How to invest for a new born?

talexuser

A family member will give birth later this year, and I am toying with the idea of a present of a long term investment. My first thoughts were a lump sum of say a grand in a FTSE tracker, say Vanguard or HBSC, thinking that 16 or 18 years of stockmarket should be a reasonable start for uni fees or first car or flat.

I would appreciate advice on how you would go about this please? What are the cheapest junior ISAs for example?

xylophone

JISA can only be opened by parent or guardian but others may contribute.
https://www.gov.uk/junior-individual-savings-accounts/overview

HL offer JISA https://www.hl.co.uk/free-guides/junior-isas

atush

I agree, a JISA could be the way, and I also agree that wherever you save, it should be in equities and not cash for a newborn.

bigfreddiel

how about starting a pension - that will have 70+ years to grow and has the advantage your young recipient won't have access till retirement age - unlike a jisa where at 18 it's theirs to blowon anything they like

fj

talexuser

Thanks. Undoubtedly the pension idea would give a great return but none of us will be around to see them enjoy it

Let's hope kids are brought up not to blow all of a windfall on something totally frivolous, but I hope they enjoy life when they are young, and if you have come around to the idea to give some money away outright, then I suppose you can't really have a complaint how it is eventually spent?

innovate

talexuser wrote: »

Thanks. Undoubtedly the pension idea would give a great return but none of us will be around to see them enjoy it

Are you investing for their enjoyment, or for yours?

talexuser

innovate wrote: »

Are you investing for their enjoyment, or for yours?

You have a point, maybe both?

But by the time they retire (at 75 the way things are going?) will they enjoy it compared to a more easy time through uni or a step to a first car?

xylophone

It would be possible to do both - a young person of my acquaintance had cash/funds held in trust but also a small pension- at his majority the trust fund became his and when he became employed with a DB pension, he transferred the stakeholder to a SIPP which he will use if he becomes a higher rate tax payer.

atush

I agree that it would be nice to do both, but I would do just the savings one unless you can afford to do both.

A pension is a nice idea, but helping them thru University (instead of having to pay over 6% on student loans) or helping them with a deposit on a flat could be a more immediate help to their future.