Savings pot for baby? S&S ISA?

laurenc92

Hello,

I’m looking to save the child payment benefit (currently £100 per month in Scotland) for my daughter. This money will be put away until she is at least 18. I looked at a JISA stocks and shares but I am a little worried about handing the cash over at 18 and would like more say in how it would be spent. Was thinking of possibly my opening a Stocks and shares ISA in my name instead but very unsure how this works. Has anyone got any advice? 

MikeJXE

Yes, save for her if you can in a junior isa locked away till she's 18. When that day comes she's an adult and should be able to make her own choices. Did mum control you when you were a8 ?

jimjames

Yes you can open an ISA in your name and use that for her if you haven't already used the allowance yourself. Makes sense to retain an amount of control so you can choose when it's released.

george4064

jimjames said:

Yes you can open an ISA in your name and use that for her if you haven't already used the allowance yourself. Makes sense to retain an amount of control so you can choose when it's released.

I was going to suggest this too.

Keep_pedalling

Or how about doing both? 

Albermarle

laurenc92 said:

Hello,

I’m looking to save the child payment benefit (currently £100 per month in Scotland) for my daughter. This money will be put away until she is at least 18. I looked at a JISA stocks and shares but I am a little worried about handing the cash over at 18 and would like more say in how it would be spent. Was thinking of possibly my opening a Stocks and shares ISA in my name instead but very unsure how this works. Has anyone got any advice? 

Opening your own S&S ISA and opening a S&S JISA are very similar.
The main point to grasp is that the ISA itself, is just somewhere you hold the investments as it protects any gains from taxes. So picking the right investments within the ISA is important. Some have a lot of choice, some only limited choice. There will be some guidance on most of their websites about the way to go, but no personalised advice.
Stocks & shares ISAs: find the best platform - MSE (moneysavingexpert.com)
How to invest in a stocks and shares Isa: The quick and easy guide | This is Money

xylophone

You could open a stocks and shares ISA for yourself - you have a wide choice of providers.

https://www.moneysavingexpert.com/savings/stocks-shares-isas/

You might find the Vanguard offering appealing.

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

https://monevator.com/vanguard-lifestrategy/

You might consider a cash JISA for your daughter - friends and relations can contribute.

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

Outright gifts are after all her own money and she has the right to use as she wishes once legally adult.

https://moneyfacts.co.uk/isa/junior-isas/

Exodi

MikeJXE said:

Yes, save for her if you can in a junior isa locked away till she's 18. When that day comes she's an adult and should be able to make her own choices. Did mum control you when you were a8 ?

No need for the attitude, the OP raises a very valid concern that gets touched upon very often here, and is shared with several forumgoers including myself.

18 year olds are hardly revered for their financial responsibility or prudence, and you can expect a good amount of freshly turned adults would put a few thousand pound up the wall in a month or two, on a monster energy drink-fueled binge of nights out, takeaways and skins in the current 'game of the month'.

All while the parent would be powerless to stop it, as a consequence of this decision now.

I think most parents would rather ensure the money gets used for a driving lessons, or a car, or a house deposit, or a nice holiday.

But you'd rather portray that as controlling behaviour. I'm sure people drop this view very quickly when they're being handed the keys to their first car.

And let's not forget what this whole website is about in the first place! Nothing money saving about facilitating a splurge! Unless of course, 'your kids are different'.

Albermarle

18 year olds are hardly revered for their financial responsibility or prudence, and you can expect a good amount of freshly turned adults would put a few thousand pound up the wall in a month or two, on a monster energy drink-fueled binge of nights out, takeaways and skins in the current 'game of the month'.

Another view is that is they do that, they can learn a valuable lesson. When it's gone it's gone.

Probably the pragmatic solution, is let them have some to blow on what they want, and keep some in reserve, in case they go too mad.

Exodi

Albermarle said:

18 year olds are hardly revered for their financial responsibility or prudence, and you can expect a good amount of freshly turned adults would put a few thousand pound up the wall in a month or two, on a monster energy drink-fueled binge of nights out, takeaways and skins in the current 'game of the month'.

Another view is that is they do that, they can learn a valuable lesson. When it's gone it's gone.

Probably the pragmatic solution, is let them have some to blow on what they want, and keep some in reserve, in case they go too mad.

I know we often have this conversation (as this thread 'how to save for a child' comes up a couple of times a week) - and I agree with the viewpoint that blowing a couple grand may be a good, and 'relatively' cheap life lesson that money doesn't grow on trees. Though I guess that lesson could still be taught either way, if the money was in the parents name and gifted, or the new adults name. That said, there's probably also something to say for giving a new adult their 'independence' by giving them a sum of money to manage.

When I turned 18, I believe my nan had put £400 in an account I had ownership of. I can't remember what it went on, but probably safe to say it was unlikely to have been spent on anything noteworthy. My mum saved about £2000, which she kept physically in a metal tin - and bought my first car + driving lessons with it.

I was of course chuffed to bits, and not once did it cross my mind 'well technically this money has been gifted to me and could be considered as my personal possession, and therefore without immediate and unstricted access to the full lump sum on the dawn of my 18th birthday, I consider this financial manipulation and controlling behaviour.' I think I was just stoked to have been bought a car.

I'll say that's it's probably quite likely that if the full £2400 had been dropped on my lap, I would not have purchased a car or driving lessons. I think at that time of my life, I was going drinking every weekend and having take-out multiple times per day.

Obviously everyones different and of course entitled to raise their children as they see appropriate. Personally, if it was a sizeable amount, I'd probably retain it in my own name and divvy it up as appropriate in the future. I don't have kids at the moment (end of next year we plan to try, we'll probably be the oldest in the playground in our mid 30s!), and I appreciate that's it's probably easy for non-parents to weigh in with their 2c worth on how to parent. I'm sure other methods work just fine for others and there is no 'right way'.

Albermarle

OP - similar thread
Grand Child - best way to save? — MoneySavingExpert Forum