The Top Children’s Savings & Investment Accounts | Car Finance Mis-selling Update

26:11But you could also go for a smaller tech stock tracker that tracks an index of small company tech stocks with high growth. So all a tracker is, is it's a passive as opposed to an active investment. What that means is that instead of paying a fund manager to pick shares for you, it simply uses a computerized algorithm to pick shares to match an indices. So the tracker in its own right, you know, it depends what it's tracking. So, you know, there's big arguments, active versus passive. I don't particularly want to get into it, but the advantage of a tracker is the charges are lower. So you tend to keep more of your growth.

26:54And unless an active fund with higher charges would have to outperform significantly a passive fund for an order for it to beat it. So I would suggest that when you dip your toe in the water and I can't give you individual funds. I'm sorry, it's a regulated issue. But you look at what you want to track, and you maybe have a mix of different trackers. And certainly, you know, you could track tech stocks. I'm not saying they'll do well. I'm not saying they'll do badly. But because you're within one sector, implicitly that's a higher risk than tracking a whole broad range of sectors, which is what you'd get in a global index tracker or a FTSE 100 tracker.

27:29Does that make sense? Yeah, yeah, yeah. And, you know, there are lots of good websites, Motley Fool, Triple I, and the platforms like Hargreaves Lansdowne that have loads of investment guidance and writing that you can go and read on this. But keep it as a nice broad spread to start and then gradually learn what you're doing over the years and do it that way. Sounds good. Cheers Chris, thank you very much. Let's go to Becky in Burnwood. What have you got Becky? Hi, I have, my children are inheriting£2 ,000 and I need to put it into an account that they can't access until they turn 18. So I've been looking at a junior ISA, but I was just wondering, is there anything specific I should be looking out for before opening an account or whether there are any better suppliers that I could open an account with?

28:22Well, if you're going for a junior cash ISA, then you are, you're just talking best interest rates. Coventry Building Society is 4%, postal branch only. The top online is NS &I at 3.55%. So no brainer, put it where the money is. Remember though, just like any other ISA, if they were to drop the rates in future and no longer be good, you have a right to move it to another junior ISA. You can't take the money out, but what you do is, and just for anyone who's got a junior ISA that's not paying good rates, is you go to a new junior ISA provider, you fill its application form on the application form there's a transfer section and you just apply to transfer the money across so don't see it as a done deal but the big question a bit like our last caller is are you thinking savings or are you thinking investing it's only two thousand pounds so i would assume just saving well you could argue it the other way around to be honest it's only two thousand pounds so you could take a risk on it and invest it and hope it grows quicker you You could do half and half.

29:22You could put half of it in a junior cash ISA and half of it in a junior investment ISA. It sounds to me like you're a little less keen on investment, a little less sure. One option to look at, I can't recommend it, but one option to look at is the robo-investing. Have you heard of that? No. So robo-investing are basically app-based platforms and they're growing where you give it your money, you give it your risk profile that you want and it selects a range of investments for you. It's basically for novice investors who aren't sure and don't have the confidence of what they're doing. And so you might, I'm not suggesting it's right for you, but you might want to have a look at something like, I mentioned them before, Aviva has got one called Wealthify.

30:05That's one of the options out there. Or Money Farm has another one if you're less secure. because you might find that, I'm not saying it's better, but you might find it easier certainly to do. Or alternatively, just put the money in the top paying junior cash ISA. There's not really that much to watch for. You're putting the money away and you can't touch it till they're 18. Yeah, OK. Wish you the best of luck with it. Cheers, Becky. Thank you very much. Thank you. Thank you for your help. Becky in Burnwood. There'll be more kids questions in the podcast. Yeah, I want to go into child trust funds, what you do with those and what you do when junior ISAs and child trust funds matures.

30:41I want to talk about children's pensions. I've got loads more. I shall be popping that all in the podcast. And if you're listening on the podcast, that means just wait a bit and it'll be coming in a while. In the news break in the programme, there was a story about lifetime ISAs and how the Treasury Committee was criticising the government for not having done enough. Unsurprisingly, because I was there, Adrian asked me about it. We just heard about lifetime ISAs, Lisa, Lysas, you never remember what we call them. So what's going on? Well, yeah, so there was a parliamentary committee. The Treasury Committee looked at evidence into lifetime ISAs.

