Junior ISA

Alan2020

Hello All,
Was thinking of getting a stocks and shares Junior isa for our 6 year old and start it off with £200 with both of us topping it £50 each (£100) every month as long as we can afford and or 18 years old.
would this be a sensible move to build the child some money ?
If so which stocks and shares junior isa is great, saw the vanguard one.
Would be most grateful for your advice.
Alan

hewhohuntselves

It is a sensible move given that over time equities should be expected to outperform cash, particularly to ensure that inflation doesn’t erode the latter’s value.  That said, there is always the risk that equities suffer a crash. 

Fidelity’s JISA has no fees and their Fidelity Index World P Acc fund could be something to look at.  

Albermarle

Fidelity and HL platforms charge zero platform fee for JISA's, so are the usually recommended ones.

Then you have to pick the investment(s). As you are looking at a 12 year timescale you are probably best with a simple  low cost 100% equity index tracker. It will be quite volatile but should show some good growth over that time period.

Alan2020

Thank you both for the great advice, will go and investigate the products you mentioned.

Alan2020

Just been investigating and their is a junior SIPP, is this a better option or way too complicated?

lr1277

A SIPP of any kind is a product aimed at those thinking of retirement. Nothing stopping you opening a SIPP for your child. Depends when you want them to have the money? 18 or 50+?
Btw: I don’t think there is a government designated Junior SIPP. That is marketing.
A SIPP can be opened for any age of person, whether they are junior or not. Though there are contribution limits if they are not earning. But the account holder does get a tax free top up from the government.

Edited to add: I did see something on my most recent self-assessment I don’t remember seeing before. That is a box to enter your contribution to your pension. Suggests HMRC want to know this for those who are topping up their SIPPS. Makes me wonder if parents who have started a SIPP for their child now have to complete a self assessment return for that child?

Alan2020

Thank you, most informative. Interestingly seems unbelievably how much you can save in a sipp if you start as a child. 

artyboy

Alan2020 said:

Thank you, most informative. Interestingly seems unbelievably how much you can save in a sipp if you start as a child. 

Well the sky's the limit now that the LTA is being abolished. But of course a lot can happen in the 50 or so years that it will have to remain invested, before it can be accessed. 

Long term planning is good, but that's just too long term for my liking, with all the tinkering that governments like to do... 

Albermarle

Alan2020 said:

Thank you, most informative. Interestingly seems unbelievably how much you can save in a sipp if you start as a child. 

Personally I think the thing to think about is when your child will most need/want some money.
I would think sometime in their Twenties, rather than when they are around 60, when hopefully they will already be in a reasonable financial position.

Sg28

A sipp for your child is the last thing to consider after you know they covered for all the things they will need in early adulthood. 

Its a great thing to do but theres no point having 20k in sipp at 24 years old and no money for a car/house/uni etc

MX5huggy

Unless you are using up your own ISA allowance (£20k each) there is little advantage in opening a JISA, you can’t access the money before 18, so say they become world class gymnasts you couldn’t use the money to fund a foreign training camp when they are 16. The at 18 they have full access to the money and can spend it on drugs and drink and waste the rest. If you use your own ISA, maybe invest in a separate fund you don’t have any of these issues.