Child investment £75k

Jonesy_40

Both my daughters have been given a gift of £75k each from their grandparents. They are 7yrs and 5yrs old.
Any advice on best way to invest this money for them until they are 21? 

El_Torro

If you're going to put the money in their name then they will have access it to it at 18, you won't be able to make them wait until they are 21. 

Regardless it's going to be at least 11 years before they can access the money, so I would invest it rather than save it. A global tracker or multi asset fund should suffice for this. A Junior ISA each is a good start, though you won't be allowed to put all the money into it in one go. 

Vook

I cannot give investment advice but can say what I might do in your situation.

Given the length of time the money will be invested and the ages of your daughters, I would go for 100% equities. Then find a JISA with low fees for holding a single, cheap global tracker. Every year I would put the maximum allowed into the JISA (currently £9000) from a general investment account holding the rest of the money in the same tracker.

Bigwheels1111

One thing I’ve read recently is any interest earned over £100 you will get taxed on it.

Dazed_and_C0nfused

Bigwheels1111 said:

One thing I’ve read recently is any interest earned over £100 you will get taxed on it.

You've misunderstood that.

https://www.gov.uk/savings-for-children

Both my daughters have been given a gift of £75k each from their grandparents

xylophone

If this is a gift to your daughters then the money belongs to them and should be held in their sole names with you as bare trustee.

You might consider a Junior ISA for each child (£9000 each per tax year) - considering the time period involved, you might prefer to use the stocks and shares option or combine stocks and shares with a cash JISA.

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

Fidelity often gets a favourable mention on the forum but there are other providers, notably Hargreaves Lansdown, AJ Bell, Charles Stanley etc.

You might choose a global multi asset fund.

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


Or you might consider the Vanguard offering.

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

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

Each child might then have an account like this

https://www.skipton.co.uk/savings/childrens/childrens-trust-saver

Other child accounts here

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

You can gradually move their money into their JISA accounts. 

Albermarle

As well as setting up longer term investment accounts, like JISA's , you may want to keep a small amount  aside in a savings account they can access.
These can be used as a way of learning about money, bank accounts etc. which will hopefully come in handy when they can get their hands on the rest of the £75K at 18.....

ChilliBob

You can also buy premium bonds for children too - just another thing to consider.

Oh and a much lesser used option, since you probably don't get to see you children even access it, is a Junior Sipp so to speak, obviously the compounding really works its magic over a period of say 55 years

Malthusian

El_Torro said:

If you're going to put the money in their name then they will have access it to it at 18, you won't be able to make them wait until they are 21. 

Based on the OP's post - "Both my daughters have been given a gift of £75k each" - the money has already been put in their name, and they will have access at 18, or 16 in Scotland. 

ChilliBob said:
Oh and a much lesser used option, since you probably don't get to see you children even access it, is a Junior Sipp so to speak, obviously the compounding really works its magic over a period of say 55 years 

Assuming the OP is correct and the money is already the children's, they cannot do that. They have an absolute right to access the capital at 18 or 16 in Scotland.

One other thing not mentioned - assuming the money has been gifted to the grandchildren (not Jonesy_40) and is in "bare trust", the trusts will need to be registered with HMRC. 

cardriver98

Don't forget if the GP's pop their clogs within 7 seven years there will be a tax liability . 

JGB1955

cardriver98 said:

Don't forget if the GP's pop their clogs within 7 seven years there will be a tax liability . 

..... due by the estate, not the beneficiaries.