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

23:54Martin Lewis:and you can also put up to£9 ,000 per tax year in a junior ISA. OK, Tracey 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? 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 ISA's 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, they're sort of in this regime, depending on exactly their birthdays.

24:37Martin Lewis: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, I would be transferring it to a junior ISA. If your child has money in a shares child trust fund, what investment advisors 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 to. Claire Spencer, my daughter is 16 and has money in the government trust fund.

25:19when the government gave£500, we continued paying into this. Is it best to keep the money there or transfer to an ISA? She also has a considerable amount in a savings account. The account is in my name, but is on behalf of her.

25:35Martin 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 advisors 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 name and using up your various allowances to do so.

26:11OK, Rebecca Connor, I'd like to know if there's a sensible way to save for our son, age 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. OK, you're talking saving and you're talking accessing money, so we're now talking about children's savings, not junior Isis. The money in junior Isis locked away. Gone.

26:38Martin Lewis:Locked away behind a door. That was my sort of jail noise. Very good. Thank you very much. So let's have a look. But top easy access savings for kids is the nationwide FlexOne Saver. Pays 5 % interest on up to£5 ,000, but your child has to be aged 11 to 17 to open it. Top payer that would apply in this case for a three-year-old is the 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 7. It doesn't have to be a parent. Junior Isis 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.

27:25I think it's worth noting there's a thing called Kids Regular Savers, which pay more.

27:33Martin Lewis: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 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 7.

28:31It is much more difficult for a child under 7 and that is the point of Halifax it lasts for a year and then the rate is pant 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

28:45Martin Lewis: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 okay and ellis i want to pay into a saving scheme for my niece and nephew how can i do this in their name with restricted access until they're 18 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 good with money and might take their kids money and it does happen then a junior riser even though it's open by the parents is totally protected because the money's locked away until they're 18 and then it's a chance 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 of parents make when putting money away for their children here you go carol has just had a baby congratulations carol i want to buy stock on behalf of him and so we can access them when he's 18 which account should i set up for him yeah we finally got a 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.

30:25When 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 the past 10 years in a S &P 500, you would have, you know, I can't remember what the factor is, factor of 20 times more than you would have done doing it in savings, which wouldn't have beaten inflation.

31:04Martin Lewis: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 compounded.

31:36And 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 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£1 ,000 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 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 to buy what£1 ,000 would have bought you with when you first put it in.

32:45Now let's contrast that to a couple of different tracker fund investment options. If you had put the£1 ,000 in a global tracker and had the dividends reinvested, by the end of the 10 years you would have made£1 ,980. In other words you'd have got£2 ,980

33:02Martin Lewis:back. A massive difference, far above inflation and smacking the pants off savings. If you'd gone to put it in the S &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. So that's your original£1 ,000 plus another£2 ,790 on top. Consets that to just the£270 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 &P 500 would outperform in that period.

33:46Martin 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 come back. And the reason when we start talking about junior ISAs, they are absolutely ripe as a choice for investing, not saving. 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?

34:21And 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 18. 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 18. 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. And there are many choices.

34:57I think if you're putting money away for a young child and you're going to be putting money away over, 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.

35:20Martin Lewis: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 9 ,000 in both in a year. That works really well. As for where you get your junior ice from, what you put the money in, well, we have to be careful. The obvious beginner type stuff is a tracker fund, which tracks a market performance like the S &P 500, top US companies, or the FTSE 100, 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.

36:05That's right. And you want to be more than just the FTSE 100 or the S &P 500. 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 200 different companies, try and aim for 5 ,000 plus different companies and try and buy the world. And that diversification will help to take risk off the table. So for those people who were 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 100 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.

36:46You know, if you're investment savvy, providers that let you open junior ice are the likes of Hargreaves, Lansdine 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 with you having to do very little and automatically picking funds for you like Aviva's Wealthify and Money Farm. Of course, if you've got an independent financial advisor, absolutely speak to them about it. But I do need to 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.

37:21But 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 you're hoping you're basically just saying I'm putting some money in the hope that the world economy grows as it

38:00Martin Lewis:usually tends to do and if it does grow I'll benefit from that growth. Ruth Haar says can I open junior ISIS for my grandchildren or does this have to be done by their parents? Got to be done by their parents or legal guardians 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 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 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 building society credit union etc also for parents who are not finance savvy and those who don't know the jargon etc what it goes back to what you just said 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.

