Child’s savings best option
Discussion
Would like to set something up for regular and one off payments to be made into some product/s for our 6 month old.
Looking at Childrens ISAs however the small print says they have the same tax allowance as adults and cannot withdraw until 18?
Would the better option to be open an adult product in our names for him that can be accessed should it need to be?
Stocks are looking wobbly at the moment but a regular small amount each month into a vanguard product or the like or child premium bonds if such thing exists?
Just wondered what people tend to go for - I just opened another 0.7% savings account solely for his money currently.
Cheers!
Looking at Childrens ISAs however the small print says they have the same tax allowance as adults and cannot withdraw until 18?
Would the better option to be open an adult product in our names for him that can be accessed should it need to be?
Stocks are looking wobbly at the moment but a regular small amount each month into a vanguard product or the like or child premium bonds if such thing exists?
Just wondered what people tend to go for - I just opened another 0.7% savings account solely for his money currently.
Cheers!
Given the timescales (best part of 18 years) a Junior Stocks and Shares ISA is a no brainer.
Vanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
Vanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
duckson said:
Given the timescales (best part of 18 years) a Junior Stocks and Shares ISA is a no brainer.
Vanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
Premium bonds cannot go wrong really top them up to £50k by the time they are 18yoVanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
Welshbeef said:
Premium bonds cannot go wrong really top them up to £50k by the time they are 18yo
Very poor rate or return, far from a ‘real’ return when inflation factored.For kids, given time frame and a natural ‘pound cost’ averaging in strategy, all of market world ETF is easiest.
I work in the industry, it’s the easiest solution, which requires the least amount of monitoring / input.
I also leverage (between 2x to 10x) to amplify returns, particularly for the kids investments, but that requires more experience, so not recommended for most.
duckson said:
Given the timescales (best part of 18 years) a Junior Stocks and Shares ISA is a no brainer.
Vanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
This. I have opened a JISA for our 4 month old with Fidelity and opted for a HSBC All World fund. Vanguard is also a good option, either is fine (I use both Fidelity and Vanguard as they are relatively cheap and simple to use platforms).Vanguard are decent and something like the FTSE Global All Cap (accumulation) should serve you well.
I've moved my 2 youngest Junior Cash ISA's to the above and they are 14 & 15 but this is first house money so will be invested for another ~10 years probably.
NowWatchThisDrive said:
Junior ISAs can be a double-edged sword with features that you need to understand and be comfortable with before opening.
The child can start managing the money themselves from 16. From 18 they're completely free to withdraw it all and do whatever they like with it. Obviously we'd all like to think we bring them up well enough to not go and throw it all down the drain on their 18th birthday, but legally there's nothing you can do to stop them.
For better or worse, the money really is locked away. The only circumstances under which it can be withdrawn before 18 are, I think, if they die or become terminally ill. So you could be on the bones of your arse and you still wouldn't be able to touch a penny of it.
You may be fully aware of all this already but it's worth thinking about.
You obviously do not have to tell them about this pot of gold that you’ve been paying into and instead hold it back until mid twenties or later or when your comfortable they are not going to buy hookers and coke The child can start managing the money themselves from 16. From 18 they're completely free to withdraw it all and do whatever they like with it. Obviously we'd all like to think we bring them up well enough to not go and throw it all down the drain on their 18th birthday, but legally there's nothing you can do to stop them.
For better or worse, the money really is locked away. The only circumstances under which it can be withdrawn before 18 are, I think, if they die or become terminally ill. So you could be on the bones of your arse and you still wouldn't be able to touch a penny of it.
You may be fully aware of all this already but it's worth thinking about.
Welshbeef said:
You obviously do not have to tell them about this pot of gold that you’ve been paying into and instead hold it back until mid twenties or later or when your comfortable they are not going to buy hookers and coke
I expect the provider gets in touch with the child themselves by the time they're 18 as part of it rolling over into a regular ISA in their name. Even if you could keep them totally in the dark, once they're 18 you won't be able to manage it or make any further contributions. You can tell them about it gradually as part of the wider investment education you give them, which is what I'm doing, but ultimately you can't remove the risk entirely. That's what a trust or family investment company is for.NowWatchThisDrive said:
I expect the provider gets in touch with the child themselves by the time they're 18 as part of it rolling over into a regular ISA in their name. Even if you could keep them totally in the dark, once they're 18 you won't be able to manage it or make any further contributions. You can tell them about it gradually as part of the wider investment education you give them, which is what I'm doing, but ultimately you can't remove the risk entirely. That's what a trust or family investment company is for.