31:20I gave evidence to that committee, I should state. And in my view, ISAs are a brilliant, brittle and broken product. And they are broken in many ways. I mean, we start with the basics. A lifetime ISA is a product you can open aged 18 to 39. And then when you save in it, you can put up to four grand a year in. if you use it to buy a qualifying first-time property, you get a bonus of 25%. So that's£1 ,000 a year free money or state-funded money that you get towards your first-time deposit. And if it works for you, it's unbeatable and brilliant. The real problem on the housing element is you have to be buying a property under£450 ,000, which is fine for most of the country, but people in the south-east of England struggle.

32:08And the really big problem is if you take the money out to use for a property and it isn't a qualifying property, let's say it's£451 ,000, you have to pay a fine to the government, a fine effectively of 6.25 % of your money. So you've saved 10 grand. They want 625 quid. You don't get back all your money. Never mind you don't get the bonus. Now, I think that is a perverse incentive. It puts people off from saving in the first place, even people it wouldn't affect, because they are scared of that withdrawal penalty. And my argument is that what should happen is, if you're buying a property, either you get the bonus or you effectively don't get a penalty and you can take your money out if it's being used to award a first-time property.

32:49Taking it out for other reasons, then they can charge you the penalty because it was never meant to be that. The Treasury Committee is also looking at the other end of this, which is a lifetime ISA can be used to save for retirement. The problem is very few providers offer it because they're scared of being done for misselling. Because for most people who are in an auto-enrolment scheme, employees at their workplace, they would be better off putting money in the pension, which is why you'll find that very few big high street banks, in fact, no big high street banks through their main offerings offer a lifetime ISA.

33:22There's a secondary problem, too, that if you're saving for it towards your retirement, then unlike pension saving that doesn't count towards as savings on universal credit, LISA savings does. So using a lifetime ISA to save your retirement as it's designed to could reduce your universal credit entitlement. That's why I say it's brilliant for those who it works for. Brittle because it's for using for two different things and it breaks in the middle. People use it for their house buying and then it stops. They don't use it for their retirement savings because most of them shouldn't. and broken because some of the rules simply don't stack up.

33:59That report went to the government and the government responded and went, well, wait a minute, and said nothing. Said nothing. And there is an opportunity in the budget for it to be fixed. I had a promise from Jeremy Hunt. He would look at it two budgets ago in the next budget, but then he didn't get elected again. And I haven't heard anything from Rachel Reeves on it, although I have written to her about it in the past. So for all those young people who are getting lifetime ICES, you just have to make sure you understand it. It could be really lucrative. I've had so many people who've had thousands of pounds of money back on the lifetime ISA.

34:32You know, two of them have saved together for three or four years and they've got three or four thousand pounds each towards their first iron deposit. Great. I've also had loads of complaints for people who've been absolutely stuffed by it. And it seems to me if we're going to have a product like that we should make sure it's working.

34:48Should we do some tellers? Let's do some tellers indeed. This week's tellers, what moment in your life did you feel the richest, even if you weren't? So what was it? Why don't you start, Adrian? We'll alternate them. They're in a specific order this week. I've got it. Don't worry. It's in capital zone in front of you. I've got the memo. Christy says when she got her redundancy payment, the following week I used it to pay off what was left of my mortgage after years of struggling. Mortgage free day is such an important moment in many people's lives. that burden of that regular payment disappearing.

35:22I can understand why that makes you feel rich. Lydia. The 26th of September 2011, the day my first ever student loan payment dropped in my bank after working Saturday on holiday jobs to three to five quid per hour in my teens, suddenly seeing£2 ,800 in my account made me feel like a millionaire. But there's a bot there, isn't there? I tell you what, the bot is probably me reading it thinking. You know, we educate our youth into what we call debt when they go to university, but we still don't properly educate them about debt. You know, financial education is on the national curriculum, but less than 50 percent of schools teach it because they don't have to.

