Looking for a long term investment plan for my baby boy

cooliegirl

Hi

I have just had a baby boy and wanted to set something long term up, in my name. I already have a regular savings account for him, which I will pay into monthly and then move into an ISA but I wanted something else - an investment based savings plan. I have been looking at bonds but I am not so confident that they offer the highest returns.

I'm looking for something that's easy to manage, tax efficient and something that I can be in control of.

Mutual funds, stocks, bonds - I'm a bit confused as to what to choose. Can anyone offer any suggestions/advice?

Thanks
Sam

BLB53

For a 20 year investment you need to be looking at equities. Have a look at investment trusts with Aberdeen starting at £30 per month http://www.invtrusts.co.uk/aam.nsf/InvestmentTrusts/investchildren maybe split between Murray Income (UK) and Murray International (global)

jimjames

And read this thread for things to consider about the legal structure of what you do. You may not want them to have access to the money as soon as they turn 18.

https://forums.moneysavingexpert.com/discussion/3886545

cooliegirl

jimjames wrote: »

And read this thread for things to consider about the legal structure of what you do. You may not want them to have access to the money as soon as they turn 18.

https://forums.moneysavingexpert.com/discussion/3886545

Thanks but I was the OP on this post!

knuckledragger

I've mentioned it before: set up a SIPP for the little guy.
You can invest in the vasy majority of funds/shares and other investments held within a SIPP. It's tax efficient, can be easily managed and he can't blow it at 18! In reality, it will give him a big boost at age 55 (as things stand). Additionally, no matter how bad his life choices may be, creditors cannot get their hands on it. There is of course the benefit that if you can deposit £2880, then HMG will top it up to £3600 for free! So a nice little profit before the SIPP has even made anything...

xylophone

Are you aware of tax treatment and the concept of a "bare trust"?http://www.hmrc.gov.uk/tdsi/children.htm
http://www.hmrc.gov.uk/individuals/savings-income.htm
http://www.sit.co.uk/products/investing_for_children/features/questions_and_answers/

BigDonut

Similar to the OP I'm looking for something for investing for the little guy but I don't want him to be able to get his hands on it at 18.

I'd rather he was older, thought it would be useful to be able to pass it to him if there was a good reason he needed it sooner.

can you specify an age with a trust?

rpc

BigDonut wrote: »

can you specify an age with a trust?

Bare trust, no. It is set in law as 16 (Scotland) and 18 (rest of the UK). In a bare trust the money always belongs to the child, you are just "minding" it while they are young.

Discretionary trust has a lot more flexibility.

If the money is from parents, there is probably not much merit in a trust. The £100 rule means you are probably going to get taxed anyway so you could just save under your own name.

BigDonut

rpc wrote: »

Bare trust, no. It is set in law as 16 (Scotland) and 18 (rest of the UK). In a bare trust the money always belongs to the child, you are just "minding" it while they are young.

Discretionary trust has a lot more flexibility.

If the money is from parents, there is probably not much merit in a trust. The £100 rule means you are probably going to get taxed anyway so you could just save under your own name.

Money is from grandparents initially as a lump sum then was planning contributions from myself.

xylophone

In your position I would keep the money given by grandparents separate from that given by you and your wife (unless all contributions are going into a JISA or other tax free savings). See post 6 above and http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/Trusts/Typesoftrustandtaximplications/DG_191735

Information about the JISA can be found here. http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/ISAsandJuniorISAs/DG_199672

cooliegirl

Can anyone else offer anymore views on this at all?

Just to clarify, I'm looking for an investment plan for my son with good returns, my requirements are:

- a long term investment plan (low- medium risk maybe)
- I want to have full control, this is not something that I would want my child to have access to at 18 yrs old
- Fairly tax efficient and low operating costs
- Low maintenance

I'm not looking for a regular savings account, I'm already doing that separately.

Thanks