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Where to invest Child Trust Fund after withdrawing ?

sky_rat
Posts: 229 Forumite


My daughter is 18 and has withdrawn her child trust fund of £10k. She has put it into an HSBC Online Bonus Saver account for now so she can get access to it, but she wants to invest it for the future.
I have no experience with savings accounts, so I am seeking guidance on where she can invest her money.
I thought she would need something like an ISA. However, the ISA guide on the MSE website states...
Now rates have risen, basic rate taxpayers only need around £20,000 in
normal savings to pay tax on it, and higher-rate around £10,000. If you don't have this much, then as cash ISAs usually pay less interest than normal savings, you should opt for a standard savings account
So as she only has £10k to invest, would she be better off with a normal savings account rather than an ISA ?
She is currently in college full time and does ocassional work in retail, therefore she does not earn enough to pay tax.
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sky_rat said:My daughter is 18 and has withdrawn her child trust fund of £10k. She has put it into an HSBC savings account for now so she can get access to it, but she wants to invest it for the future.
https://www.moneysavingexpert.com/savings/lifetime-isas/
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With £10k to save she'll get roughly £500/year interest. The allowance for 20% taxpayers is £1,000 and given that she's a non-taxpayers there's no tax advantage in having a Cash ISA (at least in the short term).
I suppose a Lifetime ISA would be an option if she's thinking more long term (buying a first home) but the money's tied up and can normally only be used for a house purchase.1
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