39:04Every 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 ISIS. 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, which everything I mentioned has been, all the savings things I've mentioned have been, then you get that protection.

39:42So 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 NS &I, 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.

40:20But on the balance of probabilities in a broad spread of assets over a long period the vast likelihood is

40:26Martin Lewis: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 age 18 okay uh duncan harper i started two junior cash isis when the children were born one with tesco currently 3.25 percent the other nationwide currently 2.8 percent 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 well look i would always those rates are are not bad rates but they're not the best rate 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 a transfer and moving them.

41:16Martin Lewis:But I would also be considering you can transfer money from cash junior icers into shares junior icers and vice versa. So if you wanted to put some of the money they already have into a shares junior icer, you could. Equally, you could start keep the money where it is or transfer it to a better paying cash junior icer. I'd always suggest that. 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. Oh, 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 tell us about the tell us what's the cheapest thing you've ever taken back to a shop to complain about i love this love this love it who do you want to do mycroft brown first you've got one of these this is class i mean i i can see a column in the guardian just on you doing this once yes absolutely the column writes itself it's just look it's mycroft 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'd struggle 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 teller 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 unfortunately i don't believe nature has a complaints department Okay.

42:37Well, we'll see about that. I'm sure we can find one. Funnily enough, I nearly took a... Only last night. I nearly took a potato bag because I bought some friends for dinner and I bought the bag of potatoes from the local shop, pulled out one of the potatoes, put my hand in the bag to pull out one of the potatoes and my fingers went straight through the middle of it. Oh, they don't want that. 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 ten potatoes in there were all right. So I calmed down a bit. But I'm, you know.

43:17What happened to Mycroft? You've left us all on tenterhooks, Adrian. Well, I'm delighted to say they were quite surprised that I'd taken it back. He's 99p cauliflower. But they let me pick one I was happy with and sent me on my way. 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 Durex back to the chemist. Was given them in a brown paper bag. I'd asked for Erex for box earwax.

43:55I've got a story about when I first bought Durex ever. But I'll have to run it past editorial policy to see whether I can tell it to you. Well, you need to keep yourself protected. Yes, that's very good. Judy Parsons. My son, then 11, bought a yo-yo for a pound. 20 yards down the road it broke. He took it back and they tried to tell him he'd been playing with it wrong.

44:20Martin Lewis:I've had a lot of up and down experiences with yo-yos myself, to be honest. Like you said, they didn't know. Can you stop with the punning? This is important material. Sorry. Anyway, Jude says, Jude says they didn't know my son he explained at length his rights and their obligations he got his money back. I love your son Jude Jude should come on the show Victor £3 bunch of flowers, label said they last £5 but they only lasted£3 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 journey to the Jeremy Vine radio show is that if you buy something, it's the sad fart rules.

45:08Martin Lewis: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 last a reasonable length of time. Satisfactory quality as described. Fit for purpose. 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.

45:42Martin Lewis:You are quite right, Jude Parsons. You had a right to a full refund. Go on. Jonathan Mahiques, or Mahiques Pierce, 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, you're giving me an uncut lump of bread in a bag. 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.

46:19Martin Lewis:Went to inflate them at the venue, and the eight was an S. So you can't put balloons that said so. Or os. Took them both back two days later, as one was no use without the other and I got my£2 back. Well done. 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. I love it. We'll do a few more of these then we shall get back to the zoo.

46:56Martin Lewis:Sally, a pack of eye make-up remover white, It's 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 pat. 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. Mouldy wipes for your eyes are not good, are they? And Sue Panda once wrote to Roundtree as all her tutti-fruities were green. They sent a£1 cheque and a lovely explanation of quality control. Green tutti-fruities, I'd be jealous.

47:28Not the best part.

47:29Martin Lewis:Do you want to do one more? 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 voucher as an apology. The bizarreness of the situation made me return them.

47:57Hello 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... N-B-R-C. 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.

48:45I 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 can 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 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.

49:19Martin Lewis:So buy now, pay later, paying three from Klarna, HSBC purchases credit card standard rate, Nationwide standard overdraft rate. Talk me through. Well, 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. So I'm going to be very nice to you at this point. Yeah. And tell you that I gave you specific brands because otherwise it would be too generic. But the question is not brand specific. Okay. All the accounts I've chosen are roughly standard for a high street version of what you're doing.

