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Just received our birth certificate so can now look to open our baby an account.
It would be for friends/family etc. and myself and my wife to put money in to when it is their birthday etc. As realistically, they don't need all the toys etc. most kids get at Christmas/Birthdays. I'd hand over or at least tell them of the account when they are either looking at uni or buying a house.
What long term investment accounts have other used or could recommend?
My investments are going over to Fidelity soon from L&G, so are there any services Fidelity offer that would suit our needs?
Thanks in advance!
I set up stakeholder pensions with a monthly direct debit for my two when they were born, this was 18 and 22 years ago. Looking now I'd possibly set them up something like one of the Vanguard life strategy funds in an isa or the vanguard sipp.
I set up one of the Child Trust Funds that were around at the time, but i think they are no longer. Most banks will have a Investment type account that you can setup with a regular monthly payment which can be added too. Good luck getting the grandparents to forego buying all the tat they can lay there hands o though 🙂
We've got an ISA for ours with one family.
Might be better rates etc out there, but it's easy and works for us. Direct debit, but you can add when you want. You're in control to they're 18: then it hands over.
ours have kiddy isas with HL. getting money in isn't completely smooth so I just get people to pay me then I log in and kick the same amount in myself
Don't put it in a bank account where you'll get f-all interest. Start up a regular investment plan in a generic tracker fund instead, over 20 years the difference will be staggering.
Our eldest has just received his Child Trust Fund, together with a simple £10 a month scheme we set up and another fund my parents set up as well. Soon mounts up over 18 years, so even a simple scheme is worth doing doing.
He's stuck it in some 3 year scheme so he can't touch it while he's in uni.
We use Intelligent Money and have seen very good returns.
Worth a look.
https://www.intelligentmoney.com/
Hmmm. I wonder if I need to re-think my strategy for doing this.
I set up an investment ISA for my daughter - nothing linked to her etc. It's just a normal investment ISA. Problem is, I didn't realise you can't pay into more than one ISA in the same financial year. So I can't keep hers running with regular payments & then set-up a second one for myself.
I wasn't sure about the whole thing of the account being in her name & then at 18 it automatically becomes hers.....what if she turns out to be a lunatic & blows it on a motorbike & clubbing in Ibiza. If she does that, I'd have rather spent it myself 🙂
Don’t put it in a bank account where you’ll get f-all interest. Start up a regular investment plan in a generic tracker fund instead, over 20 years the difference will be staggering.
This
I wasn’t sure about the whole thing of the account being in her name & then at 18 it automatically becomes hers…..what if she turns out to be a lunatic & blows it on a motorbike & clubbing in Ibiza.
Simple don't tell her about it.
I set up an investment ISA for my daughter – nothing linked to her etc. It’s just a normal investment ISA. Problem is, I didn’t realise you can’t pay into more than one ISA in the same financial year. So I can’t keep hers running with regular payments & then set-up a second one for myself.
Yeah, that is not a tax-efficient strategy. You could set up a SIPP for your daughter instead, chances are she'll be responsible by aged 60ish 😉 .
Our six year old has Premium Bonds, plus a bank account, when his account reaches a few hundred, we buy more bonds, leaving a few quid in the bank.
Our six year old has Premium Bonds, plus a bank account, when his account reaches a few hundred, we buy more bonds, leaving a few quid in the bank.
As above, that sounds like a good way to piss away a golden opportunity.
Our six year old has Premium Bonds, plus a bank account, when his account reaches a few hundred, we buy more bonds, leaving a few quid in the bank.
I'm pretty sure that's the approach my grandparents took with my mum when she was born. Her childhood "savings" after inflation was worth about the same as a nice-ish bottle of wine.
Nice idea, but pretty pointless all told.
finbar
Yeah, that is not a tax-efficient strategy. You could set up a SIPP for your daughter instead, chances are she’ll be responsible by aged 60ish
I considered that, but then there's 'saving for the future' and 'saving for the future (if we ever get there!)'!!
