S&s jisa

fiisch

Firstly, my apologies as there's already a few recent threads floating around this forum, but I didn't want to hijack anyone else's thread as I think I already have a clear idea on what I want to do, but wanted to understand a bit more about the S&S JISA in comparison to the adult equivalent.

My daughter is one year old (turned 1 today in fact!) and currently has a Halifax cash JISA which if memory serves pays her 3% interest. We currently pay a meagre £25 / month, but she gets extras at birthday/Christmas. I think she will have around £500 in there (the account was opened two weeks after she was born so I'm expecting the annual statement through shortly).

In the new tax year, I am intending to open a S&S ISA through Vanguard (VLS60) to start our long-term savings fund, and it's got me thinking that with the timescales involved, maybe I should do the same for my daughter, especially as she now meets the minimum lump pay-in of £500 - certainly, I am not yet in a position to contribute £100 / month?

The intention for the money is to give her a cash lump sum aged 18 which will help with the rising cost of university/getting on the housing ladder etc., accepting that she will ultimately be able to do whatever she likes! (Hopefully, I'll have taught her about the excitement of investing by then!).

What I'd like to understand is:

• Is Vanguard an equally suitable S&S JISA for children as it is for adults?
• Would you consider a more equities based fund (VLS80; VLS100?) for someone with at least 17 years to grow the pot?
• Can I simply transfer the Halifax JISA to a Vanguard S&S JISA as I would an adults ISA?
• What should the strategy be as she nears 18? Should I start start moving money into bonds/lower risk funds to guard against significant dips just before she is 18?
  

Would be very interested to hear any fellow saver's strategy for investing in S&S JISA's for their children. Thank you.

Zorillo

My twins are approaching 1 and are both invested in Vanguard 100, and will be for at least 15 years.

I think the answer to your first three questions are 'yes'.

I haven't got an answer to the fourth question yet, in my case I think it will depend on what type of teenagers we've raised. If they're likely to want the money as soon as they hit maturity then de-risking it would be sensible. I rather hope they won't want it immediately.

xylophone

https://www.vanguardinvestor.co.uk/content/documents/legal/key-features-isa-gia.pdf


Transfers of ISAs and Junior ISAs
If you have previously opened any ISAs or Junior ISAs with other ISA managers, you can ask
for these to be transferred to Vanguard without losing any accrued tax benefits. Please note
that the value of an ISA opened during the current tax year must be transferred in full, and
Junior ISAs must always be fully transferred (whenever opened).

ValiantSon

fiisch wrote: »

Firstly, my apologies as there's already a few recent threads floating around this forum, but I didn't want to hijack anyone else's thread as I think I already have a clear idea on what I want to do, but wanted to understand a bit more about the S&S JISA in comparison to the adult equivalent.

My daughter is one year old (turned 1 today in fact!) and currently has a Halifax cash JISA which if memory serves pays her 3% interest. We currently pay a meagre £25 / month, but she gets extras at birthday/Christmas. I think she will have around £500 in there (the account was opened two weeks after she was born so I'm expecting the annual statement through shortly).

In the new tax year, I am intending to open a S&S ISA through Vanguard (VLS60) to start our long-term savings fund, and it's got me thinking that with the timescales involved, maybe I should do the same for my daughter, especially as she now meets the minimum lump pay-in of £500 - certainly, I am not yet in a position to contribute £100 / month?

You are quite right that making a £500 lump sum investment allows you to open the account and make further investments of whatever value you wish. Not being able to commit to £100 per month, this is a sensible move.

fiisch wrote: »

The intention for the money is to give her a cash lump sum aged 18 which will help with the rising cost of university/getting on the housing ladder etc., accepting that she will ultimately be able to do whatever she likes! (Hopefully, I'll have taught her about the excitement of investing by then!).

An admirable aim, and I do think that S&S investments is a better way to go than savings.

fiisch wrote: »

What I'd like to understand is:

• Is Vanguard an equally suitable S&S JISA for children as it is for adults?

Yes. Aside from the different allowances, they operate the same way. Vanguard funds are a good option requiring little management by you.

fiisch wrote: »

• Would you consider a more equities based fund (VLS80; VLS100?) for someone with at least 17 years to grow the pot?

Personally, I would recommend a higher equities value than VLS60. The timeframe is suitably long and you could reasonably expect better growth. To protect that growth as she gets nearer to 18, you could change the mix by selling some of the VLS80 or VLS100 and buying a fund with more bonds, so as to protect the investment a little better. Perhaps around 13-14 this would be a wise move.

fiisch wrote: »

• Can I simply transfer the Halifax JISA to a Vanguard S&S JISA as I would an adults ISA?

Yes. Vanguard accept transfers in, so it is a straightforward process. On their JISA page there is a very clear "Transfer" button, and they also have a helpful guide to the process (linked below):

https://www.vanguardinvestor.co.uk/investing-explained/transfer-an-account

fiisch wrote: »

• What should the strategy be as she nears 18? Should I start start moving money into bonds/lower risk funds to guard against significant dips just before she is 18?
  

As above, I would start to make that transition at around five years out from the target date, so around 13/14 years old.

fiisch wrote: »

Would be very interested to hear any fellow saver's strategy for investing in S&S JISA's for their children. Thank you.

Sadly I can't comment on this aspect, but from a general investing perspective, I think you are on the right lines.

Best wishes.

Alexland

If you want to go with Vanguard and the money is likely to be withdrawn at 18 then consider using the Vanguard Target Retirement 2035 fund which is similar to a fixed allocation VLS but reduces the stock market exposure and currency risk as the withdrawal date approaches. It is currently 72% equities and would reduce down to 50% by the target date. It has global assets but uses some currency hedging to reduce exchange rate risk.

However there is an argument that 72% is too conservative for the investment timeframe (and bonds are looking expensive at the moment) but it depends on your volatility tollerence to seeing losses during the journey.

My tiny son's JISA is with Orbis Access in their in the Global Equity fund (which is 100% shares) having switched from the Balanced fund (80% shares but 20% market hedged) to take advantage of the upside after the recent market correction. I expect to move it to a target date fund manager such as VTR2035 when he is around 10 (depending on market conditions - allowing any crashes to recover first) as it becomes a medium term investment.

Alex

fiisch

Perfect - thanks all for the helpful replies.

Interesting point re.: Target Retirement 2035 Fund, which will do the heavy-lifting so I needn't overly worry about de-risking as the withdrawal (or hopefully reinvesting!) date arrives. Will mull over this vs VLS100 and make the transfer once balance with Halifax is confirmed in the next couple of weeks. Of course, if I do with VLS100 it will make an interesting comparison to our own investments (VLS60).

Thanks again.