Investment for young child
Discussion
It's my nieces first birthday this week and though rather than buy her something she wont need, or even be aware of at that age, that i would like to invest some money that might have value when she's older. I was thinking about £500 initially with a similar amount each year for future birthdays, etc. After the initial deposit it could be regular monthly payments or lump sums a couple of times a year, whichever gave the best returns. I was thinking of something she could perhaps use for a house deposit when she gets to her early 20's?
Would I be better off just buying premium bonds for her or is there a better longish term option?
Would I be better off just buying premium bonds for her or is there a better longish term option?
BenjiS said:
Start a pension for her.
That she can use for a house deposit in her 20's? So how does that work with a pension? OP it's been done to death child ISA, NSandI do a 2% fixed rate bond you can get child bank accounts that offer more then there is premium bonds but she may never win on such small amounts.
BoRED S2upid said:
BenjiS said:
Start a pension for her.
That she can use for a house deposit in her 20's? So how does that work with a pension? OP it's been done to death child ISA, NSandI do a 2% fixed rate bond you can get child bank accounts that offer more then there is premium bonds but she may never win on such small amounts.
Croutons said:
£500/ year, 20 years. Where's she buying a house, the wilds of Slovakia?
And before you even do start something, I'd talk to the parents to see what they have in place, to make sure you're not going to unnecessarily double up on what they have, given the stupid rules on interest.
£500 per year for 20-years should give around £20k, which is a decent chunk towards a deposit.And before you even do start something, I'd talk to the parents to see what they have in place, to make sure you're not going to unnecessarily double up on what they have, given the stupid rules on interest.
I know this question has cropped up before in similar threads but the financial world is fluid and new products come to the market all the time.
I had thought about a pension but thought that might be a too long term for her to appreciate as it's going to be 60+ years before she sees the benefit by which time I'll likely to have been dead for 40 years! Plus it's more her parents responsibilty to sort things that long term.
I've looked at child isa's but the returns seem pretty low.
I understand that it's not a huge amount in terms of investment but felt it would be better value for her than spending £500 on toys or other stuff she wont need.
I had thought about a pension but thought that might be a too long term for her to appreciate as it's going to be 60+ years before she sees the benefit by which time I'll likely to have been dead for 40 years! Plus it's more her parents responsibilty to sort things that long term.
I've looked at child isa's but the returns seem pretty low.
I understand that it's not a huge amount in terms of investment but felt it would be better value for her than spending £500 on toys or other stuff she wont need.
4Q said:
I know this question has cropped up before in similar threads but the financial world is fluid and new products come to the market all the time.
I had thought about a pension but thought that might be a too long term for her to appreciate as it's going to be 60+ years before she sees the benefit by which time I'll likely to have been dead for 40 years! Plus it's more her parents responsibilty to sort things that long term.
I've looked at child isa's but the returns seem pretty low.
I understand that it's not a huge amount in terms of investment but felt it would be better value for her than spending £500 on toys or other stuff she wont need.
An ISA is just a wrapper. The returns are linked to the underlying investments.I had thought about a pension but thought that might be a too long term for her to appreciate as it's going to be 60+ years before she sees the benefit by which time I'll likely to have been dead for 40 years! Plus it's more her parents responsibilty to sort things that long term.
I've looked at child isa's but the returns seem pretty low.
I understand that it's not a huge amount in terms of investment but felt it would be better value for her than spending £500 on toys or other stuff she wont need.
I did this for both my nieces , but I didn't use any of the tax wrappers as this limits when you can release the money.
I used the F&C Childrens Investment plan : http://www.fandc.com/uk/private-investors/savings-...
and was happy with the returns and the flexibility. I released half at 18 and half at 21, but you can decide when you want to release the money.
I used F&C as they have been around for 150 years , so not likely to disappear in the 18 years you are investing, and I used two fund, the general fund started in 1868 and another fund, just to give some diversity.
F&C have loads of docs on this on there website.
I used the F&C Childrens Investment plan : http://www.fandc.com/uk/private-investors/savings-...
and was happy with the returns and the flexibility. I released half at 18 and half at 21, but you can decide when you want to release the money.
I used F&C as they have been around for 150 years , so not likely to disappear in the 18 years you are investing, and I used two fund, the general fund started in 1868 and another fund, just to give some diversity.
F&C have loads of docs on this on there website.
Croutons said:
sidicks said:
£500 per year for 20-years should give around £20k, which is a decent chunk towards a deposit.
You're assuming a 100% gain over 20 years, which may be possible but is not guaranteed, and what will house prices be then? I'm not setting out with any particular goal amount, I just thought it might be a nice long term gift as we would be spending that much on a birthday present anyway. Plus there's Christmas, and I expect the amount we would spend to grow over time in line with inflation. If we only save £500 pa it will grow to around £20k by the time she's 25 at 3% pa - which will be worth the equivalent of around £14k assuming 2.5% inflation, so a not insignificant amount for a youngster starting out in life.
https://www.fidelity.co.uk/investor/isa/junior-isa...
You can pick funds or let Fidelity manage it. Grandparents can contribute, they'll want to get out of IHT
Big, safe, easy. All your info is on second half of that page. And when I say safe, I do mean less safe than cash, but cash erodes.
I have quite a few Fidelity products
plover said:
I did this for both my nieces , but I didn't use any of the tax wrappers as this limits when you can release the money.
I used the F&C Childrens Investment plan : http://www.fandc.com/uk/private-investors/savings-...
and was happy with the returns and the flexibility. I released half at 18 and half at 21, but you can decide when you want to release the money.
I used F&C as they have been around for 150 years , so not likely to disappear in the 18 years you are investing, and I used two fund, the general fund started in 1868 and another fund, just to give some diversity.
F&C have loads of docs on this on there website.
I have done exactly the same for my children, for very similar reasons - (basically set and forget, which isnt the approach I take with my other investments), via a child trust fund / junior ISA (depending on the age of the child in question). The £100 a month for approx the last ten years is now over £20k, which I am very happy with. The clear advantage of the childrens investment plan is you control the release, which isnt true with the junior ISA but I dont think the CIP works from a tax perspective for a parent (others on here will know).I used the F&C Childrens Investment plan : http://www.fandc.com/uk/private-investors/savings-...
and was happy with the returns and the flexibility. I released half at 18 and half at 21, but you can decide when you want to release the money.
I used F&C as they have been around for 150 years , so not likely to disappear in the 18 years you are investing, and I used two fund, the general fund started in 1868 and another fund, just to give some diversity.
F&C have loads of docs on this on there website.
Sorry to bump a slightly old thread but thought this fitted in here.
Are there any restrictions for the savings methods in this thread, that would exclude me from opening one for a child who isn't a blood relative?
In this situation for my brother in laws daughter (my Niece by marriage I guess?)
Ideally without one or either of the parents knowledge?
Are there any restrictions for the savings methods in this thread, that would exclude me from opening one for a child who isn't a blood relative?
In this situation for my brother in laws daughter (my Niece by marriage I guess?)
Ideally without one or either of the parents knowledge?
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