Stick a post divert on all post in your kids name and have it re-touted to somewhere else 
I went for a Stocks and Shares Junior ISA when my son was a few months old, he's coming up for 2 in May.
Initially I drip fed a few K to get him up and running. I now top up £25 each month which i hope to increase as time goes on, any reasonable cash gifts he gets i put half in here and half on anything he needs/wants now.
Its nice to watch it grow slowly.
The JISA is with Money Farm who have a decent app to help control things. I can deposit what i want when i want and adjust contributions easily.
When he is 18 i will encourage him to carry on topping up or spend it on a car/house whatever his situation may be at the time.
Initially I drip fed a few K to get him up and running. I now top up £25 each month which i hope to increase as time goes on, any reasonable cash gifts he gets i put half in here and half on anything he needs/wants now.
Its nice to watch it grow slowly.
The JISA is with Money Farm who have a decent app to help control things. I can deposit what i want when i want and adjust contributions easily.
When he is 18 i will encourage him to carry on topping up or spend it on a car/house whatever his situation may be at the time.
I too have invested for the kids since birth, current ages 10 & 6.
They both have significant 5 figure sums invested. Yes the markets have been kind for the past decade, and I’ve leveraged up from time to time, to enhance returns.
One thing I have not done is told either of them that these investments exist. I want to avoid any conflict/nagging scenarios when/as they get older.
Pots should be well into 6 figures by 18-21 when I may allow them access (I live in a tax friendly jurisdiction, so JISA / ISA irrelevant).
Property is the obvious donation, but I’m open to travel etc as well.
They both have significant 5 figure sums invested. Yes the markets have been kind for the past decade, and I’ve leveraged up from time to time, to enhance returns.
One thing I have not done is told either of them that these investments exist. I want to avoid any conflict/nagging scenarios when/as they get older.
Pots should be well into 6 figures by 18-21 when I may allow them access (I live in a tax friendly jurisdiction, so JISA / ISA irrelevant).
Property is the obvious donation, but I’m open to travel etc as well.
Badda said:
Have some faith in your parenting skills. If you doubt them and suspect your kids with blow the lot, invest in some wine for yourself instead!
Not an entirely daft idea. https://www.ft.com/content/49d6e761-a016-4a83-a041...
… but be careful as wine investment scans have been a thing for years.
I've out some of my sons savings into a shares ISA in my name, that way I have full control. He doesn't even know he has any savings, but since his birth I've been paying £30/month into a Halifax saver account. Interest rates are now poor on that but whenever it builds up to a few £hundreds I move it into the ISA.
Welshbeef said:
anonymous said:
[redacted]
The £3k a year isn’t anything to do with the “gifting” the 7 years is tapered first 3 years and the gifter dies then it’s no discount but years 4-7 it drops from the 40% to 0%. https://www.gov.uk/inheritance-tax/gifts
For most people it isn’t really a concern given they don’t tend to die while their kids are still young enough to need money. And if you do then it was pretty unexpected and impossible to plan for given the vast majority of kids are self sufficient by the time parents are mid to late 50’s.
My son will be 18 just before I turn 50 (assmuming I do) And he’s out the door. The isa I started for me but then decided to give to him is about 2.5k currently from one of those Facebook savings things invested mostly in Tech a couple of years back with small amounts being swiped here and there. £800 of that is uplift.
But I think I’m going stick it in a JISA in Vanguard.
My son will be 18 just before I turn 50 (assmuming I do) And he’s out the door. The isa I started for me but then decided to give to him is about 2.5k currently from one of those Facebook savings things invested mostly in Tech a couple of years back with small amounts being swiped here and there. £800 of that is uplift.
But I think I’m going stick it in a JISA in Vanguard.
Welshbeef said:
The £3k a year isn’t anything to do with the “gifting” the 7 years is tapered first 3 years and the gifter dies then it’s no discount but years 4-7 it drops from the 40% to 0%.
Err, not for nearly all 'real world' gifts it's not...Taper relief is only on anything over the nil rate band. Gifts within the NRB fall fully back into your estate until the full 7yrs have elapsed. Common misconception and why Joe advising Joe is risky.
What's more relevant if you are able to make larger gifts is doing so out of surplus income as that's exempt immediately. In practice, most gifting for children you're not going to be worried about 7yrs.
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