nationwide's standard overdraft rate? So buy now, pay later, paying three from Klarna, HSBC purchases credit card standard rate, Nationwide's standard overdraft rate?

• 48:25Speaker 03

  Obviously, well, I, I think I've heard you say a million times that credit card debt, you know, debt on credit cards is the most expensive kind. So unless HSBC have got a kind of special offer on.

• 48:41Martin Lewis?

  So I'm going to be very nice to you at this point.

• 48:43Speaker 03

  Yeah.

• 48:44Martin Lewis?

  And tell you that I gave you specific brands because otherwise it would be too generic. But the question is not brand specific. All the accounts I've chosen are roughly standard for a high street version of what you're doing. So it would be, you know, be the same if it was Barclays, it'd be the same if it was.

• 49:01Speaker 03

  Yeah, okay.

• 49:02Martin Lewis?

  Yeah.

• 49:03Speaker 03

  Um, just what's the Klarna one again? I'm not so familiar with that.

• 49:06Martin Lewis?

  Buy now, pay later, paying three from Klarna.

• 49:10Martin Lewis?

  HSBC Purchases Credit Card, Nationwide Standard Overdraft Rate. By the way, for those listening at home at this point, this is where you need to say your answer out aloud, then you're locked in and then you can see if you got it right because you can't go later. Oh yeah, I thought it was, I was gonna, I want you to say it now, your answer, just before Adrian says his.

• 49:29Speaker 03

  Okay. My answer is.

• 49:32Martin Lewis?

  And tell us why.

• 49:34Speaker 03

  Well, because I think, I don't see why it should be any less true that credit card debt is the worst. And if Klara have come on the market with their product, which I don't actually fully understand, but I can't believe, I'm not saying it's a, you know, it's the cheapest way of doing things, but it can't be any worse than credit card debt, surely. So I would go B, credit card.

• 50:00Martin Lewis?

  Can we lock that in?

• 50:02Speaker 03

  Lock it in.

• 50:03Martin Lewis?

  That's where you're meant to play the lock-in music.

• 50:05Speaker 03

  Let's have the lock-in music.

• 50:06Martin Lewis?

  Have we got the lock-in music?

• 50:07Speaker 03

  Have we got it?

• 50:08Martin Lewis?

  It's meant to be a tension bed.

• 50:10Speaker 03

  No.

• 50:12Martin Lewis?

  I'm not going to do it myself. We'll do it. So to everybody, add the tension bed music to yourself. Okay, so Adrian, you're locked in at HSBC Purchases Card Standard APR. Well, if you had chosen buy now, pay later, paying three from Klara, you'd be wrong. Buy now, pay later does not have interest. It is interest free. My issue with buy now, pay later isn't the cost. I mean, you're only spreading the cost over three months. My issue is that many people don't actually realise that they have a debt, that buy now, pay later is a debt. It may be an interest free debt. It may be only spreading the cost over three months, but you're still entering the debt market and we are very soon finally about to see buy now, pay later become regulated under the Consumer Credit Act in the same way as other forms of credit

• 50:55Martin Lewis?

  regulation, which I'm pleased to say. So it definitely was an A, which leaves us with HSBC's Purchases Card and Nationwide Standard Overdraft Right. And Adrian, you are absolutely right that one of those is the product I always say is absolutely the worst form of high street borrowing and should be avoided.

• 51:14Speaker 03

  However.

• 51:15Martin Lewis?

  It is not a credit card. It's an overdraft. Play the uh-uh.

• 51:21Martin Lewis?

