Whats best option for Child Investment

Smilin_2

Hi,

My two daughters have inherited £2000 each. My eldest daughter is 11yrs, my youngest is 15weeks.

I want the money to be locked away until my oldest reaches 21, and my youngest reaches 18

I'm baffled by all the different options available, investment isa's, NS&I childrens bonds.

Would someone be kind enough to help me understand which option is best for each of my daughters?

Many Thanks
James

Reaper

If you are not already contributing towards it the obvious thing to do with your youngest is to add it to her Child Trust Fund. You can add up to £1200pa so it would mean hanging on to £800 of it until the start of the next financial year.

For the older child your first decision is savings or investments. Personally I opt for investments over the long term but it is up to you. My own purely personal choice was to set up an investment in trust. There are a couple of threads around already where I discussed this. Here is one of them: https://forums.moneysavingexpert.com/discussion/2615635
The one I chose does allow you to keep it running until age 21 (or any age you want) though as you will see in that thread it might be possible for them to overule you and end the trust prematurely.

If you would rather go with savings then there is an MSE article on kids savings accounts here: http://www.moneysavingexpert.com/savings/child-savings-tax-free
I think they all end at age 18

dunstonh

Whats best option for Child Investment

There is no such thing. There are tens of thousands of options and only time will tell what is best.

Typically, the type of investment most use are either unit trusts (or OEICS) or investment trusts. You can hold them under designation to the child which can then be transferred to them when they are older.

Personally, I use regular contribution unit trusts for my daughters. Mainly as i know the UT universe well.

If the Will stated that the money was for the benefit of the children until a certain age then the unit trusts can be held in a Will Trust. The executor of the estate should make sure that a Will trust is required or not before distributing the funds (most solicitors will but its not uncommon for inexperienced executors i.e. family members, to not realise this and distribute the money to the parents first. Which then makes putting it in a Will trust difficult as the money is meant to come direct from the executors account).