Where to invest inheritance my kids have been left

Pokerchick

Hi

My two daughters (age 9 and 6) have been left a sum of money (£10k each) from a Great Aunty who recently passed away. The money is currently with the solicitors and me and my husband have been made Trustees. Where would be the best place to put this to get the most interest? I've had a quick look but feel a little overwhelmed! Any help would be most appreciated.

Many thanks

DiggerUK

The only place to get interest is in a savings account. Savings rates, even long term, don't get to preserve what you lose against inflation.
Equity investment schemes such as ISA's carry unknown risks going forward.
In such a case I would buy them *UK gold coins, they will not become valueless, and looking at 10+ years forward, it is a good time frame to allow you to ride out any ups and downs in the price of gold. You will be relying on capital growth only to increase their value.
(*UK legal tender gold coins are free of VAT, and don't attract any taxes)

If you go with my suggestion I would recommend you buy something like a 1oz gold Britannia coin per month to smooth out price fluctuations , and use any left over change to take them out for a weekend. They are a bit meaty at the moment, £1,000+ each.

Here is a site I use and recommend..._ https://atkinsonsbullion.com/

xylophone

Do they each have a Child Trust Fund?

If so, 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

If above is available to you, you could virtually the whole of each child's inheritance into a JISA.

Best cash JISA is currently available from Coventry BS.

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

Otherwise, you can hold the inheritance for each child in an account in bare trust and gradually move into JISA.

Example

https://www.bathbuildingsociety.co.uk/savings/personal-savings-and-investments/supersaver

DrSyn

You mention interest, so you are thinking of the best savings accounts, have a look here:-

https://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-children-s-accounts.html

https://www.moneysavingexpert.com/savings/

Anything to do with money involves risk. Its just the type and size of the risk that varies.

Placing money in a bank or building society covered by the FSCS in relatively low risk. You expect at lest to withdraw the amount you deposited. The risk in this case is that inflation, may be such that at the end of 11 or 12 years the buying power of that money is much reduced.

For a time frame of 10 years or more, I would be thinking of investing at least some of the money. The risk here is that you will get back less than you put in. But the money stand a good chance of keeping up with inflation.

If you do think you might wish to invest part of the money, I suggest look at the following first:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

Good luck whatever you decide to do!

TotallyBroke

Pokerchick wrote: »

Hi

My two daughters (age 9 and 6) have been left a sum of money (£10k each) from a Great Aunty who recently passed away. The money is currently with the solicitors and me and my husband have been made Trustees. Where would be the best place to put this to get the most interest? I've had a quick look but feel a little overwhelmed! Any help would be most appreciated.

Many thanks

I'm in a similar situation with my son and an inheritance.
The will for us said the money had to be locked away until 18 so 5.5 years.. It's so confusing isn't it

enthusiasticsaver

3.6% on a junior isa with Coventry BS.

Malthusian

DiggerUK wrote: »

In such a case I would buy them *UK gold coins, they will not become valueless, and looking at 10+ years forward, it is a good time frame to allow you to ride out any ups and downs in the price of gold. You will be relying on capital growth only to increase their value.

Terrible advice. The OP has a statutory duty to invest their children's money as a prudent person of business would and what you are suggesting is unlawful.

Given there is a 9- and 12-year timeframe for investment, a simple globally diversified multi-asset fund would be more appropriate as the trustees appear to be inexperienced investors.

Junior ISAs are worth considering but the only real benefit is the fact the money will become adult ISAs at age 18. It may be a waste of their Junior ISA allowances given that, unless the children are stinking rich already, they are unlikely to pay tax on the money if it is held in unwrapped bare trust.

TotallyBroke wrote:

I'm in a similar situation with my son and an inheritance.
The will for us said the money had to be locked away until 18 so 5.5 years.. It's so confusing isn't it

5.5 years is where it gets tricky. It is too long to dump all the money in cash, but it is perfectly possible for diversified stockmarket investment to produce a loss over that timeframe, if you are very unfortunate with timing. Although even if you are unfortunate with timing, it can be expected to outperform cash if he waits for a few more years. When is he likely to want to spend the money?

As a near-teenager it would be sensible to at least attempt to involve him in the discussion - that will a) give you a better idea of whether he will want to spend the lot at 18 (i.e. how risky stockmarket investment is) and making it less likely that he will want to blow the lot at 18.

Pokerchick

Thank you all for the advice you have given. It is very true to say we are inexperienced investors! It all baffles me I have to admit.

I have had a look at the Coventry BS JISA and I can see the limit is £4,368 so would I put the rest into a bank savings account? I'm not sure what is meant by bare trust.

My one daughter has a CTF which we opened with the £250 given back in 2010 and not done anything with. The other one did not receive this.

Again thanks for the advice but can I ask for any responses to be explained in simple terms for a simple me

xylophone

My one daughter has a CTF which we opened with the £250 given back in 2010 and not done anything with.

Read the first link in my post above - potentially almost the whole of the inheritance for this child could be in the Coventry JISA in fairly short order.

You could hold the balance in any child savings account (on which you would be the signatory, holding the funds as Bare Trustee for your child) - you could move into the JISA in the tax year 20/21.

As bare Trustee, you are holding the funds for your child who has the absolute right to access and control at age 18.

For the second child, open and fill the JISA and hold the balance in a child saver as above, to be moved into JISA over the next couple of tax years.

xylophone

See also

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

Alz1986

Invest into a diversified fund. Vanguard, Legal & General, Blackrock are good places to look.

DiggerUK wrote: »

If you go with my suggestion I would recommend you buy something like a 1oz gold Britannia coin per month to smooth out price fluctuations , and use any left over change to take them out for a weekend. They are a bit meaty at the moment, £1,000+ each.

Not sure if you should be spending someone else's inheritance gift to your children. Days out should be done at your own expense for your children.