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We have 3 nephews, between 5 & 7.
We should have started this 7 years ago, but what’s the best way to save them some money for their 18th birthdays?
Say we put £1000 lump in and then monthly £100 - what’s likely to get the best return in 11 years time?
Has to be easy and look after itself otherwise we won’t do it.
Cheers 🙂
Jesus, we've got 11 nieces and nephews and they get nowt like that.
£25 per year then £100 for their 21st
Jesus, we’ve got 11 nieces and nephews and they get nowt like that.
£25 per year then £100 for their 21st
We’ve only got 3 and unlikely to get any more 🙂
Also none of our own to pay for.
Open a pension for them and seed it with the £1000? They’ll hate you at 18, but love you when they’re 40.
The pension is definitely an idea to consider.
My parents have been putting £50 a month into a standard savings account for our two - eldest has just turned 18 and their £10,800 had become around £13k I think. He was very pleasantly surprised.
Open a pension for them and seed it with the £1000? They’ll hate you at 18, but love you when they’re 40.
I guess this isn’t a bad idea but I’d rather do something sooner for them, they’re more likely to be short of cash when they’re 18 (or slightly older if they’re not sensible enough by then 😁)
Junior ISA. Similar to stocks and shares ISA, all managed for you and they can’t access it until they are 18.
Why?
Presumably they'll have parents who'll indulge their every whim (as is the way nowadays). Why join in and make sure they're completely unable to understand how to paddle their own furrow (I do like mixing my metaphors...🙃).
Spend some time teaching them the value of work and how it relates to money and you'll do them much more of a favour. Teach a man to fish and all that. 👍
Absolutely junior ISA. It’s what it’s for. I believe their parents/guardians will need to set it up for you/them. We’ve set them up for our kids, needed birth certificates etc.
Parents/guardians will then be able to give you the account details for you to make deposits. Set up a standing order from your bank if you like then it runs itself.
Why?
Presumably they’ll have parents who’ll indulge their every whim (as is the way nowadays). Why join in and make sure they’re completely unable to understand how to paddle their own furrow (I do like mixing my metaphors…🙃).
Spend some time teaching them the value of work and how it relates to money and you’ll do them much more of a favour. Teach a man to fish and all that. 👍
Why? Why the hell *not* if they want to.
Who’s to say they can’t do this as well!?!
After all a good strong work ethic and a some seed funding would be great.
Or maybe don’t be such a sourpuss and try giving actual advice!
Junior ISAs aren’t a bad idea, though kids have their own tax allowance so unless they are already likely to be earning large amounts of interest don’t get too hung up on tax-efficiency. And if they are already earning large amounts of interest then go buy bikes with the cash instead, the kids will be fine!!
Or maybe don’t be such a sourpuss and try giving actual advice!
Errrm, I did. It was just different from yours...
I haven’t much more to add than :-0
I have a stocks and shares ISA with HL and was thinking junior versions would be a good idea for my two little bundles of joy. How do I do this easily?
Invest regularly not as a lump sum. Google pound (or dollar) cost averaging.
Use a compound interest calculator to figure out how much you want to give them and work backwards to figure out the monthly figure.
Yeah junior isa is the way fwd. Just hope they don't turn out to be a ****t.
Having said that they can only have one ISA so would need to make sure the parents don't have one.
An index linked accumulator fund would with low fees would work well for you by the sounds of it. Low maintenance and cheap. In 10 years the value of the fund should have doubled, i.e. you have made more interest then actual cash you have out in.
Finally, as your horizon is fairly long you could afford to take more risk in the early years and then reduce the risk later. E.g. more shares (risky) in the fund to start with and less bonds (stable) then switch it up towards the end.
£50 a month into a standard savings account for our two – eldest has just turned 18 and their £10,800 had become around £13k I think
Ew, that is a shockingly bad return. We did something similar and deeply wish we'd taken some decent advice on investing it properly instead.
An index linked accumulator fund would with low fees would work well for you by the sounds of it. Low maintenance and cheap. In 10 years the value of the fund should have doubled, i.e. you have made more interest then actual cash you have out in.
Yes this or another fund. Maybe a clean/ green energy fund?
I've just put some money in a fund called Pictet Clean Energy
Why?
Presumably they’ll have parents who’ll indulge their every whim (as is the way nowadays). Why join in and make sure they’re completely unable to understand how to paddle their own furrow (I do like mixing my metaphors…🙃).
Spend some time teaching them the value of work and how it relates to money and you’ll do them much more of a favour. Teach a man to fish and all that. 👍
FFS. The two are not mutually exclusive.
As parents, we don't have much spare cash to save much for the kids.
Eldest had two jobs running from age 14-18, and had just started earning as a pit musician when Covid closed that option.
His sister is 14 and has had a Saturday job for a couple of years nearly now.
Both understand that they have to earn some of what they want to spend, and have learnt from their grandparents savings for them the importance of being able to save when/if they can.
Hopefully they will continue to grow and develop as sensible and mature human beings.
Ew, that is a shockingly bad return. We did something similar and deeply wish we’d taken some decent advice on investing it properly instead.
Yeah, but they were just tucking a bit away and not looking to maximise the return. Plus if anything happened to my dad, mum would have had to stop the saving as she has no real pension/income of her own, and probably needed the money for herself.
We have 3 nephews, between 5 & 7.
So they're all aged 6? (-:
All I've got (aside from "shit, that's five grand apiece and at 18 they'll likely spend it on C&H") is, consider that £100 today and £100 in 11 years time is likely to be a very different value if you're looking at setting up a fixed payment. £100 eleven years ago is £140 today.
I would absolutely be looking at "invest" rather than "save".
Oops, sorry I lost this thread…
Cheers for all the input, we’ve temporarily set up a savings account to start putting money in whilst we sort out a proper solution.
Junior ISA.
Two of them are in NZ so I guess that rules out any of the tax free child savings etc. Might be worth looking at for the other one.
An index linked accumulator fund would with low fees would work well for you by the sounds of it. Low maintenance and cheap. In 10 years the value of the fund should have doubled, i.e. you have made more interest then actual cash you have out in.
Finally, as your horizon is fairly long you could afford to take more risk in the early years and then reduce the risk later. E.g. more shares (risky) in the fund to start with and less bonds (stable) then switch it up towards the end.
OK this sounds great, but no idea where to start. Is this what the likes of Wealthify & Evestor etc will do for me?
18 they’ll likely spend it on C&H”
I want us to keep control of it incase they turn out to be idiots and we can keep hold of it for a few more years.
Why?
Because we can and want to 🙂
Why?
Because we can and want to 🙂
Best reason. It's why my mates kids get envelopes stuffed with cash at Christmas plus I always miss their birthdays.
Speaking from experience as someone who was 18 once,
You'd likely be doing them a favour by saving for their 21st instead.
Uncle !
You’d likely be doing them a favour by saving for their 21st instead.
Very true! Ages subject to review 🙂
OK this sounds great, but no idea where to start. Is this what the likes of Wealthify & Evestor etc will do for me?
Not used them. HL.co.uk have lots of info and tools to help you assess the best fund. You can also book a free financial adviser appt too.
It's is probably worth reading up on it while you have your savers account in the background.
Speaking from experience as someone who was 18 once,
You’d likely be doing them a favour by saving for their 21st instead.
+1 for this
I wish my childhood investments were given to me at 25, not 18. Or even better just hold on to it [for them] until they are buying a house