savings and investment for a 13 year old

welshy2410

hiya. I'm new to this but I need advice.. my 13year old daughter will be getting about £2000 which has been left to her and I want to do the best, maybe a savings account that she can't touch until she.s 21 or something.. I have no idea what to do or what to look into

theoretica

If it is left to her she has a right to it at 18 unless the person leaving it said otherwise in the will. A Junior ISA would put the money away until she is 18 and be tax free.

xylophone

Try http://www.halifax.co.uk/isas/ if you yourself have/are prepared to open an ISA with Halifax.
https://www.gov.uk/junior-individual-savings-accounts/overview

welshy2410

Thankyou. we are aware that she can have her money when she reaches 18 but think wait a few more years as she will get a better return

xylophone

she can have her money when she reaches 18

The point is that whether you hold the money in bare trust for her until she reaches 18 or the money goes into JISA, she has the absolute legal right,unless the will says otherwise, to access to capital and income at age 18. This applies whether the money is in some form of cash account or in stocks and shares.

If she will need the money at 18 (for University, for example) then using some form of deposit account is probably wise, because 5 years is rather a short period for market investment which should be considered a long term strategy - I usually think of 10 years+.

The interest rate offered on the Halifax JISA is outstanding for a cash based account.

You could consider a stocks and shares based JISA.

Otherwise, you could hold any BS account that permitted a bare trust to be used - assuming your child is not a taxpayer you would complete R85 on her behalf but after she reached 16, the R85 would need to be rescinded and any overpaid tax reclaimed by you until she reached 18.

You could also consider investing in eg an investment trust in bare trust - example here http://www.sit.co.uk/products/investing_for_children/features/questions_and_answers/

But all in all, it seems far simpler to use the JISA whether in cash, stocks and shares or a combination of the two?

She is not compelled to take out the money when she turns 18 - the JISA would convert to ISA.

atush

I would consider a S&S JISA as described above.