16 year old son has £15000 to invest..

56cheffy

Lucky so and so...:D

My 16 year old son has been left some money and he wants to invest £15000.

To get maximum benefit from investing it for perhaps 5 years until he's 21 where should he put it and what could he expect to get back?

Thanks.

robnye

have a look at bonds - 1/3/5 yr, as long as total interest plus any money he might earn working is below current tax allowance level, he wont be taxed

dunstonh

if it investing and not saving, then unit trusts or investment trusts are the common method for this sort of thing. If it is saving, then savings accounts or fixed term deposits would be the better option.

dancingfairy

What about an ISA ? could have a mini cash isa and save £3000 (would earn about 6.05 % interest per annum with the best at the mo) or investing in a maxi isa in a mixture of funds? (max £7000 rate of return likely to be better over long term but more risky).

O.K First the best thing to do is probably to decide whether you want to save it (no risk of not getting money back) or invest ( more risky - depends what you invest in, shoud do better over the longer term - at least 5 years, but no guarantees).

Is he likely to need the money in the near future to buy a car/driving lessons/university fees etc or is this 'spare' money. Hopefully by answering these questions it will give you an idea what to consider.

Jonbvn

NS&I index linked savings certificates are looking pretty good ATM, with a high RPI. Invest for 3 or 5 years all tax-free.

candlestick_2

dancingfairy wrote: »

What about an ISA ? could have a mini cash isa and save £3000 (would earn about 6.05 % interest per annum with the best at the mo) or investing in a maxi isa in a mixture of funds? (max £7000 rate of return likely to be better over long term but more risky).

O.K First the best thing to do is probably to decide whether you want to save it (no risk of not getting money back) or invest ( more risky - depends what you invest in, shoud do better over the longer term - at least 5 years, but no guarantees).

Is he likely to need the money in the near future to buy a car/driving lessons/university fees etc or is this 'spare' money. Hopefully by answering these questions it will give you an idea what to consider.

Think you have to be 18 to open a ISA.

baby_boomer

16 is the age limit for an ISA. You could get the whole lot into Cash ISAs by the time he is 21 which could be a big benefit when he starts earning, assuming that the whole lot doesn't get spent on a sports car .

agal

baby_boomer wrote: »

16 is the age limit for an ISA.

Being pedantic, it's 16 for a cash mini ISA and 18 for S&S ISAs

benood

How about popping £2,800 into a stakeholder pension (if you can at 16?)- I think even if he is a non tax payer he would benefit from basic rate tax relief and he's then got 50 years for it to grow. If it grew at say 10% pa over that time it would be worth over £350,000 in the end - at 13% it would be worth getting on for £1.5m. Even at 7% it's about £100,000.

mdean

Just a thought - depending on your circs it might be better for a parent to invest it

If parents are separated and he is going to university the parent without cares savings and earnings are not assessed for student loan/ grant/ fee remission

can make a big difference

56cheffy

benood wrote: »

How about popping £2,800 into a stakeholder pension (if you can at 16?)- I think even if he is a non tax payer he would benefit from basic rate tax relief and he's then got 50 years for it to grow. If it grew at say 10% pa over that time it would be worth over £350,000 in the end - at 13% it would be worth getting on for £1.5m. Even at 7% it's about £100,000.

I like that idea...:j

Those figures you quoted...are they just for the initial investment plus the tax relief without any further monthly contributions!!!!!!!!!!!

Who do you recommend investing it with in the stakeholder?