Investing a lump sum

Wendlington

Our children (aged 5 & 7) have been left £10,000 each by someone we know. How would you recommend investing it for them?

xylophone

They each have CTFs? You might consider contributing up to the full amount in the CTF year for each, then transferring them to JISA and contributing the full JISA allowance - see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/370157/ISA_xfer_EM.pdf

7.2

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

https://www.hl.co.uk/investment-services/junior-isa/ctf-transfers-to-junior-isas

The balance might be held in bare trust in say http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

for each child and added to the JISA for tax year 2016-17?

With such a long time scale, you might consider the stocks and shares option for the JISA, although you could hedge your bets by having half cash/half stocks and shares.

With regard to funds, you might perhaps look at a global investment trust?

http://www.morningstar.co.uk/UK/NEWS/119854/TOP-GLOBAL-EQUITY-INVESTMENT-TRUSTS.ASPX

"Those in favour of active management should consider top-rated global equity funds run by the likes of Sebastian Lyon, manager of the Personal Assets Trust (PNL) and Tom Slater, manager of the Scottish Mortgage Trust (SMT) – both rated Gold by Morningstar closed-end fund analysts. Also highly rated and invested in global companies are Andrew Bell’s Witan Investment Trust (WTAN), Law Debenture Trust (LWDB) and the UK’s oldest investment trust; Foreign & Colonial (FRCL). All three are rated Silver."

Suited72

Wendlington wrote: »

Our children (aged 5 & 7) have been left £10,000 each by someone we know. How would you recommend investing it for them?

Best Interest rates are 1.5%, but government inflation aims are equal to or above that.

The interest rate cannot go any higher for at least another 20 years due to problems with any increase and then servicing national debt. So the only thing you know is that investing £20000 now, it will be worth less to your children when they are 20.

You will also be investing during a time of high systemic risk. The stock markets are over valued almost everywhere.

I would advise that you chose any asset class over paper. If you are able, look at £20k towards a £60k mortgage with rent return and possible property value increase. Gold & silver in the period 2005 to 2015 for a £20000 investment would have netted your kids £70000 today. Going forward metals look like they at worst case will hold value against paper because the mining(cost) & sell price are about the same. But depending what you believe about the world currently - They perform with any war or any currency/banking problems and also during times of opulence.

The case for savings is that in 10 years you will be giving them £10600.

The case of a house in 10 years would be around £25000. That's if house prices do not increase.

Metals. Who knows.