Children's savings - JISA?
Discussion
It's never been a big consideration as we tend to spend what we earn, but I have a 4 and 7 year old who have just inherited £2k each, and I'd like it to work for them.
The 4 year old has a Junior ISA, and the 7 year old, a Child Trust Fund. Neither have got much money in unfortunately but we have recently started to feed them with a very small figure every month. Both products are supplied by OneFamily (Engage Mutual).
The wife just wants the inheritance paid into a bank account, but it's a no brainer to me that some form of investment would make more sense as it won't be accessed for some years.
What are people's thoughts on the best place to put this money for long-term (low involvement) growth? And what are people's views of using JISA's for both (assuming the investment should go via this method)?
The 4 year old has a Junior ISA, and the 7 year old, a Child Trust Fund. Neither have got much money in unfortunately but we have recently started to feed them with a very small figure every month. Both products are supplied by OneFamily (Engage Mutual).
The wife just wants the inheritance paid into a bank account, but it's a no brainer to me that some form of investment would make more sense as it won't be accessed for some years.
What are people's thoughts on the best place to put this money for long-term (low involvement) growth? And what are people's views of using JISA's for both (assuming the investment should go via this method)?
My biggest problem with these Gov schemes is that the kid turns 18 and suddenly gets access to £x thousands.
Now, you hope your raised a good responsible member of society but it's a big temptation. I'd rather have something I can control, it's still their money but we can have a sensible discussion about it.
Now, you hope your raised a good responsible member of society but it's a big temptation. I'd rather have something I can control, it's still their money but we can have a sensible discussion about it.
Although it locks the money away until much later in life, pension is well worth considering. The massive advantage a 5-year old has in this regard is the opportunity for a full 50 years of cumulated tax-free returns.
If you put £2k cash into a pension plan for a child the government ADDS basic rate income tax of 20% so the total amount that gets invested is £2,500, which is a good start!
A reasonably diversified portfolio of stocks might expect to 7% per year on average. After 50 years this means the £2,500 would grow to £70,000. (Even at 5% it would grow to £30,000) Not bad when you've started from a £2k initial investment.
If you put £2k cash into a pension plan for a child the government ADDS basic rate income tax of 20% so the total amount that gets invested is £2,500, which is a good start!
A reasonably diversified portfolio of stocks might expect to 7% per year on average. After 50 years this means the £2,500 would grow to £70,000. (Even at 5% it would grow to £30,000) Not bad when you've started from a £2k initial investment.
Ozzie Osmond said:
Although it locks the money away until much later in life, pension is well worth considering. The massive advantage a 5-year old has in this regard is the opportunity for a full 50 years of cumulated tax-free returns.
If you put £2k cash into a pension plan for a child the government ADDS basic rate income tax of 20% so the total amount that gets invested is £2,500, which is a good start!
A reasonably diversified portfolio of stocks might expect to 7% per year on average. After 50 years this means the £2,500 would grow to £70,000. (Even at 5% it would grow to £30,000) Not bad when you've started from a £2k initial investment.
I think you can put as much as £2800 in. And with Junior ISAs it's just over £4. If you put £2k cash into a pension plan for a child the government ADDS basic rate income tax of 20% so the total amount that gets invested is £2,500, which is a good start!
A reasonably diversified portfolio of stocks might expect to 7% per year on average. After 50 years this means the £2,500 would grow to £70,000. (Even at 5% it would grow to £30,000) Not bad when you've started from a £2k initial investment.
That's a pretty good start in life.
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