Junior Stocks & Shares ISAs

Camzi

I have read a previous thread about this but it didn't answer my particular questions so apologies if this is repeating.  I want to invest in a stocks and shares ISA for my 2 children (ages 12 and 13) and have £1k for each of them to start.  I'm only able to add about £10 per month to this.  I've been onto comparison websites but frankly get baffled by the costs and what they mean and I don't want their small investments to get sucked up with costs.  Also, although they would be entitled to take the money at 18, as it stands they both want to continue to save it - can you transfer the ISA at 18 to an adult one without incurring losses?  What I mean is, if there's a market crash on their 18th birthdays, will they have to suck up losses and cash it in when ordinarily in a crash, you would just sit on your investments and wait for recovery?  Ideally I would want to keep this running until they're at least well into their 20s (when they can take over the contributions!!).  All I can find in my research is that they can only have a junior ISA and then it 'expires' at 18 with nothing about keeping it going.

I don't want to take out an ISA for them in mine or my husband's name either.

Hope this makes sense!  Thanks in advance!

cloud_dog

Ignoring the 'who do I use' for the moment.

JISA will automatically convert to a adult ISA at 18.

Whether this conversion coincides with a market correction and means the value of the investments will be less is an unknown, and if you must have access to the 'most' amount of money at 18 then you need to be life-styling the investment in line with the approach of age 18.  Usually this means moving investments from a higher equity exposure in to a lower equity / higher bond exposure.

What you Camzi said:

 Ideally I would want to keep this running until they're at least well into their 20s (when they can take over the contributions!!).  

What you would like to do, is irrelevant.  They will be responsible for their own monies at age 18 and can do as they please.  If they were to listen to your sage advice then they may choose to continue the investments/contributions but, they may not.

Given that the time frames are 5 or just over 5 years, I might be tempted to simply put the money in to a NS&I JISA savings account paying 3.25% interest.  This goes against my grain as I feel it is very important for youngsters today to gain an understanding of investments and the risk/reward associated with it, and begin to understand how time can reduce risk, and where time (the lack of it) outweighs the possible value of investment returns.

xylophone

I want to invest in a stocks and shares ISA for my 2 children (ages 12 and 13) 

Born 2007/2008/

Do they already have a CTF? They can't have both.

Anonymous101

I think Cloud_dog is pretty spot on with his above post. Trying to time the maximum return for 5 years time is pretty limiting in terms of your investment choice. Personally instead I'd hope to teach my children about investments and how the stock market works, this could be a very good tool when it comes to that. As I think I said on the other thread, as our child is very young we have a strategy of saving their money (gifts etc) in their own JISA until they are able to choose for themselves. We also invest separately in what we call a "child fund" within our own ISA's instead of giving them the money now. Also this works well in that we may yet have more children so the child fund can be split out however we see fit when the time comes.

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Camzi

xylophone said:

I want to invest in a stocks and shares ISA for my 2 children (ages 12 and 13) 

Born 2007/2008/

Do they already have a CTF? They can't have both.

Yes, they do!  Ignorant parent that I am, I hadn't thought about that.  I guess that answers that!  I'm going to look into re-contributing to this but possibly put some in a cash ISA/NS&I to negate some market losses should they change their minds from wanting to continue these savings at 18. 

Thank you to everyone for your advice.

xylophone

You might wish to look into transferring the CTF to JISA.