36:06I've met the head of the new curriculum review on that, and I'm hoping there will be a change on that next year. Universities do student loans, but don't take the custodial care. I would like to by properly explaining, well not all of them anyway, how student finance works. So here we are, plonking someone who's been earning£3 to£5 an hour, suddenly giving them£2 ,800, bang in one go, at the age of 18. And yet have we ever taught them how to manage it responsibly? Have we ever taught them when you're a student? Here we go Adrian, a question for you. When you're a working person, you shouldn't spend more than you...

36:38Earn. When you're a student, you shouldn't spend more than... When you've borrowed. Well, you see what I mean? Suddenly, you know, lots of parents, and they, oh, you've got to budget, got to budget, got to budget, but we don't tell them how to budget. So if you're asking me, I would say it should be any money that you've got from grants and loans, plus any money that you've got from working, plus any money that you've got from parents, but it should not include your 0 % overdraft that you get on your student bank account. You should not count it as buy now, pay later, or any other form of debt.

37:12and without that sort of education and demarcation of how to operate, they make mistakes. So that was the but. It was my but, not Lydia's but. Well, yes, and we don't want to come across as commogenally to Lydia, who liked the sight of that 2 ,800 living. And she's obviously well aware it is a loan, but we get it. What have you got? Luke, I think that's yours next. Stop, Luke, and listen. No, you have Luke, it's fine. OK. Second year working as a junior doctor. picked up the Asda Basics cheddar and then thought, nah, I'm on the cathedral city now. Steady on, steady on, Luke. That's it, you go for it.

37:49You'll be going for artisan cheeses before you know where you are. You might go for extra mature at some point, you never know. That's you, Adrian. Tom simply says, the day before buying a house, that's when he felt rich. That's an interesting one for me again, that one, you know, because that's what I call a swap of asset class. Yeah. And people that, I'm going to get personal and say something, when I sold my website, which I should state, I still run, I'm executive chair, I still go in, I still write and do all that stuff, but it was a long time ago now. People said to me, you know, oh, you've suddenly got all this money, what's it like to be rich?

38:28And in my case, I think it's probably fair to say, yes, rich is the right adjective. in my head I'd already been earning a decent whack and I had just de-risked and transferred a very valuable asset that I had which is the website into more liquid assets which was cash and shares it was a transfer of assets rather than the sudden manifest change in my financial status I'd owned it beforehand I'd own that valuable asset it's like when you sell a house suddenly you have cash, but before you had a house. It doesn't actually mean, but it's incredible the psychological difference that makes. I think probably my issue is I overthink it, so I was thinking, well, it doesn't actually make such a psychological difference, but I can see it does for many people.

39:11But also, you accrue, you know, you've taken on a huge debt, which I think is the point. I bet there was a very, very... Well, there is, there is. We don't know, but he's taken on a huge debt, but he's got an asset that's worth more than a huge debt, So his net assets are the same. Let's say he had£20 ,000 in savings. He's now got£20 ,000 invested inside a house. So he's cash poor. And so my point isn't that Tom shouldn't feel like that. Of course Tom should have felt rich like that. Of course he should have enjoyed that. But the point is that actually we need to holistically think about our finances.

39:47And it isn't cash in the bank. Cash in the bank is not the only thing that you have. We have assets too. Or hopefully if you're lucky. Okay. Do you want to do Ruth? Yeah, you do, Ruth. I'll do, Ruth. When I called the number on the letter to double-check, I'd read the PPI payout letter correctly. Thanks to you and your letter templates, I got more than£40 ,000 back,£21 ,000 and one large payment from Yorkshire Bank. I just got a loan for a van, so I paid it straight off and no debt since. And you do, Aoife. I love this stuff from Aoife. I love it. I'm so pleased to hear that, Ruth. I'm so pleased I managed to help.

