Advice on isa for 18 yr old

Ian3112

My daughter's child trust fund has just matured ( 15k) and she is soon to go to university. She wants to invest her 15k.,and leave it in for at least 5 yrs. With all the info and numerous products available, can anyone offer her any advice on best investment or is just personal choice? Thanks

cloud_dog

Just to be clear, when you say 'invest' do you mean savings or risk related investments (OEICs, funds, ETFs, etc)?

eskbanker

Lifetime ISA is generally a good product to consider at that age, as it's geared towards those saving for a first property purchase, with a healthy 25% government bonus contribution, albeit restricted to £4K allowance per tax year.

If she goes down that route then it would generally be worth using the cash variant of the product, but if she's really unlikely to need access to the money for at least five years then the investment version may be worth considering.

Beyond that, it's difficult to be specific about whether saving or investing is likely to be better, what other assets does she have?

TheMilkmansDad

5 years isn't really a long enough time to "invest". What does she aim to do after 5 years?

If she's looking at trying to get on the property ladder - maybe start with a LISA to begin with and put the rest in Fixed term savings, dripping in the annual LISA amount (think it's £4k?) each year.

izawa

LISA please. Also a good time to start thinking about pensions

Albermarle

5 years isn't really a long enough time to "invest". What does she aim to do after 5 years?

On the other hand, potentially 5 years of inflation being higher than savings rates, is not great either.

Longer than 5 years to invest is obviously better, but I think at 5 years it is a bit of a 50:50 decision.

Historically the chance of making a loss on global stock markets after 5 years is about 12%. So I imagine that the chance of actually beating savings rates is probably about 75/80%. Once you get to 8 years the odds become more stacked in favour of investing . 

Of course the future might be different .