Looking for advice - guidance

ConfusedMom

Hi All


My daughter (17years old) has just received a lump sum from her deceased father’s estate. I am looking into an ISA but would likesuggestions/help on what would be the best route to either invest or save themoney for her future. She is currently astudent and is looking to go to university in the future.



Many thanksfor your help!

eskbanker

To help narrow down the options, how much money are we talking about, when is she likely to require access (uni, house deposit, retirement?) and what is her attitude to risk (the best returns have the higher risks)?

ConfusedMom

Approx £15K. She would like to split it so could access some as and when required. £10k in longterm investment. £5k in accessible funds. I would imagine due to the circumstances of the monies that low risk would be advisable. Thank you for your response!

innovate

How long is long term? 5 years? 10 years? Longer? shorter?

ConfusedMom

5 years to start then maybe look at longer term after that.

xylophone

If she has a year to go to her majority, then a Halifax JISA (which would pay 6% and which she can open on line) , would take up to £4000 in this tax year.https://apply.halifax-online.co.uk/personal/a/apply_savings/juniorisabelow18

https://www.gov.uk/junior-individual-savings-accounts/overview

For the balance, five years is still a short time to consider stocks and shares?

Might a two year fixed rate bond with KRBS fit the bill? http://www.krbs.com/products/savings-and-isas/bonds/fixed-rate-bonds/

Assuming that she is eligible, she should complete an R85.

innovate

For as long as she is 17, she would get 6% AER in a Halifax JISA on up to £4K. http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/
She can access JISA money when she is 18.

She is also entitled to an adult cash ISA now, alongside the JISA. This can take up to £15,000 come July 1. There are some multiple-year fixed deals, the best one being a 5 year 3.75% one at a credit union:
http://www.dotcu.org.uk/creditunion/savings/isa.html

Once she is 18, she can also have an S&S ISA which could be appropriate for the 5+ years investment. As she is new to investments, and as you might not know much more about investments as she does, you should both do some reading. Start here: http://monevator.com/category/investing/. Once you have digested this, you should be able to select a fund or two, and a platform for an S&S ISA.

For her instant access money, there is a huge amount of savings accounts that pay literally no interest. Once she is 18, she can apply for current accounts that do pay interest (e.g. TSB Plus, Nationwide FlexDirect etc) - though whether she will be accepted as a student is uncertain. She can apply for a Santander 123 Mini account now, which looks a nice account until she is 18. http://www.santander.co.uk/csgs/Satellite?c=Page&canal=CABBEYCOM&cid=1210609166115&empr=Abbeycfefom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateW2. Santander probably look to convert this into a 'proper' 123 once she is 18, but this might not make sense since that account costs £2 a month.

As your daughter's income is likely to be less than the personal allowance, she should get any interest paid gross. But she needs to confirm this with the bank(s) and possibly will have to fill in an R85.
http://www.hmrc.gov.uk/forms/r85.pdf