40:19Aoife was in the choir when I was younger, was unaware that you got£2.50 per service you performed at. As a child who received no pocket money, when they presented my first pay packet after the first three months, I had never felt so rich. Beautiful. And subsequently spent it all on birthday gifts for my mama. Oh, that's so nice. That's so sweet. I can imagine her singing so sweetly and not knowing, not even knowing she was getting two and a half quid for her trouble. And let's do Adam as our last one. I'll do a few more in the pod. OK. My first pay as a 16-year-old in the early 2000s, just over a grand.

40:53I was able to buy myself a Sony Mini displayer and a Sony 32-inch flat screen CRT TV and still have£500 left over. Those were the days. They worked. Do you know what that makes me think? I'm sorry I'm being all serious on some of these when they're meant to be just joyous. Yeah. So at the moment in this country, auto-enrolment for pensions, and the earlier you save in your pension, the more time it has to compound and to grow, starts for people who earn over£10 ,000 once they're age 22. Now, a couple of years ago, the government actually passed a bill that said they could lower the age that auto enrolment starts, but it hasn't been done.

41:30And I sit there and think, if you've got an 18 year old, this was 16, but you've got an 18 year old in work, a bit like Adam, sitting at home with no cost because it's all being paid by their parents. That's one of the times in relative terms, they will have the most disposable income. So it would be a perfect time to auto-enrol them in a pension, which means that their employer is having to contribute to their pension as well as them. And it seems silly to me that if someone's earning over£10 ,000 grand and they're aged 18, that's almost the best time to have them contributing to a pension because they tend, and lots of people's lives are different at 18, but they tend to have a lot of disposable income.

42:07That's what Adam made me think of, but that's why I do money saving rather than just enjoying the joy of things. Play the theme tune.

42:21Yes, welcome to Money Mastermind. The score currently is Adrian has got 11 right and 21 wrong. If you've got 22 wrong, that would have been random chance. So he is fractionally ahead of random chance. Well done, my friend. Now, it is all about borrowing today, Adrian, the question. And regular listeners will know that you are the type of man who diligently thinks, I'm not going to buy a book on how to avoid debt. I'll borrow it. But then forgets to return it for two years and gets a huge fine. So no surprise, the only credit Adrian gets from me is for admitting his ignorance. We want to turn it around, though, Adrian.

42:57It's not the best setup today. I'm not that pleased. We want to turn it around, though, Adrian, with you surprising everyone and getting this week's mastermind right. So here is the question. Adrian, when you or anyone else applies for a personal loan, And what percentage usually of accepted applicants must get the advertised rate? A, all of them, B, 66 % or more, or C, 51 % or more. So when you see a personal loan advertised in a standard personal loan, what percentage of accepted applicants must get the rate that they're advertising? All of them, 66 % plus, 51 % plus.

43:39you'll tell me this isn't relevant but it strikes me that it ought to be is there not I mean the headline rate you're being offered might be one thing but if there's an asterisk next to it and it says stuff underneath doesn't that change things okay so I think that's a fair I'm going to have to help you here because I think that's a fair point and I don't like doing this but I will so what you see when you see a loan is it will say 9.2 % representative APR.

44:14There will be no asterisks. It will say representative APR. There might be small print at the bottom, but that's what it will say. So what percentage? And it was every accepted applicant. 66 % plus or 51 % plus. I think... I think it is only 50... I suspect it is only... It is 50, 50, if it's more than half, I've got to get it. But with these, I try and see, not to be cynical, see the world as it should be, not how it probably is. So I'm going to go for A. You're going to go for all of them? Everyone's accepted. If you applied for something where it says 9.6 % APR, you apply for it, you're accepted, you're entitled to expect to get that 9.6%.

45:05And so I'm going all of them. That's what the law should be, even if it isn't. Well, let's just do the uh-uh straight away. I don't care. This is how I wanted to. I like your rose-tinted financial spectacles. I gave you the clue in the word representative rate. Now, representative rate indicates it's not going to be the rate that everyone gets. representative rate says 51 % or more of accepted applicants must get the advertised rate. The rest can be charged more and they can be charged more without limit which is one of the great problems and the real issues with personal loan applications is you can apply for a loan at 10 % and then be accepted for a loan at 18%.

