Jayne Dowle: Saving grace of parents who provide for future

I wish you luck. But I’m such a control freak about cash, it gives me physical pain to shove more than a pound’s-worth of 2ps in a seaside slot machine. My “attitude to risk” as Carl, my long-suffering financial advisor, calls it is probably roughly equitable to that of a geriatric tortoise.

I’m bad enough about my own incomings and outgoings. So you can imagine what I’m like about the children’s money. And you can imagine what my reaction was when I found out that Lizzie’s Child Trust Fund stakeholder account had actually lost money in the last 12 months – to the tune of £40 – instead of making any.

I’m obsessive. I check everything. But not every parent does, and their kids could be making a loss without even realising it. I know you always have to look at investment over the long term – thanks Carl, for reminding me of this on a regular basis – but I am sure that none of us would accept this kind of loss in our own accounts.

So why should I accept it on behalf of my six-year-old daughter?

I was straight on the phone to the provider. Considering I was about to pull almost two grand out of her company’s scheme, the woman on the other end sounded terrifingly non-plussed as she muttered something about “recent Stock Market performance”.

I put on my best Dowager Countess of Grantham voice and informed her that as a journalist, I was well aware of recent stock market events and told her, politely, to stuff her Fund. Lizzie’s university/round-the-world-trip/first car stash is now safely tucked away in the Yorkshire building society, in a straightforward children’s account at three per cent. And it’s staying there until she reaches 18. Unless they let the interest rate disintegrate, as building societies tend to do, in which case we’ll be on the move again.

But I digress. I could have waited a few weeks and dropped it in one of the new Junior Isas the Government launches this week. But I am so cynical about anything which promises the earth and delivers a £40 net loss, I’m keeping the personal finance well away from the politically-motivated policy shift.

To be fair, the CTF was already under serious threat from Gordon Brown, so it was only a matter of time. But how can the Government expect to gain any admiration from ordinary families when it takes away that grant of up to £250 per child and replaces cold hard cash with the option of a load of confusing information and forms to fill in?

When it scrapped the CTF, introduced by New Labour in 2002 to give every child a sum of money to start in life, it was clear that the Government had to come up with an alternative.

That’s all this is. It won’t make our kids into millionaires. And how long will it last before there is another change of government, the next big idea comes along, and like the CTFs, Junior Isas fall by the wayside?

Already, these new funds, flagged as offering tax-free savings of up to £3,600 per year, per child either in cash or stocks and shares (er, like since when did children pay tax anyway?) appear unpopular. None of the “big six” banks, including Barclays, HSBC and Lloyds TSB, appear to have a Junior Isa ready to roll.

You can understand the inertia. The banks’ current attitude to risk might be a bit more daring than mine, but not much. And really, what’s the point? I can’t see much difference between the cash Isa and the standard children’s savings account I found for Lizzie.

It will be the affluent parents who know their independent equity funds – and the grandparents in a position to undertake some serious investing – who will benefit most.

I’m not in that position at all. I have religiously put away £25 a month for Lizzie and her brother since they were born. It’s not much, but there have been months – make that years – when even this has been a struggle.

I will persevere, because when I fail as a parent in other ways, I can still do this for them. Promoting a “savings culture” is all very worthy, but I suspect that for most parents, even thinking about setting up new accounts for the kids is about number 127 on the list of financial priorities.

And you have to question the logic of launching these Junior Isas just weeks before Christmas, when the lure of a store-card to pay for the presents is stronger than the pull of an investment that won’t pay dividends for a decade or so.

Don’t listen to a control-freak old tortoise like me though. Invest away in one if you like. But something tells me you might be better off with a nice old-fashioned building society book. Or a crafty bet on the two o’clock.