Discussion
Back in the day, you would have a post office account and a little red book. Mum would walk you up to the post office and you would pay in a pound and be ecstatic to see your savings go over £100.
These days its a bit more complex, and putting money in any savings account is pointless.
So... what's the best way to save for your children's future these days? I have 3, if that matters. Twins and a "singe". They will all be 18 within a few years of each other so don't mind doing a collective savings account. to be split 3 ways at the right time.
I did have an investment account in my name, couldn't open it up in the kid's names and I ended up paying a lot of TAX (by %) on the yield. I'm not enthusiastic about giving the TAX man more of my money, even less so money from the savings for my children.
These days its a bit more complex, and putting money in any savings account is pointless.
So... what's the best way to save for your children's future these days? I have 3, if that matters. Twins and a "singe". They will all be 18 within a few years of each other so don't mind doing a collective savings account. to be split 3 ways at the right time.
I did have an investment account in my name, couldn't open it up in the kid's names and I ended up paying a lot of TAX (by %) on the yield. I'm not enthusiastic about giving the TAX man more of my money, even less so money from the savings for my children.
There are a number of threads about this.
You could open up a Junior ISA for each of them but they would get control at 18. It can be either a Cash ISA (waste of time) or a Stock & Shares ISA (more likely to increase in value). No tax on any gains.
You could put it in Premium Bonds, but the return is poor unless you win big.
You could even open up a pension but they can't touch the money until they are around 57. Massive potential for gains though.
You could open up a Junior ISA for each of them but they would get control at 18. It can be either a Cash ISA (waste of time) or a Stock & Shares ISA (more likely to increase in value). No tax on any gains.
You could put it in Premium Bonds, but the return is poor unless you win big.
You could even open up a pension but they can't touch the money until they are around 57. Massive potential for gains though.
Fidelity does seem cheap & has access to a wider range of funds than Vanguard, if you know which ones to go for:
https://www.fidelity.co.uk/junior-isa/
https://www.vanguardinvestor.co.uk/investing-expla...
A couple of points: you can invest up to £9000 a year & you can't take money out until they are 18.
https://www.fidelity.co.uk/junior-isa/
https://www.vanguardinvestor.co.uk/investing-expla...
A couple of points: you can invest up to £9000 a year & you can't take money out until they are 18.
With junior ISAs, the money becomes theirs at 18. Until then, it can't be withdrawn.
I invested my teenage son's JISA into a tech fund and a global equity index tracker fund. I intend to convert it to a LISA when he's 18 - if he doesn't spend it.
I agree there's little point in doing cash savings unless they will need the money in the short/medium term.
I invested my teenage son's JISA into a tech fund and a global equity index tracker fund. I intend to convert it to a LISA when he's 18 - if he doesn't spend it.
I agree there's little point in doing cash savings unless they will need the money in the short/medium term.
We focussed on investments in the JISA (was CTF) and in our ISA accounts (designated for their benefit), and have only recently opened a cash JISA with Coventry BS (2.95%).
We are hoping to use a bit of a stick and a carrot approach and hope that the child will go along with moving the investments in to a LISA (and continue investing) and they can pi55 the cash up against the wall (so to speak) if that is their choice.
We are hoping to use a bit of a stick and a carrot approach and hope that the child will go along with moving the investments in to a LISA (and continue investing) and they can pi55 the cash up against the wall (so to speak) if that is their choice.
Thanks for the replies all. I'm not sure how I missed stocks & shares junior ISA's the first time around.
I'm in the middle of a house purchase at the moment, but as soon as that is over I expect I will do the full 9k PA for each child for a couple of years to make up for the lost time.
Starting a pension for them now gives me mixed feelings. It's a reflection of the terrible state of this world when you feel that a 3yr old should have a pension. And I guess no guarantee that it will be worth SFA anyway.
I'm in the middle of a house purchase at the moment, but as soon as that is over I expect I will do the full 9k PA for each child for a couple of years to make up for the lost time.
Starting a pension for them now gives me mixed feelings. It's a reflection of the terrible state of this world when you feel that a 3yr old should have a pension. And I guess no guarantee that it will be worth SFA anyway.
