Savings plan for new born

StevieMic68

My wife is about to give birth to our first child. I would like to open a savings plan/account for our daughter for when she's 18. Any advice on which is the best at the moment?

kinger101

Congratulations.

A junior ISA would be the best home, as you can shelter the money from tax.  Given the 18 year timeframe, I'd go for a stocks and shares ISA rather than cash, perhaps in a world index tracker initially.  Fidelity are reasonably low cost and have a decent range of passive funds.

If you pick the JISA option, you have accept the money is theirs, to spend how they see fit, as soon as they turn 18.  If they prefer an all-body tattoo and a motorbike to a solid education or house deposit, nothing you can do about it.

xylophone

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

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

george4064

kinger101 said:

Congratulations.

A junior ISA would be the best home, as you can shelter the money from tax.  Given the 18 year timeframe, I'd go for a stocks and shares ISA rather than cash, perhaps in a world index tracker initially.  Fidelity are reasonably low cost and have a decent range of passive funds.

If you pick the JISA option, you have accept the money is theirs, to spend how they see fit, as soon as they turn 18.  If they prefer an all-body tattoo and a motorbike to a solid education or house deposit, nothing you can do about it.

+1 for investing the cash rather than sticking it in a savings account earning interest. With such a long investment horizon there is time to ride out any bumps along the way and stockmarket will 99.9% give a better return than cash savings over a 18 year timeframe.

DireEmblem

kinger101 said:

If you pick the JISA option, you have accept the money is theirs, to spend how they see fit, as soon as they turn 18.  If they prefer an all-body tattoo and a motorbike to a solid education or house deposit, nothing you can do about it.

But at least they'll be able to afford a decent tattoo artist, so that's one less thing to worry about when they're older.

Steve182

kinger101 said:

Congratulations.

A junior ISA would be the best home, as you can shelter the money from tax.  Given the 18 year timeframe, I'd go for a stocks and shares ISA rather than cash, perhaps in a world index tracker initially.  Fidelity are reasonably low cost and have a decent range of passive funds.

If you pick the JISA option, you have accept the money is theirs, to spend how they see fit, as soon as they turn 18.  If they prefer an all-body tattoo and a motorbike to a solid education or house deposit, nothing you can do about it.

I personally don't understand the point of JISAs unless the parents (or whoever are paying in) have exhausted their own ISA allowance or think they may not live to see the child reach adulthood. This is because I totally agree with the motorbike/tattoo point. I'm investing so he can go to Uni or help with house deposit or maybe both. When I was 18 I just wanted a Lotus and would have bought one too had I been given free money unconditionally. When I was 18 the insurance cost was not a barrier!

I've so far put about £4.5K in my own ISA which is allocated to my son, who is now nearly 6. I keep an account of exactly what investments within my own (and wife's) ISAs are his and can monitor its value in a (free) morningstar.co.uk portfolio. For what it's worth it's a stocks and shares ISA and a fair chunk is invested in Scottish Mortgage so it's more than doubled in value in the last couple of years. It's is now worth over £10K. In such a timeframe (18+ years) there really is no reason to fear stock market volatility. You can always move it somewhere safer a couple of years or so before you think the money may be needed.

Eco_Miser

kinger101 said:

Congratulations.

A junior ISA would be the best home, as you can shelter the money from tax.  Given the 18 year timeframe, I'd go for a stocks and shares ISA rather than cash, perhaps in a world index tracker initially.  Fidelity are reasonably low cost and have a decent range of passive funds.

If you pick the JISA option, you have accept the money is theirs, to spend how they see fit, as soon as they turn 18.  If they prefer an all-body tattoo and a motorbike to a solid education or house deposit, nothing you can do about it.

But you do have 18 years to subtly influence them to prefer housing and education to body art. 

[Deleted User]

Mentioned it on another thread and possibly the only time I like these funds
Open a JISA (or have it in your own ISA as mentioned above) and invest it in Vanguard Retirement Fund 2040.
This will de-risk the fund until the 18th-20th birthday.