Investing for Children

SieIso

Hi All,

I have two kids, one aged two and the other six months. At the moment we have purchased some premium bonds for both of them, however, I'm not sure this is the best route to take. I have received a leaflet relating to "Shepherds Friendly" talking about Children's ISAs along with a £50 voucher code and I wondered if a S&S ISA is a better route to take.

I want to get their finances right from the start, does anyone have any advice?

eskbanker

Junior ISAs are generally considered a good vehicle for such requirements, with the S&S version typically better than cash over the long term, in terms of preserving/increasing real-terms value.

Friendly societies are rarely good value for money though, so it would usually be better to open a S&S JISA with a mainstream platform such as Fidelity, who tend to be regarded well in terms of their costs and range of offerings.

Bear in mind that JISAs are completely inaccessible until the child is 18, at which point the child has full control whether or not you wish them to....

xylophone

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

Cash JISA rates below.

https://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-children-s-accounts.html

With regard to stocks and shares Junior ISA, you have a wide choice but Fidelity often receives a favourable mention.

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

https://www.fidelity.co.uk/junior-isa/



As for choosing investments within the Junior ISA, a global multi asset fund might be a good choice for regular investment.

https://monevator.com/best-global-tracker-funds/

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

Albermarle

Best to avoid Friendly societies, normally very old fashioned, poor performing products with high fees.

SieIso

Thanks, all for the feedback.

Cash ISAs are probably out, I am not sure if it is possible or even prudent to have a percentage in Cash with the rest in S&Ss.

Fidelity looks like a good platform but I will need to read more about this. Are these S&Ss ones I need to manage actively?

Reaper

SieIso said:

Fidelity looks like a good platform but I will need to read more about this. Are these S&Ss ones I need to manage actively?

You can be as active or inactive as you want. If you were to go with xylophone's suggestion of a wide ranging tracker you could pretty much invest and forget about it.

Albermarle

SieIso said:

Thanks, all for the feedback.

Cash ISAs are probably out, I am not sure if it is possible or even prudent to have a percentage in Cash with the rest in S&Ss.

Fidelity looks like a good platform but I will need to read more about this. Are these S&Ss ones I need to manage actively?

Most would just choose one, or max two investments and then just leave them alone.

With Fidelity you can use their 'Navigator' tool, which will guide you to a hopefully suitable investment (  a Fidelity one of course)
If you use this then two hints.
Due to the long time scale involved, then better to go for high growth/ higher risk ( although in the context of mainstream investments held for many years , then risk really = volatility, rather than risk of very high losses.)
You will also get a choice of 'managed fund' or 'low cost passive fund' . Go for the latter.

Compare what it suggests with the funds mentioned in the links posted by xylophone.