Child inheriting £20k - what do I do?

sjclark74

My son is 14 & inheriting £20k from a relative that needs to be invested until he’s 25. I don’t want to risk losing any of his money but don’t know the best way to invest it until he is allowed to access it. Any advice would be appreciated as I don’t have a clue. 

IvanOpinion

Given that we are talking of 10+ years then investing (in an ISA) sounds like the right choice.  Personally I would look at something like a global tracker or maybe one of the vanguard lifestrategy funds or maybe even Nutmeg- not because they are the best but because they are simple solutions for someone with little knowledge.

You will also need to think of which platform to use.  If you choose a Vanguard fund(s) (lifestrategy, their global tracker or other vanguard funds) then you could use the Vanguard platform which is reasonably low cost;  similarly with Nutmeg you use their platform.  If you want a different global tracker then you will need to choose another platform (e.g. for £20K iWeb could work out as good value).

It is a huge question you are asking.

Robin9

sjclark74 said:

My son is ...........................t until he is allowed to access it........

As I understand it he can access it from age 18 regardless of what the legacy may say. 

whatstheplan

sjclark74 said:

My son is 14 & inheriting £20k from a relative that needs to be invested until he’s 25. I don’t want to risk losing any of his money but don’t know the best way to invest it until he is allowed to access it. Any advice would be appreciated as I don’t have a clue. 

Others on here will have better advice than me.  However I note you say you want to invest the money on his behalf but don't want to risk losing any of it.  That limits your options slightly as most investments carry the risk of dropping in value.  I was going to suggest a junior stocks and shares ISA, this would give the opportunity for the investment to grow over the next 10 years, however there is also a risk of the value dropping.  You could even hedge your bets slightly by putting £9k into a standard junior ISA and £9k into a junior stocks and shares.

If the ISA option doesn't appeal, you could look at junior savings accounts.  This might help:

Martin Lewis video: Which are the best children's savings accounts? (moneysavingexpert.com)

DoctorStrange

Hi. 
You can't avoid risk entirely, I'm afraid.

Closest you can do is place the money on deposit and let inflation slowly erode the value (unfortunately, interest rates are not currently beating inflation so, assuming c2% inflation and c0.5% interest, the £20k would only be worth c £17k in 11 years time, around 15% less than today).

Over 11 years, though, the probability of losing money via an actual investment into stocks and shares is quite low, and is in fact more likely to beat inflation, meaning he'd likely have more than he started with. This isn't guaranteed of course, and he could lose much more than inflation depending on the markets and exit plans.

I understand the desire "not to lose anything" but unless you can find accounts paying at least 1.5% - 2%, some small loss might have to suffered, in real terms.

pbartlett

the other option for complete safety is premium bonds

JustAnotherSaver

If you don't want to risk losing "any" then just put it in the bank. No investing but no loss either. 25k will be 25k.

The only loss will then be through inflation but you'll still have your (or his) 25k.

Oops, 20k.  Got the 25 from the age. My mistake. 

p00hsticks

You need to explore exactly what the will says, as it sounds as if the money may need to be held in some sort of trust, which could limit your options. The people over on the Deaths, Funerals and Probate board may know more

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

As Robin9 says, I think it is quite difficult these days to prevent people accessing any inheritance once they turn 18 (16 in Scotland, I believe), despite what any will says. other than keeping them entirely in ignorance of its existence.