45:47You may not want the loan at 18 % and now you want to apply elsewhere. But the fact that you have applied for the loan at 10 % is now on your credit file. And each extra application is marginally negative. So that could make it slightly more difficult to get a cheaper loan. And even though they've accepted you for a loan at a far higher rate than the one that you applied for, the whole system is anti-shopping around. And what makes this worse is this rule only came into place on the 1st of February, 2011. Before 2011, 2007, the rule was you would have seen a 9.8 % typical APR. And a typical APR meant that 66 % or more people, that was option B, needed to get the advertised rate.

46:36But due to homogenisation with the EU, and I don't want to get into good or bad, but this was one of the rules that was bad for the country, we homogenised down, which I don't think legally we needed to. And there was a big discussion about that at the time, but I'm not going to re-litigate arguments I was having back in 2010, to 51%. Now, we're now out of the EU, and I would like to see one of those things for being out of the EU is we are now free to go back to typical rates, where two-thirds, and I have written to the FCA and the government on this one, where two-thirds of accepted customers should get the advertised rate, not 51%.

47:10But you need to be warned, unless you're on an eligibility checker which can give you guaranteed rates by doing a soft credit score on you. When you apply for a loan rate, the loan rate you're seeing, if it has the word representative, which pretty much all of them do, representative is the key word, then you are not guaranteed to get the advertised rate. There is no limit on the rate you can get. They tend not to go too high, to be honest, but there's no limit on the rate that you can get. And if you don't want that loan, having already applied for it, then it's already been slightly negative to you on your credit score, which just seems to me a very unfair system but I've been campaigning about it since before it was a typical rate and nothing has changed yet I'm afraid to say.

47:49OK, shall we do one last tell us? Go on. Before we go. I like this case. I got a 5k inheritance when I was 19. It was the most money I'd ever seen at that point and I lived like a queen for the whole summer. All the things I do with that 5k, now I'm an adult with real adult things to pay for. It's miserable being an adult. You probably wouldn't have anywhere near as much fun, would you? No, but you've got to buy a, I don't know, a trellis, some garden furniture, a sofa. It was stuff that subconsciously I thought the government supplied when I was a kid. I didn't realise you have to spend money on these kind of necessities.

48:23Buy yourself a Van de Graaff generator. That's my top tip. OK. That's random. It is random. I will explain why in the pod. OK. Take care. And by the magic of podcasting, we're now in the podcast, so I can explain to you what I was talking about and why I randomly mentioned the Van de Graaff generator. So it sort of follows the theme on when did you first feel rich? When I sold Money Saving Expert, what the newspapers kept asking me is, what have you splurged on? What have you splashed out on? And that's just not my nature. It's not the way I work. I don't do impulse buys. It wasn't something I was thinking about.

49:00But I got so fed up of being asked the question and not having an answer. I sat there and thought, what have I always sort of wanted, not really, never actually bought myself, but would be totally random and I'm interested in? And I bought myself two things off eBay. I bought myself a wind-up Van de Graaff generator. Yeah, that's the thing you did in physics class, which creates static electricity, and you put your hands on and it gives you a little electric shock and your hair goes up. Not that I have enough hair to do it with anymore. And I bought myself a theremin, which is the electronic musical instrument that the Star Trek theme is done on.

49:37And they both cost in total less than 100 quid, but they were the two things that I bought, so I had an interesting answer to the question, what did you splurge on? There we go. What do you reckon to that, podcast producer, Matt? I'm just wondering why you went for the... What's it? Theremin? Theremin. Theremin. Because I'd always heard about a theremin, and I didn't really know what it was, and I looked it up, and there was one on sale very cheaply, and I've never really been able to play it, but it is quite a cool... I mean, both those things are serious geekdom. Very. And I'm not embarrassed to live in a geekdom world.

50:13Well, I can just imagine you now with both of your hands going, trying to get that cool sound. Yeah, my Van de Graaff generator's static belt's not as good as it was. It can still make a spark, but you can't make your hair stand on end anymore. And it sits behind me in my office in MSC Towers these days. It's just there as a little bit of an oddity. It's quite a nice ornament, though. Yeah, they're pretty cool. Yeah. Right. We have loads more children's savings questions. I know you've got a pile for me, so why don't we get on with them? We did. Let's start with Sharon. She says, my son has a child trust fund.

