Please help !

[Deleted User]

There's loads to think about isnt there!? Thank you SO much :j

gadgetmind

Deleted_User wrote: »

the kid can get its hand on the money at 18 ( too early!??) :cool:

No, not in my opinion. By age 18, they should be well down the path of thinking and acting like an adult.

Our daughter got pretty much everything we'll ever give her on her 18th birthday, and she knows that it's now down to her. Long-term financial drip-feeding does way more harm than good IMO.

ses6jwg

dont forget if you don't utitilise a tax free wrapper like a junior ISA you will likely be liable for tax on the interest even if you place the savings into "trust", unless you put your fathers name on the account instead

DiggerUK

Deleted_User wrote: »

.... I don't fancy shares etc cos its so volatile atm.....

I agree that equities are volatile. I also believe that they won't improve long term, apart from a temporary sugar rush boost with the latest government stimulus.

No savings a/c's get anywhere near holding their value against inflation eating them up, so I can't see the point.

If NSI bring back their Inflation Linked Savings Certificates, then buy some. (no plans atm)

Volatility is something associated with gold's price, but I encourage you to consider buying a few sovereigns. Long term I believe they will survive all the printy printy, and hold the value of her grandads gift.
..._

MoneySaverLog

DiggerUK wrote: »

I agree that equities are volatile.

Volatility is something associated with gold's price, but I encourage you to consider buying a few sovereigns. Long term I believe they will survive all the printy printy, and hold the value of her grandads gift.
..._

Gold is too expensive and overpriced and has no practical application imo, I won't mention the other metal.

gadgetmind

MoneySaverLog wrote: »

Gold is too expensive and overpriced and has no practical application imo, I won't mention the other metal.

It's very hard to judge whether anything is over-priced or under-priced, be it gold, equities, gilts, or cash. This is the principle behind the Permanent Portfolio, which holds 25% of each.

A few investment trusts (e.g. Personal Assets) run their portfolios along broadly similar lines.

bigadaj

gadgetmind wrote: »

It's very hard to judge whether anything is over-priced or under-priced, be it gold, equities, gilts, or cash. This is the principle behind the Permanent Portfolio, which holds 25% of each.

A few investment trusts (e.g. Personal Assets) run their portfolios along broadly similar lines.

But you will have an opinion, I understand the hedging principle here but surely you would alter this eg gilts in uk at least are very overpriced, gold looks moderately overpriced and shares look underpriced. I know you're a tracker fan but buying uk gilts now looks crazy.

cloud_dog

Deleted_User wrote: »

Ok so you are pretty +ve about the junior isa??

MSE seems to think its useful for rich people ( and I sure aint one of those!) but the downside IS that the kid can get its hand on the money at 18 ( too early!??) :cool:

Kim

I think you need to take a step back.

Things to consider:

• Did your farther have any views on the use of the money, i.e. Uni, Car, partying
• Did he have any views on timescales, i.e. when she should get the money?

Also, you don't need to view this money as one pot, you can break it down in to multiple tranches. You can then look to use the different tranches to tie in to how / when the money could be used.

For example:
Split it in to two - one in to a JISA (she gets it at age 18), one in to an account to be given to her at age 21

Alternatively split it equally in to 3 with a small (£2k) amount going in to investments (I know you said you were not comfortable with investments but it might be worth considering for a small proportion; perhaps only £1k).

Alternatively you agree that the money is to assist Uni fees etc, that way you treat it as one pot and use it when appropriate.

I think you need to decide what the money is for, i.e. if it is just for your child to do with as she pleases (which is fine) then go with it, alternatively look at splitting it, similarly look at giving it at different ages, i.e. 18, 19, and 20 or 18 and 21.

Before you look at product options decide how/when you want the money to be used then you will be able to focus./decide on products/accounts which suit the purpose.

EDIT: Also, you will find posters here will be able to give you far more specific options if you can confirm some of the above.

xylophone

Hopefully he'll want to continue saving, but agree it is a risk. The only other option is to open an account in your name and not tell him and then gift him the money later on when you feel ready.

No - if in the parent's own name it is regarded as the parent's own money and would be taxable at the parent's rate.

dont forget if you don't utitilise a tax free wrapper like a junior ISA you will likely be liable for tax on the interest

even if you place the savings into "trust", unless you put your fathers name on the account instead

No - the parent can open an a/c in bare trust for the child (Mrs X re Miss X) and the interest can be paid gross (provided the child is a non tax payer) provided that the money came from someone other than a parent - best to keep proof of this - letter from provider of funds.

The OP should see http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/DG_10013916
and http://www.hmrc.gov.uk/tdsi/children.htm
The OP should note that whether held in a bare trust or a Junior ISA the child is absolutely entitled to income and capital at 18.

It seems to me that to save complications, the OP might be best considering £3600 in a Junior ISA now ( see suggestion re Halifax above), putting the rest in a one year bond (in bare trust) and paying the proceeds of the bond into the JISA at the end of the year?

gadgetmind

bigadaj wrote: »

But you will have an opinion

Yes, and I adjust my portfolio accordingly, but I got gilts wrong in 2011. Who knows what I'll get wrong in the future?

I know you're a tracker fan but buying uk gilts now looks crazy.

I don't see the connection. I mainly use trackers for equities, and not because I'm a fan, but because back-testing shows that this is the best long-term approach.

As for gilts, I agree totally and am now slightly negative duration. But I fully accept I could be wrong!

There is a lot to be said for keeping it simple and taking the macroeconomic guesswork out of it.