  So typical high street credit card, including HSBC, interest rate 24.9%. Typical high street overdraft, and Nationwide has a £50 buffer, so it's above that. So it's an interest free buffer of £50, interest rate 40%. Overdrafts almost invariably are the worst form of borrowing, but people don't feel like they're borrowing. And worse, there are many people out there who are overdrawn at 40% interest and then are using the money from their overdraft at 40% interest to pay off their credit card at 24.9% interest, which is actually cheaper. Whereas you'd be better just to pay the minimum on the credit card and try and reduce your overdraft. It is

• 52:04Martin Lewis?

  an absolute must remember that overdrafts, ever since the regulator changed the way that overdrafts operate from going from a fee and completely bastardised the market, in my view, just at the start of the pandemic, overdrafts for pretty much all high street banks are all locked in at 39.9%, way more than a high street credit card. Clearing your overdraft, if you have one, unless you happen to have one of the few that's in a buffer zone or at 0%, is normally your financial priority over clearing credit cards. Treat your overdraft like a debt. In your head, you want to be saying, I want to pay £100 a month off. What does that mean? Well, if you're currently £600 overdrawn, at the start of next month, once you've been paid, you want to be £500 overdrawn. It's very difficult to think of it conceptually with overdraft, which is why it's really dangerous

• 52:47Martin Lewis?

  that it's at 40%. So I'm afraid it's not a good situation for people with overdrafts out there. First Direct, by the way, has a £250 0% overdraft buffer and is currently paying you £175 to switch. It won't move your overdraft for you. You'd have to pay that off at the old bank, but you could effectively do it with the money in the new bank. And there's lots of other ways to save on overdraft. Adrian, you got it wrong. I'm so sorry.

• 53:09Martin Lewis?

  Oh, and that is the end of the five live bit of the podcast. Adrian got it wrong again. I was so hoping we were going to be able to play better than random chance, but no. And I have to say, and I shouldn't be whinging when it's just us and he's not here. But, and it's podcast producer Matt this week, by the way. Hello, Matt.

• 53:29Speaker 05

  Hello.

• 53:30Martin Lewis?

  Yes.

• 53:30Speaker 05

  I'm back.

• 53:31Martin Lewis?

  You're back. And to confuse those who are expecting Simon on this pod and Matt from the Question Time pod, Matt is here this week on the Big Topic pod. So my frustration on this is Adrian said, Matt, he was like, so I know, I think you've said it many times, that the worst type of high street debt, and I'm thinking, yes, I've said overdrafts. I've always said overdrafts. This is what I've said it. We must have done it. I must have said it 10 times. And he goes, his credit cards.

• 53:57Speaker 05

  Credit cards.

• 54:00Martin Lewis?

  I thought you had it. You'd set it up like you had the answer. And no, anyway.

• 54:05Speaker 05

  Also, he didn't know what Klarna was.

• 54:08Martin Lewis?

  No, that's not such a bad thing. He hasn't been using it, but there we go.

• 54:11Speaker 05

  Fair enough.

• 54:12Martin Lewis?

  Yeah, but yes, I think that's also a generational thing. Someone your age, you definitely know what buy now, pay later is.

• 54:17Speaker 05

  Yes, but my parents wouldn't.

• 54:19Martin Lewis?

  Yeah. And that's what Adrian, how old are your parents, Matt?

• 54:22Speaker 05

  Younger than Adrian.

• 54:23Martin Lewis?

  Younger than me?

• 54:25Speaker 05

  Hmm, similar age. I think you and my mum are the same age. When were you born?

• 54:30Martin Lewis?

  1972.

• 54:31Speaker 05

  Oh, no, she's a bit older than you.

• 54:33Martin Lewis?

  Phew, yes. Right. So we've got a few more children's savings questions to do, just to finish off the list. Thanks to everybody who got in touch with all of your questions. Hopefully we've managed to answer most of them. What have you got for me?

• 54:47Speaker 05

  I've got one from Miss Gigler.

• 54:48Martin Lewis?

  Nice name.

• 54:49Speaker 05

  She says, why are there no, if any, at all fixed rate cash junior ISAs? Can you advise of current or best fixed cash junior ISAs? Also, she says, do junior ISAs sit outside or are they exempt from inheritance tax?

• 55:07Martin Lewis?

  Yeah, I mean, there are very few. I can't think of any fixed rate cash ISAs off the top of my head that are available to the open market. I think there's one or two that are sort of available to existing customers of small building societies. The reason's quite simple. Fixed rates are done so that a bank and building society can lock away your money. I mean, that's why they offer fixed rate savings. They can lock away your money. They've got a guarantee they've got your money in place for a set term. Well, in a junior ISA, your money's locked away until the child is 18, so you've got that lock away. And yes, well, I would always be suggesting you transfer it to a better payer. Actually, most people don't so that they have some surety your money is going to stay there.