50:43He turns 16 next year. What are the best options to talk with him about what to do with the money when he turns 18? Hopefully other than just spend it. Well, I'd actually argue there are things to talk to him about now rather than just when he gets to 18. So what is a child trust fund? And actually, there are many people who have these and don't know about that. I'll come on to that in a moment. If your child was born between the 1st of September 2002 to the 2nd of January 2011, they would automatically have had a child trust fund. Now, a child trust fund is just the tax-free predecessor to the junior ISA.

51:17I mean, it is these days in all but name a junior ISA. You can put up to£9 ,000 a year in it. It's tax-free. You can't access it until the child is 18. However, there is one big difference. With child trust funds, unlike junior ISAs, the state paid in 250 quid to start them off, 500 pounds for some in lower income families. So even if parents, grandparents and others didn't put anything in, every child of that age has some money in a child trust fund. And many have lost track of it, which we'll talk about in a moment. But let's get on with Sharon's question. So first of all, why am I saying you should talk about it now?

51:55Well, child trust funds are a dead product. You can't get a new child trust fund. And because of that, that means the market is not particularly competitive. The best child trust fund savings do not pay as much as the best junior ISAs. And financial advisors tell me the choice of investments within child trust funds is not as good as the choice of investments within junior investment ISAs. So if you have a child trust fund, for many people, there are some caveats in investment that you might have something specific that you want, but certainly in cash. You do not want it. You want it to be a junior ISA.

52:32And you can convert a child trust fund into a junior ISA. Same process as I mentioned before. You apply for the new junior ISA. And then within that, you fill out the transfer form and you put your child trust fund details and your child trust fund money would be moved into a junior ISA. So now you have a junior ISA and you can earn more interest. Or if you're doing it for investments, you get more investment choice. So I wouldn't wait until your son was 18. I would be looking now at trying to maximise it. But as for the what you do when you're 18, well, of course, there's a lot of choice. The thing to remember, when your child trust fund or junior ISA matures, it will automatically be converted at the age of 18 into an adult ISA equivalent.

53:17What do I mean by that? A junior cash ISA becomes a cash ISA, a junior investment ISA becomes an investment ISA. But it may well be in a pants cash ISA or a pants investment ISA because it's just going to move to the default. And at the very bare minimum you should be making an active choice to move it into the best product of its type. So if it's a cash ISA you want the best rate cash ISA. And again you have a right to transfer it exactly as I've talked about. You just apply to a new provider and ask it to transfer the cash ISA across. Equally, he might want to take some money out when he's 18.

53:54Equally, he might want to start saving into a lifetime ISA, which I've already mentioned earlier in the show, if he's going to be buying a property at some point under£450 ,000. Because within a lifetime ISA, for every pound you save, as long as you're using it to a qualifying first property, you get an extra 25p added, up to a maximum£1 ,000 a year. So, you know, if he has any debts, he should be using it to repay those but I suspect he doesn't. So they would be your main choices. It depends what this cash is there philosophically for. Is it there to buy something specific? Did you save it to help him towards his university costs if he's going to go to university?

54:30Is it there towards a property? I don't know and you may not know but I think they would be the sphere of conversation that I would be having is which of those things is the best to do. Hopefully that covers it. Oh, oh, oh, Oh, yes. I said about lost child trust funds and I should talk about that for a second, not for this particular case. So, official stats show over 700 ,000 young people may have a child trust fund and either aren't aware of it or don't know where it is. The average balance is£2 ,200, though that will vary hugely with age, whether it was an investment, whether any money was added.

55:11If you don't know your child trust fund provider, then there's a free tool via gov.uk to help you find it. It's totally free. Do not pay anyone. Some people advertise to try and track these down. You don't need to do it. Just go to gov.uk. If for an under 18, the parent can do it. For someone 16 or over, the child can do it. You will need your national insurance. So, yes, that does mean if they're between 16 and 18, it's a choice of whether the child does it for themselves or the parent does it for them. You should get a response from HMRC within three weeks telling you which provider has your cash and you can then contact that provider.