Prizam said:
Starting a pension for them now gives me mixed feelings. It's a reflection of the terrible state of this world when you feel that a 3yr old should have a pension. And I guess no guarantee that it will be worth SFA anyway.
Very true & a JISA will be a great start in life for them but even a modest sum tucked into a SIPP has the potential for 50-60 year's compound growth.Mr Pointy said:
Very true & a JISA will be a great start in life for them but even a modest sum tucked into a SIPP has the potential for 50-60 year's compound growth.
Absolutely right. And best of all, even kids get tax relief paid to them on a SIPP investment! Every £80 of cash you put in will immediately buy £100 of investments. Then you get compound growth on the tax relief. So it's not just "free money", it's "50-60 years tax free growth on the money you put in" PLUS "50-60 years tax free growth on the free money". That latter bit is a truly huge benefit. Snap some up.... I believe you will find a number of people on here who go 50% JISA and 50% SIPP for the combination of 50% cash available from age 18 and 50% better tax relief with cash available from age 55 (or whatever).
rockin said:
Absolutely right. And best of all, even kids get tax relief paid to them on a SIPP investment! Every £80 of cash you put in will immediately buy £100 of investments. Then you get compound growth on the tax relief. So it's not just "free money", it's "50-60 years tax free growth on the money you put in" PLUS "50-60 years tax free growth on the free money". That latter bit is a truly huge benefit. Snap some up....
I believe you will find a number of people on here who go 50% JISA and 50% SIPP for the combination of 50% cash available from age 18 and 50% better tax relief with cash available from age 55 (or whatever).
I'll caveat this post with.... No one can guess the future but...I believe you will find a number of people on here who go 50% JISA and 50% SIPP for the combination of 50% cash available from age 18 and 50% better tax relief with cash available from age 55 (or whatever).
There is a train of thought that offers that it is not advantageous to deposit money in to pensions for children. That is not to say it is not advantageous to invest money for children but the focus needs to be more the near future (JISA, LISA, ISA etc). Part of the reasoning is that it would be better for the child, now adult to be able to use the investments to add to their own pension when it best suits them and when they can maximise the TR on offer. The idea is that there is a pot of money that can supplement income or be used so as to make additional contributions in the HRT level (for example).
Sorry to hijack the thread....
Is it possible to have a stock and shares fund for a child without it being an ISA and tied up until 18 and add to it every month? With only a small amount going in I don't think we would break the tax bracket. Does a child get a tax code when they are born or at working age of 16? I'd rather the money not be tied should Covid 20 hit and the money be in need for something serious.
Thanks
Is it possible to have a stock and shares fund for a child without it being an ISA and tied up until 18 and add to it every month? With only a small amount going in I don't think we would break the tax bracket. Does a child get a tax code when they are born or at working age of 16? I'd rather the money not be tied should Covid 20 hit and the money be in need for something serious.
Thanks
jinkster said:
Is it possible to have a stock and shares fund for a child without it being an ISA and tied up until 18 and add to it every month? With only a small amount going in I don't think we would break the tax bracket. Does a child get a tax code when they are born or at working age of 16? I'd rather the money not be tied should Covid 20 hit and the money be in need for something serious.
If you want it in the child's name then no, you have to be 18 to open a GIA. You could open an acount in your name & pay into it of course. You'd pay CGT when you took money out or made any investment changes but CGT can be managed down with a little planning.jinkster said:
Sorry to hijack the thread....
Is it possible to have a stock and shares fund for a child without it being an ISA and tied up until 18 and add to it every month? With only a small amount going in I don't think we would break the tax bracket. Does a child get a tax code when they are born or at working age of 16? I'd rather the money not be tied should Covid 20 hit and the money be in need for something serious.
Thanks
See the post above yours for a solution - unless you have already maxed out your ISA.Is it possible to have a stock and shares fund for a child without it being an ISA and tied up until 18 and add to it every month? With only a small amount going in I don't think we would break the tax bracket. Does a child get a tax code when they are born or at working age of 16? I'd rather the money not be tied should Covid 20 hit and the money be in need for something serious.
Thanks
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