What savings for my 6 year old to use when an adult

[Spare tyre]

I’d like to set up some sort of savings for my daughter

At the moment she has this set up by grandparents

https://www.nationwide.co.uk/savings/childrens-fut...

Which offers 3.05 aer - so seems to be treading water - please correct me if I’m wrong

That doesn’t seem that good to me

Ideally I want to put away any spare cash we have as a family to be used for her first property deposit / uni etc

At the moment we are fortunate to have a little going spare so want to try and help now whilst we can

Is some sort of junior stocks and shares isa the way to go

Not sure if it’s obvious or not (I don’t know what I’m talking about) but I don’t want it to affect mine or my wife’s tax etc

Many thanks

[blindspot]

Put our son into a vanguard s&s JISA. £100/month since he was a year old, few extras at birthdays/Christmas when he doesn’t need any more plastic tat. He recently turned 8 and has a balance of just under £15k.

My plan is that this will allow him a house deposit or pay for an advanced degree - and my hope is that I won’t have failed so badly in educating him about the value of money that he just spaffs it on crap at 18.

[c32dave]

I could only find three practical options for my kids: Junior ISA, SIPP, or low coupon gilts in a general investment account. Mine have a mix of all three. Clearly there’s downsides to all - the SIPP is only available to them very late in life (too late to be of use in funding a house purchase) and the jISA becomes available in full at 18, as does the GIA, which might be too young.

Anything else (e.g. giving them cash for a kids savings account) meant that I was still liable for tax on the interest, once it exceeds £100 (I.e. about £2.5k of savings).

[dingg]

Ser up a jisa for my grandson when he was 3 bunged 3k in to kick it off and 100 a month since, he's 7 in November and it's up to 11k now, will be doing the same for the latest once he's 3 and everyone who comes along after that...

Eta, another 'hopeful they don't piss it up the wall when they get to 18' :-0

Edited by dingg on Sunday 21st September 14:57

Edited by dingg on Sunday 21st September 14:58

[C69]

Spare tyre said:

Which offers 3.05 aer - so seems to be treading water - please correct me if I m wrong

That doesn t seem that good to me

Yes, that's a terrible rate given the current Bank of England base rate and where inflation is. Slowly sinking, rather than treading water, unfortunately.

S&S JISA would be a better solution. £9k can be paid in each year, which becomes the child's money (so your own £20k ISA allowance isn't affected).

If you didn't want to put everything into a S&S JISA, each child can also open a Cash JISA (so the £9k allowance would be split between the two). Currently rates aren't great, though: https://moneyfactscompare.co.uk/isa/junior-isas/

[Spare tyre]

Brilliant chaps- can anyone recommend a decent stocks and shares isa please.

Many thanks

[Simpo Two]

Spare tyre said:

Brilliant chaps- can anyone recommend a decent stocks and shares isa please.

Many thanks

An S&S ISA is just an account, an empty box. It's what you put in it that's important. For example 'blindspot' used Vanguard products (because his ISA is with Vanguard so they have to be).

[Spare tyre]

Simpo Two said:

An S&S ISA is just an account, an empty box. It's what you put in it that's important. For example 'blindspot' used Vanguard products (because his ISA is with Vanguard so they have to be).

Yup daft question - I’m not that switched on to finance

So perhaps my question is, is there a managed stocks and shares junior isa that is recommended

Ie perhaps I choose the risk level and you get a mixed bag so to speak

I don’t want to be choosing the companies myself as I’m a cretin

Thanks again all, trying to make my daughters start in life more pleasant than mine

Cheers

[Sport_Turismo_GTS]

Spare tyre said:

Yup daft question - I m not that switched on to finance

So perhaps my question is, is there a managed stocks and shares junior isa that is recommended

Ie perhaps I choose the risk level and you get a mixed bag so to speak

I don t want to be choosing the companies myself as I m a cretin

Thanks again all, trying to make my daughters start in life more pleasant than mine

Cheers

With the investment horizon that you have, I’d go for a low cost Global equity tracker.

[butchstewie]

Spare tyre said:

Yup daft question - I m not that switched on to finance

So perhaps my question is, is there a managed stocks and shares junior isa that is recommended

Ie perhaps I choose the risk level and you get a mixed bag so to speak

I don t want to be choosing the companies myself as I m a cretin

Thanks again all, trying to make my daughters start in life more pleasant than mine

Cheers

A simple tracker like Vanguard FTSE Global All Cap might be all you need.

If you really want a level of risk management look at the Vanguard LifeStrategy range of funds.

Other providers offer similar ranges where you can choose the balance of stocks and bonds but if you don't want to put loads of time and effort in Vanguard should always end up there or there about for a given appetite for risk.

[macron]

That Nationwide one is a bit weird, locked until they're 17, so why not have a cash JISA? Coventry still paying 4% tax free, I'd go that for risk freeness.

https://www.moneysavingexpert.com/savings/junior-i...

If you don't mind risk, and she's 6, then the stocks and shares one is open to you. The general aim of this thread might be of interest for the contents.

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Simpo Two]

Spare tyre said:

So perhaps my question is, is there a managed stocks and shares junior isa that is recommended

Ie perhaps I choose the risk level and you get a mixed bag so to speak

I don t want to be choosing the companies myself as I m a cretin

No problem, when money is involved it's good to stay within comfort limits.

If you invest in individual companies you'd be buying shares. However I think you're looking for a fund, which is a collection of many companies in a certain sector, and that dampens out the risk. You may also encounter an ETF, which is a fund you can buy and sell instantly like a share.

I mostly use Fidelity who offer about 3,000 different investment products and have a website that helps you find the ones that suit what you're looking for. See if this makes sense: https://www.fidelity.co.uk/planning-guidance/inves...

So in the example you'd open an S&S ISA account, then click 'Add Cash' - which hoovers money in from your chosen current account - then once the cash is in the account you invest in whatever you want. In this instance Fidelity is acting as a 'platform', but they have their own investment products too.

One thing you might want to consider is whether you want actively managed funds, which cost more, or trackers which cost much less and just track whatever market they're set to track. Every product has an info page where you can see performance and charges. That may be too much to take in in one step but every journey starts with one step

[lizardbrain]

in don't think you need to worry about tax free element, just any account will do, as the kid isn't earning. if/when it starts to approach 10k a year, then you could move it into an isa then? I don't think it needs to be too complicated?