Savings for a new grandchild

ukwendy

We are expecting our first grandchild very shortly and would like to set up some kind of savings scheme for him immediately. We want something that we could start with a lump sum and add to as and when but one that we can set up and control ourselves - so not a junior ISA or similar. I've been told to look at a Bare Trust or investing in Gold with the Royal Mint. Any advice would be really appreciated. Thanks, Wendy

MX5huggy

Do you use up own ISA allowance each year? 

xylophone

 You are aware that the funds in a Bare Trust  would be in the beneficial ownership of your grandchild and that he would have the absolute legal right to call for access and control at the age of 18 (16 in Scotland)?

See https://techzone.abrdn.com/anon/public/iht-est-plan/Prac-guide-gifting-child-grand

under Trusts.

https://www.gov.uk/trusts-taxes/types-of-trust

Below may be of interest

https://www.youinvest.co.uk/investing-for-children/dealing-accounts-for-children

https://monevator.com/low-cost-index-trackers/

ukwendy

@xylophone no I wasn't - that's good to know! I will go and read these articles now, thank you.

ukwendy

MX5huggy said:

Do you use up own ISA allowance each year? 

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. Thanks.

Albermarle

ukwendy said:

MX5huggy said:

Do you use up own ISA allowance each year? 

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. Thanks.

Over 18 years you would normally expect a significantly better return from regular investing in a Stocks and shares ISA .

xylophone

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. 

You could consider a  lump sum and then regular contribution to a stocks and shares ISA in your own name and then gauge the best time to make any gift to your grandchild.

ukwendy

xylophone said:

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. 

You could consider a  lump sum and then regular contribution to a stocks and shares ISA in your own name and then gauge the best time to make any gift to your grandchild.

Thank you - that sounds like something worth looking into.

Keep_pedalling

I know you don’t want to use a Jisa but it is the best option unless you don’t trust your child to manage the account.

It is what we have done for our 3 GC. We provided a lump sum to set up each one, and top them up each birthday. The money has been invested in our recommended funds and our top ups are paid directly into their accounts . 

Notepad_Phil

xylophone said:

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. 

You could consider a  lump sum and then regular contribution to a stocks and shares ISA in your own name and then gauge the best time to make any gift to your grandchild.

The even better thing about doing it this way is that when other grandchildren come along you can simply up your contributions and share out the money from the one pot as your grandchildren reach what you consider to be the right time.

ukwendy

Notepad_Phil said:

xylophone said:

We could do that but interest rates are so low that we are looking for something that may have a better return over the next 18 years. 

You could consider a  lump sum and then regular contribution to a stocks and shares ISA in your own name and then gauge the best time to make any gift to your grandchild.

The even better thing about doing it this way is that when other grandchildren come along you can simply up your contributions and share out the money from the one pot as your grandchildren reach what you consider to be the right time.

Oooh I like that idea - and it works out fairer for them all doesn't it? Thank you.