£18k for an 18 year what's best?

Nick9967

Hi all
Years ago i opened a "Childs Trust Fund" when the government introduced them.
Since that point I've contributed to the account at Forresters and the fund has now grown close to £18k.
My lad will be 18 in 1 year almost exactly and will then have access.
he wants me to advise him what to do with this money.
My view is that rarely in your life will you have a pot of nearly £20k in cash so be wise with it!
Any ideas on what may be the best way to attack this, safety is paramount , maximising its benefit/use is its target.
thanks in advance

  

Alexland

The choice of savings or investment account will depend on his objectives for the money. Does he expect to be spending it soon after 18 on university or a car, could it be gradually added to a lifetime ISA (moving £4k per tax year) for a 25% bonus on a qualifying property purchase, etc.

Albermarle

You will probably be aware that Forresters offers stocks and shares ISA and a Lifetime ISA. Maybe they will promote them to you at some point .
Just be aware that these friendly society investments tend not to be the best value for money . The charge of 1.5% is definitely on the higher side.

Nick9967

Luckily he's sorted for a car (bought it last week) , i don't want him using it to prop up Uni living expenses.
perhaps would consider putting a significant part into the lifetime ISA to get that benefit,  little else does what buying property does if you're careful with it! and getting on that ladder is so difficult compared to when i was young.
I wont stay with Forresters i dont think, as you mention fees are more than im willing to pay 

Alexland

Nick9967 said:

i don't want him using it to prop up Uni living expenses.

It's his money and under his control at 18 so unless he commits it into a fixed term savings bond which offers no withdrawals there's always the risk he might dip into it. Worse if it's in a Lifetime ISA as there is a small penalty greater than the bonus for withdrawing if not used for a qualifying property purchase or from age 60+.

Nick9967 said:

perhaps would consider putting a significant part into the lifetime ISA to get that benefit,  little else does what buying property does if you're careful with it! and getting on that ladder is so difficult compared to when i was young.

If he does go with the Lifetime ISA consider if the property purchase is likely to happen in the short term (ie next 5 years) so he might want a Cash LISA or medium to long term (ie 5 years+) when he might want a S&S LISA provider (accepting the valuation will be volatile). Also he needs to understand the full product terms including consideration on if he is likely to be impacted by the £450k property price cap (which with property price inflation might be more restrictive by the time he comes to buying) particularly if he combines buying power with a partner.