Starting long term savings for 19 year old

My daughter will be going to university in September to do a 5-6 year course and I'm aware that in that time she will be racking up the debt! As she won't be putting a pension in place until she is mid-20s at least, I think it would be a good idea for her to have some long term savings already in place and earning interest for her. Initial investment would be around £2.5k to £5k. Not sure if this will be added to or not whilst she is studying. Thinking about a LISA i is this a good idea for someone in her situation, or any other suggestions/advice? thanks


  • ColdIron
    ColdIron Posts: 8,668
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    edited 12 February at 12:50PM
    It depends what she wants the savings for. If it were to go towards a property then a LISA is good (assuming she will be 18 or more) as it gets a £1,000 top up, but if it was for another purpose it would be poor as it would suffer a 6.25% penalty on withdrawal
  • Albermarle
    Albermarle Posts: 21,124
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     I'm aware that in that time she will be racking up the debt! 

    Presume you mean getting a student loan, which is not really a debt at all in the normal sense of the word.

    Anyway a LISA would be good, make sure you/she  understand the rules.

    Lifetime ISA (LISA): how they work & best buys (

    Depending on what you mean by 'long term' savings, this could affect the choice.

    Over 5 years it may be better to invest it than save it.

  • elkiedee
    elkiedee Posts: 49
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    edited 12 February at 8:49PM
    I think student loans really are quite a debt - the costs and terms have changed over the years since they were introduced. But also, given rents and living costs, even on a budget, many students will have debts on top of what are described as "student loans". Sadly I don't think I'll be in a position to do this for my kids in 2025 or 2027, but if I were, I'd be inclined to stick to savings/investments which are fairly flexible in purpose at this point - if your daughter has 5/6 years ahead of her at university before hopefully moving into employment, it's going to be a while after that before she's in a position to consider buying a home. You're not sure whether you're going to be able to contribute over the next few years. 
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