Advice Please - 18k lump sum

lmcg

I have been saving for my son since he was born, he is turning 18 this year and will be receiving around £18,000. His goal is to use it for a house deposit when that time comes I would think at least 10years away.

We are thinking of starting a LISA but that only takes care of £4,000. Perhaps put the rest away in a fixed rate for 1yr then repeat that process, putting a further 4K. And so on until all the funds are all in the LISA.

Is this a good idea? Or can you give us an suggestions?

Alexland

The main problem I see is how do you know 10 years in advance that the property he will want to buy will be within the £450k price cap? Our friend inflation is likely to cause property prices to rise over that period and there is no indication that the government will increase the cap.

If you did decide to proceed then a S&S LISA is more likely to maintain spending power than the low interest rates on a Cash LISA however it would involve some risk.

Alex

xylophone

Do you mean that you have been saving in your own name since your son was born and that you now intend to make him a gift of £18,000?

Or do you mean that you have been paying money into your son's account which you held in bare trust for him and he is about to become absolutely entitled to access and control?

lmcg

Do you mean that you have been saving in your own name since your son was born and that you now intend to make him a gift of £18,000?

The were two Scottish Friendly Child saving Bonds.

I am at a loss as to what to do with the money now, one is maturing at the end of next month and the other on this birthday later this year.

Alexland

lmcg wrote: »

I am at a loss as to what to do with the money now, one is maturing at the end of next month and the other on this birthday later this year.

So what is your son likely to be doing for the next 10 years? I assume he is not going to university or the money would be needed now. Could some of it be used for some other professional study to improve his future career prospects? Could he realistically build sufficient income and want to buy a property in his early to mid 20s?

Alex

xylophone

https://www.scottishfriendly.co.uk/tax-free-investments/child-bond

It appears that the maturity proceeds are due to your son so that either the cheque will be drawn in his name or paid to a bank account in his name.

He cannot open a LISA until he is 18.

Does he have a JISA? Has it been fully funded for the current tax year?

If not, he might be able to open a JISA and pay in the maximum and the same after 5 April assuming that his birthday has not yet happened.

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

He might open an under 19s account with TSB and hold £2500 in that.

Once he becomes 18 there are fixed rates available.

https://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

Zero_Sum

If you're going down the LISA route, do it before April then you can stick another £4k in April