You have a primary choice between setting up something in your own name with the intention of handing it over later - the main benefit being that you retain control and can change your mind - and setting it up explicitly in the child's name, the main benefit being that it's not treated as part of your income/wealth and therefore there may be tax advantages. TBH I'm not that sure of the current tax situation which of course changes periodically. And depends on your other income.
Stocks and Shares Junior ISA seems the obvious choice for the latter based on a v quick google.
We went the CTF route 18 years ago and switched to a junior share isa as soon as we could due to the poor performance of the CTF. It has always been on the understanding of paying for a uni degree or a house deposit. All money from relatives went in plus small regular contributions from us and it’s now worth 27K! Massively helped by 4 or 5 generous and well timed donations from grandparents. Kids have known about them for a long time and it was a great lesson in compound interest and the effect of a crisis and its recovery which I wish I had been given. We would review them yearly so they understood what was going on
We setup a kids' savings account with the bank when our wee one arrived (Halifax but they're all as shite as each other) which the grandparents send pocket money to and we put the children's allowance into each month.
I've also set her up with a Junior S&S ISA with Vanguard (LifeStrategy 100% Equity Fund in case you care) and I shuffle the contents of her bank account into this each year when I remember.
Given it's about as Long Game as she could possible play I'm prepared to ride out any bumps and dips in the hope that over the long term it'll pay off compared to the cash stagnating in a savings account or Premium Bonds.
She's up 12.8% so far (I know, it can all change tomorrow) so the early signs are good.
My children seem to be sitting on a few hundred quid from recent Birthdays & Christmas and my wife was planning on opening bank accounts. I had been meaning to look at alternatives so this thread is timely, thanks OP.
So a stocks and share ISA in their name is best then? I have one with HL myself.
Another vanguard junior ISA here for my 2 daughters.
Their online portal is really easy to use. I have it set up so I log in as myself but can see the whole family's accounts and manage them from there.
Set it up in the child's name. Then others can pay into it and it doesn't affect your own isa allowance. You still get full control over it. Others (i.e. grandparents) can pay into it too. The annual limit for kids is £9k.
The other route is a junior sipp but that will be less useful to them when it comes to house buying, uni fees etc. The advice I've seen was to only consider that if you've got spare cash left after reaching their isa limit, which would be good going!
didn’t realise you can’t pay into more than one ISA in the same financial year.
@stumpy01
Pretty sure the rule is that an individual can't *open* more than one ISA account in the same tax year
But you can pay into more than one ISA, provided the total amount paid into all your ISA accounts doesn't exceed the allowance (£20k for adults and £9k for children)
It looks like you're correct! Thanks! I've obviously misunderstood something I've read somewhere!
Great, cheers! I did think it was a bit odd!
You can only pay into one *type* of ISA per year (S&S and Cash).
You can have multiple ISA’s but in year subscriptions are limited to a single type of account.
Ref Op: a JISA is what you’re after.
I use vanguard for low Fee’s and the simple website.
Covid baby so Junior’s investment returns are healthy 😎
Thanks all for the replies. It's an absolute mine field this topic so some guidance has been helpful. I'll take a look at Vanguard today I think with a Stocks and Shares ISA.
GAH!! So, it looks like I was correct & you can't pay into more than one stocks & shares ISA in the same tax year. The wording of the different articles makes it quite hard to work out the actual meaning, but this link makes it quite clear:
with the specific text I have interpreted, copied below:
If you have been paying into one stocks and shares Isa since 6 April, you cannot pay into another one - including your old one that you opened in 2020 - until 7 April 2022.
What you can do though, is pay into another cash Isa with a different provider, so long as you don't go over the £20,000 Isa allowance across these accounts.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, adds: The rules mean you’re only allowed to pay into one Isa of each type every tax year - and your £20,000 annual allowance is split between them.
So you could have a stocks and shares Isa with one provider and a cash Isa with another, but you couldn’t pay into two stocks and shares Isas or two cash Isas in the same tax year.
^ We had this issue and in the end my wife opened a S&S Isa in her name on behalf of both children. We might give them the money later on ;). I have one in my name for general savings. We'll never use the allowance in a single year.