Best way of investing for a newborn / child?

whatwasmyname

I appreciate questions starting out best often aren't the greatest of ideas but we'll see where we end up with this.
Sister is going to have a child & I'd like to set money aside as something of a kick-starter for them. First house, pension kind of thing. 
Now completely wanting to keep away from the topic derailing teach the child how to manage their own money, what would be the best (as in say making the money grow the most, making use of any child related benefits/perks if there even is any) way to do this?

I'll take a guess that no matter what I want it to be earmarked for, as soon as the child turns 18 they can urinate it down the nearest drain if it's in their own name? Not saying all 18yr olds are like that, just saying I assume it can be wasted.

So if you was wanting to set money aside (not sure how much yet, it's just an idea at the moment) for something like this and you were wanting it to do better than just regular cash savings, how would you do it?

Zola.

Junior S&S ISA, Vanguard All Cap Index, chuck in some each month

MX5huggy

Not sure if you are happy with the risk of them sending through the sewer or not. 

Junior ISA, they have full access at 18.

Use your own ISA, it’s your money you can give it away when you like.

Junior SIPP, they have full access at 57.

Whichever you choose you should invest as over an 18 year period (or 57) investing is very likely to be better than saving. 

I would use a cheap global index tracker. I would use Fidelity for the JISA or JSIPP because they don’t charge platform fees. The parents will have to be involved in opening these. 

ChilliBob

Second Fidelity for the JISA, and also a global tracker. Whilst not as comprehensive as ftse all cap, the fidelity world p is very cheap and also a worthy contender.

I'd be 100% equities myself, indeed, I am for my son and intend to be for my daughter (due in a month!).

Fidelity free trading of OEICs did make me 'collect' some active funds when I was an investing newbie, probably in hindsight a silly choice! 

Olinda99

definitely equities - not savings accounts.

whatwasmyname

Yes I would prefer to go the investing route for sure. We're talking 18 years very minimum, probably more than that. I haven't fully decided what I think would be best yet. 

There's 2 things I can think of where I could've done with help and you can never have enough and that is house purchasing and retirement planning. The house purchasing I saved well for what I was earning but you can never have enough or too much. As for the retirement planning, it was just boring stuff until I was about 30. All I kept getting put to me was old age pensions wont be around when you're my age etc. I just wasn't interested. By the time I got interested I had wasted a huge period of time. 

So I'd like to help my niece/nephew on their way. I'll not be donating megamoney but it'll be more than nothing therefore it's better than nothing.

The JuniorSIPP is an interesting one. It can't stay junior until they're 57 I'm sure so does it just turn in to a normal SIPP at 18?

Am wondering whether it may be a better idea to split anything I give between the two. The SIPP will do for retirement, but when they turn 18 the ISA could be maybe a Lifetime ISA or whatever equivalent may be available at that time and do for a house purchase. Sure they could say no that drain is calling & I need to urinate right now who knows, but I'd like to think they'll end up better than that come that time.

xylophone

https://www.thetimes.co.uk/money-mentor/article/pensions-for-children/

https://www.gov.uk/junior-individual-savings-accounts

Zola.

A SIPP for a child in this scenario is a bit silly in my opinion - sure it will likely compound to a great amount, but its locked away for the guts of 60 years. They might not even live that long, they might not even need it by then either.