Investment account for new born baby - No access until 21/25 (preferably 25)

Alexland

JustAnotherSaver said:

So invest early to bag the J-ISA perks and at whatever point before they hit 18 is suitable, withdraw the cash, invest in your own name until they hit 25 and then give it them.

Sorry how would they withdraw the cash from the JISA before the child turns 18?

Sea_Shell

What about a pension?   Can you open one for a child?

You could then split the money between "locked away for many, many years" and "will be available at 18", so hedging your bets!!!

Your child then gets the benefit of some "yay, spends!!!" money at 18 (unless they are 18 going on 30), and some "sensible retirement funds" for the future.   Best of both worlds?  Maybe?

xylophone

So invest early to bag the J-ISA perks and at whatever point before they hit 18 is suitable, withdraw the cash, invest in your own name until they hit 25 and then give it them.

It is not possible to withdraw from the JISA (except in the saddest of circumstances)  before the "child" reaches age 18  at which time only the "child" has the right to access the money.

pbartlett

not really my area of expertise but as sea shell says:

you can pay £2,880 a year into a child's pension, which can take the form of a self-invested personal pension (Sipp), or a stakeholder pension, among other types.

The child will benefit from 20 per cent tax relief on top of this, taking the total to £3,600.

However, the money will be tied up until the child is in their late fifties.

Chickereeeee

Albermarle said:

If i wasnt so stupid with money when i was a teenager, id have more confidence in the money not being wasted on girls, cars or similar as soon as possible. 

It is a right of passage for most 18 year olds  to 'waste' money on girls , cars , booze etc and trying to stop them is like trying to stop them staying out really late and spending too much screen time , or not tidying their bedroom - a lost cause.

As said above it does not necessarily follow that they turn out bad , it is just a phase for most.

They HAVE money to waste at 18? I never did, and that was supposed to be in the 'boomer' golden days.

The_Real_Cheddar_Bob

Alexland said:

The_Real_Cheddar_Bob said:

I have an isa for myself and my fiance, so using an account in our name is not the best solution, although will allow us to control when he gets what.

Are you each using your full £20k annual ISA contribution allowance? Remember you are each allowed to contribute to one of each type of ISA during the tax year up to that overall limit. You might also for example chose to hold a different fund for the child in the same S&S ISA wrapper so you know the money is going towards a different objective.

The_Real_Cheddar_Bob said:

If the housing situation gets worse, he will need all the help he can get.

We are using our S&S Lifetime ISAs with 25% government bonuses to invest towards helping our kids with their house deposits. When we can withdraw without penalty from age 60 the kids will be in their 20s so the dates roughly align.

Yes we are, at least last year and this one. 

Lifetime ISA is a good idea. Thank you for that 

AlanP_2

As George Best is reputed to have said:


I spent 50% of my money on women, drink and cars - the other 50% I wasted.


Whilst I was terrible with money in my teens / early twenties my 3 kids have turned out the total opposite and are all very sensible with what they earn but still use some for "enjoyment" activities - what's the point otherwise?

ratechaser

pbartlett said:

not really my area of expertise but as sea shell says:

you can pay £2,880 a year into a child's pension, which can take the form of a self-invested personal pension (Sipp), or a stakeholder pension, among other types.

The child will benefit from 20 per cent tax relief on top of this, taking the total to £3,600.

However, the money will be tied up until the child is in their late fifties.

And that last sentence is why this is a route we didn't go down for our children - it may sound like a no brainer to get the extra cash upfront, but I wouldn't trust 40+ years of varying governments to not tinker with both the tax position and the age where it can be accessed. Especially given all the borrowing from the past year is going to have to be repaid somehow...

Sea_Shell

ratechaser said:

pbartlett said:

not really my area of expertise but as sea shell says:

you can pay £2,880 a year into a child's pension, which can take the form of a self-invested personal pension (Sipp), or a stakeholder pension, among other types.

The child will benefit from 20 per cent tax relief on top of this, taking the total to £3,600.

However, the money will be tied up until the child is in their late fifties.

And that last sentence is why this is a route we didn't go down for our children - it may sound like a no brainer to get the extra cash upfront, but I wouldn't trust 40+ years of varying governments to not tinker with both the tax position and the age where it can be accessed. Especially given all the borrowing from the past year is going to have to be repaid somehow...

Which is why I'd suggested splitting the money.

I guess you have to weigh up the "cons" of a pension against the "cons" of them potentially blowing the cash at 18 or 25 (or older!)

jimjames

The_Real_Cheddar_Bob said:

Hi all,

I'm hoping to find an investment account I can open for my soon to be born son. I am aware he needs to be born in order for me to do this, he will arrive any day. 

It's not clear from the post whether you mean investments or savings as many people use them interchangeably but over the time periods you're looking at investing the money rather than keeping as cash would make more sense to try to beat inflation.