Splitting between junior cash ISA and junior investment ISA - what proportion?

IceTry

Me again:wave:! I was wondering people's thoughts on the above.

My son, aged 14 has a Child Trust Investment Fund worth £24,000 as of today (his grandmother has paid in £15,000 in total since he was born). It will mature in 3 1/2 years. I want to start moving at least a proportion of the funds into cash, in case anything bad happens on the stock market either now - or suddenly before maturation:eek:! Though the fund has done not too badly in recent years. (Its with OneFamily Investments).

So, I want to protect its current cash value, but also some wriggle room for (hopefully) some investment growth.

Do people think I should split it 50:50 at this stage? Say 50% junior cash ISA with Nationwide and then 50% junior investment ISA elsewhere? Or 60:40, 70:30, etc etc.

I realise any answers will be people's opinion, and I will have to make up my own mind! But at the moment I'm like a rabbit caught in headlights:shocked:!

Mogley

I would work out how much you want your son to have easy access to at 18. When you know that figure, transfer that into a cash JISA as soon as you're ready.


The remainder I would transfer into a S&S JISA. It is usually designed to transfer to a S&S ISA when your dependant turns 18. Advise him of the benefits of investment growth and hopefully he'll leave the money invested. But it will ultimately be up to him what he wants to do with his money.

Malthusian

Is he likely to want to spend all the money as soon as he gains control over it?

IceTry

Thank you both. I was thinking say £15,000 in Nationwide junior cash ISA. Then £8,000 in junior investment ISA - to see what happens with that over the next 3 years ... By the way, do people know of any junior investment funds that are managed by a good company? I don't want to make stocks and share decisions myself, I haven't got time and I haven't got a clue. I could, of course, leave £8,000 with One Family Junior Invesment ISA (they don't do a cash ISA).

Malthusian, I hope he doesn't spend all the money as soon as he gets it! It may help in the short-term with college, or a bit of travel, starting out, or put some money aside until he's older. He says he wants to save most of it, and I am hoping he is sensible enough, but you never know ! He may even take me away for a short holiday ...

Mogley

That sounds like a plan. In the end it's what you feel most comfortable doing.
There are a number of S&S JISA providers. There are companies like Legal and General or Standard life that offer a small range of funds under the JISA wrapper. You will have higher than average charges for using these companies.

In your situation I would be tempted to use an online fund platform like Hargreaves Lansdown (HL) (take a look) for the stocks and shares portion. Invest in one multi asset fund like Vanguard Lifestrategy 100 ACC (100% equity) or similar. This is a simple approach and cheaper than using One Family who charge 1.5% fee plus 0.2% fund AMC. You would pay 0.45% for HL plus the AMC of the fund you choose (the vanguard I mentioned is 0.22%).

IceTry

By my last post, I'd sort of answered my own question.

However, I did have concerns about OneFamily's charge for investments fund at 1.5%, though a reasonable charge for managing a fund seems fair enough. Interestingly, I have also been recommended Hargreaves by somebody else, so I will investigate that, thank you very much Mogley for going into it in more detail, which makes alot more sense to me.

When I checked my son's account today, out of the blue, I was very surprised at how it had grown recently - presumably stocks and shares have done very well in the past few years. Before that the growth was modest, to say the least.

However, as my son approaches 15 I would like to get things a bit less reliant on "the markets", and I am feeling a bit jittery about what may or may not happen generally. I should add I am a pessimist by nature - or experience - I'm not sure:think:. I know stocks and shares are generally an "up" thing, but short-term I'm not so sure. There was an article in the Telegraph today about how the major central banks haven't got a clue what is happening in an uncertain world ...

xylophone

You cannot have both a CTF and a JISA.

Only a JISA can be split between cash and stocks and shares.

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

IceTry

Sorry - if I didn't make it clear I meant I would transfer the WHOLE value of son's One Family Child Trust Fund to ISAs - split between ONE Junior cash ISA and ONE Junior Investment ISA, which I believe is the max.

Eco_Miser

Your son says he wants to save most of it, sounds sensible, so why don't you ask him how he'd like it split between S&S and cash? And maybe let him do the research and choose what to invest the S&S part in?

Good place to start the research is Monevator

IceTry

Appreciate your response, EcoMiser, but I don't want to talk about the money too much. He is aware of it vaguely, but I don't want it to turn his head in case he gets a bit over-excited and starts planning spending now and so on! I think I'd like him to focus on here and now. Perhaps when he is about 17 and more mature though, it might be good idea as you say to get into specifics of planning ahead though,...

xylophone

You could also look at Charles Stanley Direct for the Stocks and shares JISA.

https://www.charles-stanley-direct.co.uk/Our_Services/JISA/?utm_source=adwords&utm_medium=cpc&utm_campaign=CSD_Brand&gclid=CI2g0r7g19QCFckV0wodB6gJMw

https://www.gov.uk/government/publications/isa-manager-bulletin-65/guidance-transfer-of-a-child-trust-fund-to-a-junior-isa

It would make life easier to realise cash in the current CTF and arrange for the money to be transferred to a cash provider initially?

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

Once this was accomplished, the money would be earning interest while you make up your mind about the stocks and shares provider.

https://www.trustnet.com/News/668034/the-five-top-performing-multi-asset-funds-that-arent-charging-you-over-the-odds

Above might be worth a look. You would choose "Acc" units.