Author Topic: Investing for children  (Read 1046 times)

shelivesthedream

  • Magnum Stache
  • ******
  • Posts: 3723
  • Location: London, UK
Investing for children
« on: May 21, 2018, 02:26:33 AM »
I recently gave birth and people have given us money for our new son - about £1000 in all. I expect my parents and grandmother will give further monetary gifts over the years. (I personally arrived at eighteen with about £20,000 in the bank, which was an enormous boon and paid for my postgraduate course. My family believes in handing on money.)

We've paid it into our accounts for now but would like to open an investment account for BabySLTD and transfer it and buy Vanguard LS100.

My intention is that we'll introduce him to the account at an appropriate age and gradually hand over the management of it and when he's eighteen it'll be his to do with as he pleases, but that hopefully we'll have taught him how to deal with investments and he'll have got used to the idea of having a lot of money sitting there working for him.

Is a JISA the best option? I don't really now what's out there an what the advantages and disadvantages are, an don't have a lot of headspace to spend a long time searching. One question I also have is what happens if it's an online account (eg. Vanguard) and someone either sends a paper cheque made out to the child (so can't just pay it in to ours an transfer) or wants to do a direct transfer into the account?

never give up

  • Pencil Stache
  • ****
  • Posts: 862
  • Location: UK
Re: Investing for children
« Reply #1 on: May 21, 2018, 03:01:16 AM »
I would have thought JISA is the best option assuming contributions wonít be over the limits in which case you would need an additional vehicle. As far as I know (Iím no expert) BabySLTD is obviously the child but you (or Mr SLTD) would be the registered account holder. I think anyone (grandparent, friend etc) can make a contribution. They would probably need the account number and full name of the child to do this online. This would be added to the account as cash with the registered account holder (you) then needing to manage the money and invest it it in LS100 accordingly.

I guess just make it clear to those that may want to contribute (assuming itís a relatively small group of people) that they can either do it online directly or else make the cheque payable to you so you can invest directly on BabySLTDís behalf.

dashuk

  • Stubble
  • **
  • Posts: 102
Re: Investing for children
« Reply #2 on: May 21, 2018, 03:05:35 AM »
Would it make sense to have a cash savings account in SLTD Jr's name as well as the S&S JISA? Gives something to pay cheques into, and gives somewhere to hold some portion of money if you anticipated spending it on them before they were 18 - because obviously once it's in the JISA it's stuck there. Can get 3-4% on instant access kids accounts.


PropJoe

  • 5 O'Clock Shadow
  • *
  • Posts: 31
Re: Investing for children
« Reply #3 on: May 21, 2018, 03:36:36 AM »
I opened a Santander 123 mini for my 2 year old. It pays 3% on balances up to 2k.

When we hit 2k, I may open something else as well. I'll have to ask my daughter what her appetite for risk is! :D

poppydog

  • Stubble
  • **
  • Posts: 132
  • Location: Scotland, UK
Re: Investing for children
« Reply #4 on: May 21, 2018, 10:36:26 PM »
Iím now a proud grandad of three months standing!  When baby was born I got his mum to set up a JISA for him into which Iím putting in a monthly sum, invested in Vanguardís LS100 (great minds etc!)

I quite like the idea that he canít touch it until heís 18, when it will hopefully put him through uni debt-free or pay the deposit on a flat or similar.

Many Congratulations SLTD.

ruffles

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Investing for children
« Reply #5 on: May 22, 2018, 02:26:06 AM »
Our one year old has a current account in her own name, but it's managed by us. All cash, cheques and bank transfers for her are paid in t here. We keep around £200 in there, and anything else is invested in VLS100. We have decided not to open a JISA at this stage, instead the money is in my S&S ISA.

ExitViaTheCashRamp

  • 5 O'Clock Shadow
  • *
  • Posts: 56
Re: Investing for children
« Reply #6 on: May 23, 2018, 12:26:32 AM »
Congratulations shelivesthedream !

 Everyone warns you about the lack of sleep. No one warned me about the ears... my ears have suffered terribly, especially now the kids are old enough to seek out tunes on Youtube and play them over... and over... and over again :D

 Personally I went with the JISA's for my kids. Whatever happens to me and my finances, with the money locked away from the tax man and benefits office - it's guaranteed to be theirs.

Slow road to freedom

  • 5 O'Clock Shadow
  • *
  • Posts: 70
  • Location: UK
Re: Investing for children
« Reply #7 on: May 26, 2018, 12:21:14 AM »
JISAs for both of ours. They are building an awareness of investments via our Vanguard friends mostly, but also one or two other tracker funds.

They also have current accounts, but they are teens. Always saving half!

The only pain with the JISAs is how to pay money in. When they have a lump sum saved (say £200) in their own account, they canít pay it in themselves - theyíre not over 18. So we have a protracted game of Ďmove the moneyí - birthday cheques in to their account, transferred to my account, then into the JISA. And it is characterised as a gift from me (which it isnít). Iím banking on the clear audit trail showing the transfers being enough to show the provenance of the money if I need to.

The wonders ...

shelivesthedream

  • Magnum Stache
  • ******
  • Posts: 3723
  • Location: London, UK
Re: Investing for children
« Reply #8 on: May 26, 2018, 04:13:47 AM »
Why can't they pay into a JISA themselves? I know they can't take money out, but why not put it in?

poppydog

  • Stubble
  • **
  • Posts: 132
  • Location: Scotland, UK
Re: Investing for children
« Reply #9 on: May 26, 2018, 06:35:50 AM »
Why can't they pay into a JISA themselves? I know they can't take money out, but why not put it in?

Anyone can pay into a JISA, up to the annual limit. The responsible parent is the only one who can manage the account though.

shelivesthedream

  • Magnum Stache
  • ******
  • Posts: 3723
  • Location: London, UK
Re: Investing for children
« Reply #10 on: May 26, 2018, 09:50:42 AM »
Why can't they pay into a JISA themselves? I know they can't take money out, but why not put it in?

Anyone can pay into a JISA, up to the annual limit. The responsible parent is the only one who can manage the account though.

Aha, with you. Sleepy brain make thinking hard. :)

LFH86

  • 5 O'Clock Shadow
  • *
  • Posts: 34
Re: Investing for children
« Reply #11 on: May 26, 2018, 03:37:22 PM »
Many congratulations!

I have done similar to others and set up a JISA, VLS100. We had some inheritance around the time he was born so put the maximum in to start him off and then will add to it with birthday money etc as he grows. He also has a current account which we contribute £10 to every month. My thinking is that he can know about the current account from a young age but maybe we'll not tell him about the JISA which has the potential to be a much larger amount. I don't want him waiting to turn 18 to blow it all on booze...