Your son can save 3000 in an Cash ISA each year, which would be tax free. (This works out at 250 per month from April each year). I'd pay the maximum into this first and then save into another account after this.

Don't forget you will have to deduct tax from any interest on other accounts.

A savings account comparison on this site should indicate who is providing the best rates at the moment.

You can also look at current accounts, but as he is 16 I don't think these will be available.

I'm not sure if a pension is the best savings / investment idea at the moment, but if he did go down this route, he would have any contribution from himself topped back up with his tax. So he would be able to add the income tax back onto his contributions.

He would need a financial advisor to help sort this out, and provide some advice.

Another option is a long term (10 year) savings fund for the remaining money each month, where he could save 15, 20 or 25 per month for 10 years tax free. The return on this isn't great as like pensions these are managed investments which have administration fees.

HTH

Sparky.

My 16 year old son has just started an apprenticeship and is earning approx £8k per annum. He is pretty astute with money and wants to pay £5 per week into a stakeholder pension and save as much as possible towards buying a car next year. He wants to save at least £75 per week and has £800 now to invest. Can someone advise best options, ie cash isa vs high rate regular saver accounts or a combination of both? Any guidance on best stakeholder pension options would be great too given that he is never likely to be in the situation of having a company pension. The more I look at this with him, the more unsure we become. Thanks