50:03Martin Lewis:So it would be, you know, it would be the same if it was Barclays. It would be the same if it were. Yeah. Okay. Yeah. Just what's the Clara one again? Tom, I'm not so familiar. Now pay later, paying three from Klarna. HSBC purchases credit card, nation-wide 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've got it right. Because you can't go later. Oh, yeah, I thought it was that. I want you to say it now, your answer, just before Adrian says his. Okay. My answer is...

50:36And tell us why. Well, because I think I don't see why it should be any less true that credit card debt is the worst. And if Clara 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 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. Can we lock that in? Lock it in. That's where you're meant to play the lock-in music. Let's have the lock-in music. Have we got the lock-in music? Have we got it? It's meant to be a tension bed. No. I'm not going to do it myself.

51:18We'll do it. So 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 Payne 3 from Klarna, 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.

51:51And 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 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

52:16Martin Lewis:and should be avoided. However. It is not a credit card. It's an overdraft. Play the uh-uh. 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 them 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.

53:04Martin Lewis:Whereas you'd be better just to pay the minimum on the credit card and try and reduce your overdraft. It is 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.

53:36Martin Lewis: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 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.

54:07Martin Lewis:And there's lots of other ways to save on overdrafts. Adrian, you got it wrong. I'm so sorry.

54:14Oh, and that is the end of the Five Live bit of the podcast.

54:18Martin Lewis: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. Hello. Yes. I'm back. 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.

54:54Martin Lewis: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. Credit cards. And I just went. I thought you had it. You'd set it up like you had the answer. And no, anyway. Also, he didn't know what Klarna was. No, no, that's not such a bad thing. He hasn't been using it, but there we go. Fair enough. Yeah, but yes, I think that's also a generational thing. Someone your age, you definitely know what Buy Now, Pay Later is. Yes, but my parents wouldn't. Yeah, and that's what an age you're in. How old are your parents, Matt?

55:26Martin Lewis:Younger than Adrian. Younger than me? Similar age. I think you and my mum are the same age. When were you born? 1972. Oh, no, she's a bit older than you. 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? I've got one from Miss Giggler. 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?

56:11Martin Lewis:Yeah, I mean, there are very few. I can't think of any fixed rate cash is 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 is 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 you 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 and actually most people don't so that they have some surety your money is going to stay there also you have that interesting point in a junior ISA that you 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 just 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.

57:09Martin Lewis:I think it's a captive market issue, to be honest. 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. 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, then it would count towards their inheritance tax allowance.

57:52Martin Lewis:So that 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 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.

58:28Martin Lewis:although there are lots of different gift allowances and you can give money from income. 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. It was the 5th of March this year. He said it, hopefully. I hope so. When we did that podcast, listen to that. But junior ISAs aren't special in 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? One from Vanessa.

59:23She says, money. 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.

59:32Martin Lewis: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, all the ones I mentioned, you can see every day the amount in your investment. I 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.

1:00:05Martin 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 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 a look at moving it to another shares ISA platform.

1:00:50Martin Lewis: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 JISA platform. And your final question, Matt. Final question. Because I knew you had three, you see, and I've been counting. Yes. Counting as I speak, I mean, it's amazing. 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?

1:01:24So, 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.

1:01:40Martin Lewis:And 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 the same equivalent adult version. So if it's a junior cash ISA, it will become a cash ISA. If it's a junior a 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?

1:02:19Martin Lewis:Is this the best shares platform and shares investment for me? Because it's sort of automatically being ported and you want to 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 shares ISA as they can in a junior ISA.

1:02:51Martin Lewis:So that isn't an end. 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 more 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 absolutely want it if 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 you want to be doing it over five years is you want to smooth out any short-term market moves.

1:03:39Martin Lewis:I mean, you can see that 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 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 or 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 economy, there's just been some bad international news that's dropped everything.

1:04:21Martin Lewis: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. And that's it for this week. We intend 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.

1:04:53And if you haven't enjoyed it and you've been listening this long, ha, ha, ha, ha, ha, you've wasted your own time.

1:05:00Martin Lewis:Not my time. I was doing it anyway. You had the choice to turn it off. You didn't. Not my problem. See ya. I got bills. I got to pay. So I'm going to work, work, work, every day. I got a mouth. I got a fee. I got a fee. So I'm going to make sure everybody eats. 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 martinlewispodcast at bbc.co.uk. 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.

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