Investments for 16 year old

boyintheorangeboots

Good morning

My question is two fold if I may:

Firstly, we have been saving some of our 16 year old son's child benefit which now amounts to £10k. It's currently in his Halifax account doing nothing and will stop in September. The account is his name but we are trustees as it was set up years ago. Where is best place to put this please? 

We are thinking some instant access for a car and associated expenses which will be realistically be early next year. Perhaps put into Premium Bonds?

The rest we have no idea about. Some would be good in something long term which can grow. He has also expressed an interest to travel at some point in the future.

The other question is, he is doing an apprenticeship which pays £800 p/m less NI contributions at the moment so a regular savings plan for some of his wages we feel is prudent. Currently the plan is to pay us back for a mountain bike purchase starting September £400 p/m for 6 months, £200 for savings p/m, and the remainder for himself for clothes, going out etc.

We have already discussed this with him and want to get started asap but he (and we) need a better understanding of options.

We are good at saving but need help with the best places to put it.

Any advice will be much appreciated.
Many thanks

boyintheorangeboots

Just to add,  he has his Government Child Trust Fund which currently stands at £420

boyintheorangeboots

And, his wages go into his Nationwide account

cloud_dog

You appear to be very conservative in your approach, e.g. sticking with savings accounts so in that vain and with the child being 16 years of age, I would simply suggest transferring the CTF to Coventry BS JISA, and then depositing the £10k savings in over a couple of years (contribution limit is £9k pa).

boyintheorangeboots

cloud_dog said:

You appear to be very conservative in your approach, e.g. sticking with savings accounts so in that vain and with the child being 16 years of age, I would simply suggest transferring the CTF to Coventry BS JISA, and then depositing the £10k savings in over a couple of years (contribution limit is £9k pa).

Very many thanks for your reply.

To date we have stuck with High Street savings accounts purely as somewhere to put his money in the absence of us knowing any better.....We now think it's time to take the bull by the horns and would like to make his money work for him. Absolutely happy to be more proactive once we gain an understanding of options.

xylophone

You appear to be very conservative in your approach, e.g. sticking with savings accounts so in that vain and with the child being 16 years of age, I would simply suggest transferring the CTF to Coventry BS JISA, and then depositing the £10k savings in over a couple of years (contribution limit is £9k pa).

The OP can make the maximum contribution to the CTF (£9000) for the child's CTF year (which runs birthday to birthday) and then transfer the CTF to the Coventry JISA which will permit the maximum contribution of up to £9000 to be made for this tax year - double bubble as it were.

boyintheorangeboots

xylophone said:

You appear to be very conservative in your approach, e.g. sticking with savings accounts so in that vain and with the child being 16 years of age, I would simply suggest transferring the CTF to Coventry BS JISA, and then depositing the £10k savings in over a couple of years (contribution limit is £9k pa).

The OP can make the maximum contribution to the CTF (£9000) for the child's CTF year (which runs birthday to birthday) and then transfer the CTF to the Coventry JISA which will permit the maximum contribution of up to £9000 to be made for this tax year - double bubble as it were.

Thank you. I am really dense with this kind of thing. 

What benefit will this give? Could you explain it as you would to an 8 year old please? :-)

xylophone

It seems that you have more than £10,000 to save.

The maximum subscription to a CTF is £9000 per CTF year which runs birthday to birthday.

The maximum subscription to a JISA is £9000 per tax year.

You can subscribe the maximum £9000 to the CTF in the CTF year, transfer the CTF to JISA and then subscribe the remaining £1000 (and indeed up to another £8000) to the JISA in the current tax year.

https://www.coventrybuildingsociety.co.uk/member/product/savings/children/junior-cash-isa-2.html

You must ask the Coventry to arrange the transfer.

Eco_Miser

Re transfer to CTF/JISA. This locks the money in until the child reaches 18. If some of the money is wanted before then, eg for driving lessons/ a car, leave that amount in a bank account (or put in PBs).

boyintheorangeboots

xylophone said:

It seems that you have more than £10,000 to save.

The maximum subscription to a CTF is £9000 per CTF year which runs birthday to birthday.

The maximum subscription to a JISA is £9000 per tax year.

You can subscribe the maximum £9000 to the CTF in the CTF year, transfer the CTF to JISA and then subscribe the remaining £1000 (and indeed up to another £8000) to the JISA in the current tax year.

Thank you. What benefit does putting £8.5k (-£420 is already in there) into his CTF first and then a JISA? And how long would it need to stay in his CFT before transferring to a JISA? 

boyintheorangeboots

Eco_Miser said:

Re transfer to CTF/JISA. This locks the money in until the child reaches 18. If some of the money is wanted before then, eg for driving lessons/ a car, leave that amount in a bank account (or put in PBs).

Many thanks.

Does he then open a normal ISA to transfer the money into once he's 18? How easy is it to take out funds from an ISA if he needs the money for anything in the short term?