Childrens' savings/investments/pensions

anandp

Reaper wrote: »

ValiantSon is correct

Going back to the original question for my son I have 3 types of investments.

* Child Investment Trust with some lump sum money he was given at birth by relatives. This is a Bare Trust. We don't add to it.
* Junior ISA which we add to each year
* Child Pension which we add to for now, but I'm not sure for how long.

This gives plenty of flexibility and hopefully covers all eventualities. I would not suggest doing the pension instead of the others, I would only suggest doing it if you have spare funds after sorting out the shorter term investments.

This gets to a point I'm struggling to get some informed opinion on. My parents want to put some money into a monthly 'plan' for their grandchild. I'd want this in stocks and shares in some way, but am not sure if a JISA is better for this purpose or if a children's savings plan with the likes of Baillie Gifford might be better?

aj23_2

ValiantSon wrote: »

Any time that you wish to apologise for your rude and ignorant behaviour is fine by me.

You're the one who was impudent from your very first reply to me on a different thread. You are still replying to me. Why is that? Seriously, this is bordering on obsessive. I have never made a first reply to you on a thread, it's always you disrespectfully quoting me. You're the one who has called me names.

Your quoting me in the latest reply has nothing to do with you. If you've chosen to interpret it as being to do with you, that's up to you. But if the shoe fits, wear it. :beer:

ValiantSon

aj23 wrote: »

You're the one who was impudent from your very first reply to me on a different thread. You are still replying to me. Why is that? Seriously, this is bordering on obsessive. I have never made a first reply to you on a thread, it's always you disrespectfully quoting me. You're the one who has called me names.

Your quoting me in the latest reply has nothing to do with you. If you've chosen to interpret it as being to do with you, that's up to you. But if the shoe fits, wear it. :beer:

I did post a fuller reply, but then thought better of it. Your behaviour speaks volumes on its own.

ValiantSon

anandp wrote: »

This gets to a point I'm struggling to get some informed opinion on. My parents want to put some money into a monthly 'plan' for their grandchild. I'd want this in stocks and shares in some way, but am not sure if a JISA is better for this purpose or if a children's savings plan with the likes of Baillie Gifford might be better?

The Baillie Gifford Children's Savings Plan benefits from no tax privileges. While it is unlikely that the sums invested would incur tax in the short term, capital gains may be an issue at a later point. By contrast, a JISA would give you full tax advantages, which continue throughout the child's life, as the JISA becomes an ISA at 18. The result, therefore is that the money remains tax free for life. A JISA will, however, have on going costs (platform and OCF), whereas the Baillie Gifford option does not, but they do charge £22 for each withdrawal, which could be a big disincentive, depending on how you used the plan.

The choice of investments is extremly limited with Baillie Gifford. By contrast a JISA gives you access to a wide range of investment options depending on the provider chosen.

Personally, I think the Baillie Gifford option is a poor choice compared to the flexibility and tax advantages of the JISA.

cloud_dog

anandp wrote: »

This gets to a point I'm struggling to get some informed opinion on. My parents want to put some money into a monthly 'plan' for their grandchild. I'd want this in stocks and shares in some way, but am not sure if a JISA is better for this purpose or if a children's savings plan with the likes of Baillie Gifford might be better?

As mentioned above there are the tax advantages but there is also the ability to roll it into an adult ISA at 18 (retaining all the tax benefits), and whilst this perhaps isn't relevat to your query it removes the requirement to retain proof of where the money originated from, with regard to parents contributions and the £100 interest (income) tax limitation.

xylophone

My parents want to put some money into a monthly 'plan' for their grandchild. I'd want this in stocks and shares in some way, but am not sure if a JISA is better for this purpose or if a children's savings plan with the likes of Baillie Gifford might be better?

You decided against BG back in 2013?

https://forums.moneysavingexpert.com/discussion/comment/62129835#Comment_62129835

You mention your children's CTFs - they have now been transferred into JISAs?

How old are the children now?

Alexland

ValiantSon wrote: »

A JISA will, however, have on going costs (platform and OCF), whereas the Baillie Gifford option does not, but they do charge £22 for each withdrawal, which could be a big disincentive, depending on how you used the plan.

The Baillie Gifford trusts have ongoing management costs so it's really only the platform cost you are saving. Still you are paying the stamp duty at the start and the withdrawal fee at the end.

But you could do a lot worse with saving £25 per month elsewhere so it's definitely on the list of good options.

ValiantSon

Alexland wrote: »

The Baillie Gifford plan trusts have ongoing management costs so it's really only the platform cost you are saving. Still you are paying the stamp duty at the start and the withdrawal fee at the end.

Looking at their website and brochure they say, "No initial or annual plan charges" (website); "— There is no initial charge or annual management charge for the Children’s Savings Plan
— There is a charge of £22 for each withdrawal from the plan
— All switches between investment trusts within any one Children’s Savings Plan are free
— Other charges include the dealing price spread* and Government stamp duty of 0.5% on
purchases (including all switches) and certain transfers" (brochure).

https://www.bailliegifford.com/en/uk/individual-investors/how-to-invest/childrens-savings-plan/

https://www.bailliegifford.com/en/uk/individual-investors/literature-library/individualintermediary-non-fund/investment-trust/childrens-savings-plan-application-pack/

Alexland

Yes but the trusts themselves have a management fee. Unlike an OEIC an IT or ETF cannot issue fee free units.

Reaper

Alexland wrote: »

Yes but the trusts themselves have a management fee. Unlike an OEIC an IT or ETF cannot issue fee free units.

There are fund management charges of course as there are for all types of active funds. The aren't particularly high though. For example the flagship Scottish Mortgage fund has ongoing charges of 0.44%