Where to put £10k for a child?

Jeremyclark

Children age 6 and 8 have been gifted £10k each, they have CTF's and a savings account each, any suggestions on where to invest this would be appreciated thanks. I've just read about premium bonds on here and they don't look that great!

atush

At that age I would put the bulk of it in a JISA once you have transferred the CTF to one). And I would out it in equities, not cash.

Open a savbings acct for them with a small amt of it, and have them add to it with xmas and Bday money.

Jeremyclark

Thanks for the reply atush, children already have a savings account we save monthly for tyem in addition to adding xmas, bday money etc..

Junior ISA was on my mind, will wait for them then thanks

Jeremyclark

Btw why do you say equities? I have about £50k in a cash isa have always been nervous about equities so would be interested in another point of view thanks

jimjames

Jeremyclark wrote: »

Btw why do you say equities? I have about £50k in a cash isa have always been nervous about equities so would be interested in another point of view thanks

Long term equities are far more likely to beat inflation than cash is. Holding too much cash and no equities is a risk too but one less visible.

If you don't need the money for 10 years plus then what the value fluctuates by on a specific day is pretty irrelevant.

At the moment you can do far better than a cash ISA. If you're prepared to do a bit of work to setup accounts you can get from 3-5%, admittedly it's taxed but that still beats all instant ISA rates.

xylophone

Each child has a CTF at the moment with a CTF subscription year which runs from birthday to birthday (the JISA year, like an ISA, runs from tax year to tax year).

Assuming that you have not filled the CTF in this year, you could top it up to the limit of £4000.

After it becomes possible to transfer to the JISA (after April 6?), you could do so, and then presumably - (this should be clarified), top up to the JISA limit for the tax year 2015-16 (£4080).

The JISA can be split between cash and stocks and shares so that you can hedge your bets if you wish.

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

In the meantime, you can hold the cash in bare trust for your children in a building society account, moving to JISA as and when.

http://www.moneysavingexpert.com/savings/child-savings-tax-free

http://www.thisismoney.co.uk/money/investing/article-1587994/Junior-Isa-Child-Trust-Fund-How-save-invest-children.html

You mention that the children have savings accounts for which you provide the capital - you should be aware of the "£100 rule" for gifts from parents to their minor unmarried children - this does not apply to CTF/JISA.

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/families/babsi.htm

For this reason, apart from in CTF/JISA, it is simpler to keep gifts from parents separate from gifts from other people.