55:46Obviously, if you know your provider already, you contact it directly. I'm just going to read you a little success story on this because so many people have lost touch with the money that they've got. Delightfully, Kirsty emailed me to say, As an adoptive family, we didn't know anything about child trust funds until I read your info on it. I followed the advice. I was informed where the funds were originally set up. And we found both funds were valued at about£1 ,000 each. Thank you so much for raising our awareness. I think that's a rather nice way to move on to the next question, Matt. I agree.

56:20Martin, you're talking about savings. What should you get if your kids want to spend money on a debit card? Yeah, it is interesting because we have focused mainly on the savings, but there are children's bank accounts as well, which are worth looking at. and there are also special children's spending cards, prepayment cards. So let's just run through those and it is a choice in many ways between the two. So children's bank accounts, in those they have money in, they can spend on a debit card just like some adults accounts. The pros of that is there are no fees as long as you pick the right one, you may get some interest on money kept in there and all your money in there is fully protected.

56:59The cons is unlike the prepaid cards that I'm going to come on to in a moment, they don't have parental controls and parental monitoring services. And they're also often only available for over 11s. So my top picks would probably be the Santander 123 account, which via some routes at the moment can give you a£15 sign-up bonus and up to 3 % interest. The 3 % interest is only if you've got between£1 ,500 and£2 ,000 in it. Don't put over£2 ,000 in it because you don't get any interest on amounts over£2 ,000. The competitor is the Nationwide Flex One that pays 2 % interest on up to£1 ,000 and has a link savings account paying 5 % and up to£5 ,000.

57:37Both of those will give you a debit card. There are others out there. Those are my two top picks at the moment. But they do tend to have age restrictions on who can get it as generally over 11s. The alternative are prepaid cards where you load money onto the card that you want to spend. Loads of spending controls for parents here and are available for younger children, but there's no interest. Some of them are expensive and the protection on your money is lesser e-savings protection, so don't keep too much money in there. So my top pick is probably the Hyperjar card for age 6 to 17, although you can't withdraw money from a cash machine on this.

58:15It's only for spending on the card. The only real cost is a£5 fee to have the card delivered. After that, it's free unless you start using it in unusual ways, such as you do over 11 top-ups in a month or you're withdrawing to other bank accounts frequently. It's generally free. Better are the Starling Kite, the NatWest Rooster and Revolut. But those are only if the parent has an account with those banks anyway. Or Revolut is a financial service provider. So they are slightly cheaper than Hyperjar, but you need to be a customer already. I mean, I should note with Hyperjar, to get it, the adult has to sign up for a free virtual card.

58:55But that's just a nothing thing rather than actually getting a main account. The best known one out there, the best known of these prepaid cards is the GoHemry card for ages 6 to 18. It's got a£4 monthly fee, though, though it does have extra financial education tools compared to some of the others. Although the others are pretty good. Personally, I'd probably go for the free one. I say I probably would. I have. I've gone for a free card in the one that I use with my daughter. But it is a choice of what you tend to use. and all of those in our modern digital age. You know, giving kids pocket money these days, if they're going to be buying stuff online, it doesn't really help them.

59:27So the prepaid card gives you the controls and the bank accounts are free. Thank you very much. That answers my question. Right. Have you got any more? I do. I've got one from Alan. He is asking, can you discuss? Discuss? Discuss. He is asking, can you... Yes. This is Sean Connery here on the Martin Lewis podcast. we can discuss but what do you want us to discuss? Pension options. He wants to discuss Matt, you are you are the producer no, Matt, you're the producer of this podcast you are not allowed to edit this out this has to stay in, okay? I can't guarantee that this is going to stay in because this is embarrassing I can't say the word pension You have to keep it in I want you to discuss there is no discussion you're keeping it in let's go and give me your question Alan, can you discuss pension options for children also?