• 55:47Martin Lewis?

  Also, you have that interesting point in a junior ISA that you have a fix for three years and then the fix matures. And then it's moved into easy access, but you're still with the same people and you can't get the money out. So it's never been, you will have noticed when I was talking earlier that junior ISA rates are lower than the top children's savings rates. I think it's a captive market issue, to be honest. You know, even with cash ISAs, you can take your money out. Junior ISAs is a proper government lock away until your child or until the child is aged 18. Second part of the question, the tax-free element of junior ISAs is all about the income on savings, that's interest. On shares, that's dividend and the capital gains on any growth if you're buying within a shares ISA.

• 56:31Martin Lewis?

  It is not a protection from inheritance tax. So if there is money in a junior ISA and heaven forbid that child were to pass away.

• 56:43Martin Lewis?

  Then it would count towards their inheritance tax allowance, although most children don't have that many assets. Actually, as I say that, I was thinking, why would anyone be asking that question unless your child had already been left a lot? And it was in, had a huge estate. I'm thinking what you probably mean is if you put money into a junior ISA for a child. Does that money you have given them count for inheritance tax? There are no special rules, is basically the answer. So if you're giving a child money to go in a junior ISA, it doesn't instantly go bing. It's not inheritance tax. You have the same you must live seven years rule that you have from gifting money in any other way. Although there are lots of different gift allowances and you can give money from income.

• 57:27Martin Lewis?

  For that, you need to listen to the inheritance tax podcast, which I can't remember when it is. By the magic of editing, Matt is about to say it now.

• 57:35Speaker 05

  It was the 5th of March this year.

• 57:37Martin Lewis?

  He said it, hopefully.

• 57:39Speaker 05

  I hope so.

• 57:41Martin Lewis?

  When we did that podcast, listen to that, but that junior ISAs aren't special inheritance tax. If you're giving money for someone to put in a junior ISA, it's just the same as other money. What have you got next?

• 57:49Speaker 05

  One from Vanessa. She says, "My son has had a junior shares and investment ISA since he was born. We pay into it monthly. My bank only issue statements every six months and there's no way to see this investment online. Unsure if this is a common feature for this type of account. I have considered changing it to a junior cash ISA, but the process was so complicated with very complicated forms that I've not had a chance to do it. So my questions are, A, is this a good move? And B, if so, is there an easy way to transfer this money?"

• 58:21Martin Lewis?

  Well, ultimately, if you're transferring from a shares ISA to a cash ISA, you're selling all the shares and funds that you have. So that's quite a big decision. You're choosing, "This is the moment I want to liquidate all of that investment and turn it into cash." And as you've heard earlier, I don't know the age of your children, but if you have quite a long time to go, you hear, "I'm pretty favourable for looking at it as an investment rather than savings." I just think you probably have a pants shares and investments ISA. I mean, many, all the ones I mentioned, you can see every day the amount in your investment. You mean, some of the apps that you have for these things, you can actually see the changing the value of your investment, you know, by the second as you're watching it.

• 59:01Martin Lewis?

  So I think what you could do, especially if you've got them in sort of open market type funds, so what I mean by that is you've got a platform, an investment platform, which you can buy different shares and funds in. And let's say you've got a fund from, whether it's Blackrock or whether it's Schroders or somebody like that, that's a generic fund that you've chosen to put in the platform. So you'd be able to buy the same fund in a different platform, exactly the same fund. So if you were doing that, you would be able to transfer to another platform, check the platform charges, though I suspect the way that yours is operating, it isn't that cheap because it tends to be, if they're not giving you statements, that often the service doesn't sound that good. And you might want to have

• 59:42Martin Lewis?

  a look at moving it to another shares ISA platform. If you want to move it to cash, you can do so. It's all about filling in the transfer form. Occasionally, although less with junior ISAs than with general shares ISAs, but there may be, a firm might often offer you a cash incentive to transfer to their shares ISA or shares ISA platform.

• 1:00:02Martin Lewis?

  And your final question, Matt.

