State Savings Childcare Plus: doing the maths on withdrawing it all

dingbat

Hi. We have been a position where we have put the monthly children's allowance into a State Savings Childcare Plus account for the last 4 years. Didn't think too much about it at the time; it was really just a way of locking it away for their future and it would all be automatic via direct debit etc.

In the last 6 months we have needed to take out a sizeable car loan and now, looking across our finances, it doesn't make a huge amount of sense to keep family funds locked into that scheme earning very little interest when we could use them to take a large chunk off our car loan which was taken out at a far greater interest rate.

Is there anything else I should be considering here? Not asking for financial advice; this is just a very general query.

Many thanks.

Jim2007

The thing about savings is that there is always a good reason to stop and access it. And your reasons for doing so are typical and on a purely financial basis are probably right, but the question is what will you do to replace them and do you have the discipline to actually carry it out or will you have the next good reason not to do it.

If you absolutely need to achieve a savings objective, then it won't the return that will be the issue but the discipline to achieve it that will be the determining factor and putting it out of reach will make the difference.

I'd say you need to sit down and do some general financial planning, make sure you have a rainy day fund and determine if you do need build up a fund for the kids or not before you move on. For instance replacing a car should not be a surprise, so you should have been putting money aside for it in any case, so perhaps that is more appropriate savings objective to have than just dumping money in to state savings. Only you can decide these things.

dingbat

Wow I really was looking for a non-patronising reply.

Thanks for taking the time. End of thread.