Saving for child. ISA vs JISA

[Benbay001]

A friend of mine is looking to put away a small ammount per month for his new born son, for the son to access when he grows up.

He was initially going to save into a cash JISA (3% PA) but i suggested that over 18 years with regular investment he will do significantly better with investments than with interest in a bank.

I then suggested if he was going down the JISA S&S route he ought to also consider investing the money using his own "adult" ISA allowance which he doesnt get close to utilising. My arguement would be that returns would be identical, yet he would have full control over the funds should the child turn feral or he needed the money at some point between now and then.

Does anyone have a view on any of the above?

Thanks

[AdamC28]

With a little one on the way myself and looking to do the same, I will be following this with interest.

[BoRED S2upid]

We have gone down this route wife and I have our S&S isa with HL then separate ones for both kids using the same funds as us so we all sink or swim together. Average returns are 14% a year which taking into account the battering this year I’m very happy with, over 18 years it should accumulate into a nice lump sum.

As for them turning feral and wasting it all on their 18th that’s my job as a parent to encourage them not to.

If using your own ISA allowance how would you keep track of what is yours and what is the kids? That could get very complicated.

[caiss4]

anonymous said:

[redacted]

Did the same for mine. The actual seed funding came from my parents (around £2k per child) but it sat in my investments over the years. One daughter cashed out some years ago and used the proceeds to pay for her masters degree (I'll pay her back one day!). The other two are now feeding LISA's from the funds up to the annual limit so now have £10k in a LISA and probably a reasonable final sum to transfer next FY so could attain >£15K by 2021. I reckon both might be thinking of house buying next year too!

[Benbay001]

Thanks for the replies.

Ive forwarded a link to my mate.

[R33FAL]

Surely you only tell them about it if you can see they are not turning into a bad egg. If they are... well, at least in can stay in the ISA until they sort their sh*t out!

[Cheib]

You can do a SiPP for a child,.,,.attracts basic rate tax relief up top £3k, The obvious issue is that they can’t access it until retirement, the flip side is whilst everyone else will have to start contributing to their pensions (state pension will be effectively worthless in 60 years) they will have a great head start.