Investing a lump sum for children

CDW

My sons have been left £10000 each by a grandparent. This money is currently sat in a savings account not doing much. They are 9 and 7. I feel I have time to make this money do more for them- but am not used to investing in shares or other and would like advice as to recommended ways of best investing this money for them. Nervous of the junior ISA as not sure I want it to go straight to them at 18, but rather be a pot of money to help towards a house or uni as and handed over when best needed. Thanks.

cloud_dog

This may be slightly more involved than at first sight, even though I am pro investments, especially in these times of low savings return.

If you had gifted the £10k to your children then your proposal wouldn't cause me any concern or second thought. The fact that this is a gift from the grandmother to the children means you need to ensure you undertake appropriate 'care' of the gift.

What if in nine years time the 9y.o. received £9k?

What is a reasonable course of action for a child's monetary inheritance? It is situations like this where I feel quite uncomfortable offering opinions.

CDW wrote:

Nervous of the junior ISA as not sure I want it to go straight to them at 18, but rather be a pot of money to help towards a house or uni as and handed over when best needed.

Not sure you have a choice, unless the grandmothers instructions dictated otherwise, i.e. in trust for the benefit of the child(ren); as opposed to being left to the child(ren).

xylophone

If the money has been left to your children without contingency then you can only hold it as bare trustee for them and they have the absolute legal right to access and control at age 18 (16 in Scotland).

You say that it is "in a savings account" - a savings account in whose name?

If in your name and you are only bare trustee as above, this is incorrect and the money should be transferred into an account in the name of each child individually.

If each child has a CTF, it would be possible to fill the CTF with the "CTF year" allowance, transfer the CTF to JISA and then fill the current tax year JISA allowance.

The balance could be held for each child in a child savings account and then transferred into the JISA on April 6 next year.


See https://www.skintedmintedmum.co.uk/minted-blog/how-to-transfer-a-child-trust-fund-ctf-to-jisa-with-a-double-scoop-of-tax-allowance.html

Within a JISA there is the option of holding cash, shares or cash and shares.

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

CDW

The money is in a saving account in their own name.
Thanks for responses so far

Keep_pedalling

CDW wrote: »

My sons have been left £10000 each by a grandparent. This money is currently sat in a savings account not doing much. They are 9 and 7. I feel I have time to make this money do more for them- but am not used to investing in shares or other and would like advice as to recommended ways of best investing this money for them. Nervous of the junior ISA as not sure I want it to go straight to them at 18, but rather be a pot of money to help towards a house or uni as and handed over when best needed. Thanks.

You don’t actually have a say on whether they get access to the money at 18 or not, that have the right to claim their inheritance once they reach 18.