How to save for children without an ISA

Lily091213

Hi all, 
Apologies if this has been asked before. I did search but couldn't find exactly what I wanted. 
I have a 6 month old child and I'm thinking of putting some money aside for her. 

I'm not sure if I like the idea of it being in her name and her getting it when she's 18. I remember myself at 18 - not sure if I'd trust her ha! I think I want it in my name so I can can just give it to her or even better, buy things for her like a car or house deposit or whatever. 

I would normally just open an ISA in my name but I already have a Lifetime ISA that I'm using to save for my own house deposit. And I can't have two ISAs, can I?

What else can I use to save money for her? Just a regular Savings Account? The interest seems miniscule. 
Am I missing a trick? What's the best thing to start saving into, that I can keep paying into for the next 18-20 years? 

Thanks!

Eco_Miser

You can have many ISAs. In particular you can subscribe to both a LISA and a S&S ISA in the same year, with a maximum of £20k per year in total.

You could also invest in a General Investment Account, but you might as well use an ISA and get the tax advantages.

Alexland

Lily091213 said:

I would normally just open an ISA in my name but I already have a Lifetime ISA that I'm using to save for my own house deposit. And I can't have two ISAs, can I?

You are allowed to contribute money into 1 of each of the 4 types of ISA up to the overall £20k limit each tax year. So yes if you only have a LISA you can still contribute into other types of ISA for example a S&S ISA if this is not going to be withdrawn for 17.5 years.
https://www.gov.uk/individual-savings-accounts

Lily091213

@Eco_Miser @Alexland would you recommend a S&S ISA rather than a Cash ISA for a 18 year investment? I've been reading up on S&S and obviously it sounds riskier and also a bit more confusing. I think I'd open one with a company that does the investing for me as I'd be awful picking myself! But this will likely be a fairly small amount - we were thinking £50-100 per month, so I wouldn't want fees to eat into it too much.

Can you point me in the direction of some recommendations or do you have an opinion yourselves? Thanks! 

Alexland

Yes 18 years a suitable timescale to hold a S&S investment to ride out the ups, downs and occasional market crashes.
If you are going to use an adult S&S ISA then Vanguard Investor are good value at 0.15% ongoing platform charge and would require you open the account with either a £500 lump sum or regular contribution of £100 per month (although this can be reduced or stopped after the account is opened but probably best to do at least 5 months to match the minimum lump sum).
On the Vanguard Investor platform you can invest in their range of funds including the well diversified Global All Cap fund which is a stock market index tracker containing thousands of companies. Alternatively you may wish to consider their Lifestrategy 80 fund which is similar but also includes 20% fixed income bond investments to reduce volatility. As you get closer to withdrawal you can reduce volatility by switching into less adventurous funds in the Lifestrategy series. These funds have ongoing charges of around 0.22%.
Always ensure you have some emergency cash before investing to ensure you never need to sell while markets are low.

garmeg

I am too old for a LISA so just curious. Does the £20k maximum contribution limit include the max government bonus of £1,000 or not?

eskbanker

garmeg said:

I am too old for a LISA so just curious. Does the £20k maximum contribution limit include the max government bonus of £1,000 or not?

No, £20K is what you can pay in (to ISAs collectively), the LISA government bonus is separate from this.