1:00:22Tax relief amounts that can be invested providers. I certainly can. I mean, for those of people who are lucky enough to have spare cash that you've, you know, you've got children's savings, you've matched out your kids' junior ISAs, then starting a pension for your child is worth considering. It also, I think, makes a great gift from grandparents. So a newborn now may remember how you help them in over half a century's time when they're retiring. Now, you might be thinking, well, hold on, isn't pensions all about tax relief? Yes, it is. It's all about tax relief. But pension rules allow even those who don't earn anything of any age to get the equivalent of 20 % tax relief.

1:01:00In other words, for every£80 saved in a child's pension, the pension firm automatically tops it up for the state with what's called relief at source. So your child's pension will have£100 in it for every£80 you saved. The maximum you can put away if your child doesn't earn anything, which almost none of them will earn over the big threshold that they would need, is£2 ,880 a year, meaning they get£3 ,600 in their pension. That money will be locked away until they're aged at least 57 based on current rules. But my suspicion is once children now are retiring, it will probably be even older than age 57.

1:01:40But just as I talked about compound interest on investments earlier, the same is true of a pension. The longer you have money in there, the more time it has for it to grow, the more time it has for it to compound, the more powerful it is. So putting money in a pension early, again, in my priorities order, look after your family finances first, then to start to put some directly usable savings away for your kids in Children's Savings Accounts or Junior ISA. and this is the luxury one if you can on the end. You know, this is not the must do. This is the luxury one. Then I think putting some money in pension savings for your kids is a really decent option.

1:02:15Simplest route is a stakeholder pension. So Aviva Standard Life offers stakeholder pensions out there. Or if you want to be more sophisticated, go and look in some of the self-invested personal pension options with some of the providers I mentioned earlier when I was talking investments. But yeah, putting money away for your kid's pension, not a bad thing to do. Martin, lots of people are asking about premium bonds for kids. Is that a good idea? Yeah, look, it's incredibly common. Many people, often grandparents, gift premium bonds to children. In my view, being blunt, I think they would have been better sticking with normal savings.

1:02:48So quick premise, premium bonds are government-backed savings where the interest is based on a prize draw. The current prize fund rate is 3.6%. Yet, that overestimates what someone with typical luck would get, because for everyone who wins a big prize, lots of people have to win less. So actually, most people with typical luck will win less than 3.6%, and the top savings rates we're hearing for kids are up in the 5 %-ish rate. Now when I'm talking about premium bonds for adults, I normally say premium bonds are best if you fulfil the following two things. First, that you have larger savings, say over£5 ,000, because then you have a better chance of winning closer to the published prize fund rate, 3.6%.

1:03:33If you have less than that, the odds are you will win little or nothing. And second, they're best for those who pay tax on their savings interest because they've used up their ISA allowances or personal savings allowance. And in that way, because premium bond winnings are always tax-free, they're useful. So now we look at that for kids. Well, most children don't pay tax on savings and most children only have small amount in premium bonds, in which case premium bonds will, with typical luck, be pants. Now, yes, there's the ludicrously small chance that you might win the million, but, I mean, really you're talking about similar levels to tossing a coin and landing on its edge.

1:04:14I mean, that's the sort of scale we're talking about. So if you are thinking of putting money in premium bonds for children and say it's£1 ,000 or less. I think the stark fact that's worth knowing is if you put£1 ,000 or less into premium bonds over a year with typical luck, you will win nothing. Technical note, for those of you wondering what typical luck means, I define it as what the person with the median average winnings for that amount of money would be as dictated by, well, there's no way to say this without mentioning it, the premium bond probability calculator that I had built years ago.

1:04:51So typical luck is defined as the median average. In other words, you line everybody up with that amount of premium bonds and it's the amount that the person in the middle would win. Seems quite a good way to finish this segment. Thank you for all of your questions on children's savings. Hopefully we've given you big answers to those ickle saving problems.

1:05:13That's it for this week. If you've enjoyed it, please tell your friends you've been listening. to the Martin Lewis podcast. And why not subscribe? We tend to put out a new pod every Thursday and then there's a new Question Time pod coming out on a Monday too. Your pockets may well be pleased with you. If you've not enjoyed it... 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.

1:06:00The 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.

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