ISA for 18th birthday gift

k9oky

This is not a 'clever' way of teaching her how to save/invest. Since what you have done is prevent her contributing any more money to an ISA this tax year!


This makes this an extremely good point!!!!!!!!!

CLAPTON

k9oky wrote: »

"This is not a 'clever' way of teaching her how to save/invest. Since what you have done is prevent her contributing any more money to an ISA this tax year!"

isa allowance is £5340 in any one tax year, so even if the father puts £150 in a fixed rate product you still have £5,190 to invest this tax year in any other cash isa product. .

it is only allowable to contribute to ONE cash ISA in any one tax year so she would NOt be allowed to contribute 5,190 to 'other cash ISA products.

hence th comments about this not being a good idea to teach good financial management

noh

isa allowance is £5340 in any one tax year, so even if the father puts £150 in a fixed rate product you still have £5,190 to invest this tax year in any other cash isa product

Not so.
Current tax year subscriptions can only go to one cash ISA.
Therefore the only options are to make more contributions to the existing fixed ISA if they will accept them which is unlikely or to transfer the existing ISA to another and make additional contributions to that.

k9oky

thankyou - I'm genuinely very happy to know this!

jennifernil

Loughton_Monkey wrote: »

Clapton has a very good point.

Firstly, you cannot legally open such an account in her name. She must do that. But let's just run with the idea that you give her the cash and walk her down to [say] Halifax and let her take out a 5 year fixed rate ISA for £150 in her own name.

This is not a 'clever' way of teaching her how to save/invest. Since what you have done is prevent her contributing any more money to an ISA this tax year! Similarly, she would not 'thank' you very much in two years time when she is sitting looking at the 5% interest, if/when any old bank is giving 6% on instant access accounts - and she is forced to sit there for another three years on such a 'low' rate.

NS&I Index Linked bonds look a far better bet to me.

My thoughts exactly too.

I second the NS&I suggestion.

ButterflyBee

I was actually just looking for a simple answer to a question. This "mother" would rather do the investing on hard earned cash because the father has been awol for 18 years. I asm now of the opinion that an ISA is not the right choice and will be looing into Index Linked Saving Certificates. I am not all familiar with these but thank you for the advice, my question has been answered and I can furthermore research the option with my daughter.