• 1:00:03Speaker 05

  Final question.

• 1:00:04Martin Lewis?

  Because I knew you had three, you see, and I've been counting.

• 1:00:06Speaker 05

  Yes.

• 1:00:06Martin Lewis?

  Counting as I speak, I mean, it's amazing.

• 1:00:08Speaker 05

  It's impressive, your mind, honestly. It's from Claire, she says junior ISA slash ISA advice for older children who only have maybe three to five years to invest.

• 1:00:20Martin Lewis?

  So, well, it's an interesting premise. So what I don't know in the question is whether the only three to five years to invest means they've only got three to five years until the end of their junior ISA, or that they will need to actually use the money in the junior ISA in three to five years. And that, which one of those it is, does change the answer quite significantly, so let me try and answer both. If they've only got three to five years left before they get hit 18, so their junior ISA is no longer a junior ISA, what happens at the point you hit 18 with the junior ISA if you don't take the money out, which you're entitled to, is the money will transfer into a, the same equivalent adult version. So if it's a junior cash ISA, it will become a cash ISA.

• 1:01:05Martin Lewis?

  If it's a junior shares ISA, it will become a shares ISA in the same investment. Now, at that point, you would want to check, is this the best cash ISA for me? Is this the best shares platform and shares investment for me? Because it's sort of automatically being ported and you want to, it'll probably be moved into a, not a good cash ISA rate, because they tend to always, when they move, when something matures, they put them in not such a good cash ISA rate. So you'd have to do the checks at that point. But if you're just saying because they're going to hit 18 at that point, well, certainly if it's an investment ISA, you could, if they want to keep the money put away, they could continue to invest it in probably almost exactly the same fund, or the same investments that they had in an adult ISA, shares ISA, as they can in a junior ISA. So that isn't an end.

• 1:01:48Martin Lewis?

  If however, you're saying to me, the other one, which is it's only three to five years until they're going to need to access the money. Well, depending, I would normally say you're investing is for people putting money away more than five years, but some do say putting it away more than three years. And certainly if you've got an idea to invest and they might not want to take the money out, I mean, it's all the same stuff I talked about earlier. You're still going to want a broad spread of investment, you're absolutely wanting, if it's over three years, you want it to be as broad as possible, because you're slightly at the edge of playing the vagaries of markets going up and down. So I think the choices don't differ that much, but the risk does increase, because the reason we say...

• 1:02:29Martin Lewis?

  You want to be doing it over five years is you want to smooth out any short term market moves. I mean, you can see that at the market at the moment. Now, once the Middle East conflict started, share prices dropped. They've mostly come back, depending which index you're looking at at the moment. But those type of things, what you don't want to be doing, and this goes back to the previous question about transferring to a cash ISA, is crystallising at the wrong moment. I mean, the truth is, when you're buying and selling shares, the only price that matters is what price you buy the all funds, what price you buy the fund at and what price you sell the fund at. And so what you don't want to be doing, and this is why it's always money you don't need to access, you don't want to be forced into accessing that money and crystallising, you know, at a point that you wouldn't normally choose to, maybe when the shares are low, or maybe when the the

• 1:03:14Martin Lewis?

  economy, there's just been some bad international news that's dropped everything. And that's why we talk, one of the reasons we talk about longer periods. I think that's probably an end, isn't it? We've done lots on this. Hopefully, this was a very big ickle subject.

• 1:03:27Martin Lewis?

  And that's it for this week. We tend to put out a new episode every Thursday and Monday. Monday is the Question Time podcast, where you can ask me absolutely anything and everything, open brackets, within reason, close brackets. If you've enjoyed it today, please do tell your friends you've been listening to the Martin Lewis podcast. And why not leave us a review and subscribe? Then your pockets will be pleased with you. And if you haven't enjoyed it, and you've been listening this long, ha, ha, ha, ha, ha, you've wasted your own time. Not my time. I was doing it anyway. You had the choice to turn it off. You didn't. Not my problem. See ya.

• 1:04:17Speaker 06

  Martin Lewis is the founder of MoneySavingExpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing [email protected]. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

• 1:04:58Speaker 01

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