£20.000 to invest confused

dava123

this is very confusing to me,i have £20.000 to invest for the kids future,been looking at isa etc etc,but i dont know which way to go,i have been on the net but there are so many products i just dont know were to go or set it up,advice will be so much appreciated.

colsten

How old are the kids, how many kids, how long do you want to invest the money for?

dava123

3 aged from 11 to 16,i just want to invest it until the youngest hits 21 then they can all have their share.

bowlhead99

All of them are currently the right age to qualify for a junior ISA and you can put up to £4000 into each every tax year - as we are nearly at the end of the tax year you could deposit some this month and some next month and use up two allowances with the £6667 each. However anyone over age 16 can control their own JISA and at 18 can take it out without you having a say; it would convert to a simple adult ISA at that point.

Therefore if you want to restrict access until youngest is 21 and eldest is 26, you will have to keep the account in your own name (unless you want the expense and hassle of running some sort of discretionary trust, which is inefficient for only £20k)

So, you can use your own ISA allowance for this (you have this year's allowance plus another £15k from 6th April and every year thereafter). With a lump sum and 10 year time horizon you could look at S&S ISAs - investment funds - for some of the money if not all.

You are right there are lots of products to choose from. Apart from some ISAs direct with fund managers, I use TD Direct and Youinvest which are fund platforms which let you buy a mix of different investment funds. They are both free to set up and then have a small annual percentage-based fee (Youinvest has a smaller ongoing annual fee but a small one-off charge to buy the funds you select). There are plenty of others - Charles Stanley is at the cheaper end of the scale, Hargreaves Lansdown more expensive etc etc.

If you don't want investment risk and prefer to see the value of the £20k eroded over time while it sits in cash accounts, a good start point is the Santander 1-2-3 current account which pays 3% on £20k. However it pays 0% on anything over £20k so you would have to move the interest somewhere else. Also unlike the ISA you would be paying tax at your marginal rate on the interest earned.