Could I have some simple guidance for my children's JISAs please?

ChasingtheWelshdream

I have very little to contribute, but I feel that I should be making a better decision on my children's ISAs, but I don't really understand them. Is anyone able to offer some very basic guidance please?

I have three children - 12, 14, 16 and have realised how little I have saved for them.

The eldest two had CTFs with £500 and £250 initially. The youngest did not get one. We did not contribute to these at the time. 

A few years ago I opened a JISA for my youngest with a lump sum, and transferred the elder CTFs to JISAs. These were cash ISAs and I could only contribute £5 per month each. 

Two years ago I opened Scottish Friendly S&S ISAs for each and contribute £10 per month. I've just looked at the statement and have contributed £240 each, and they currently stand at £263 each, so £23 bonus in two years. These are all in UK Government Bond because it looked like the safest option, but I don't know if I should now be choosing something else?

As it stands, we have:

Eldest (16):  Santander Cash ISA  - £2015. Interest £3.20%  No active contributions
                      Scottish Friendly ISA  - £263, UK Government Bond. Currently paying £10 p/m

Middle (14):  Santander Cash ISA  - £1453. Interest £3.20%   No active contributions
                      Scottish Friendly ISA  - £263, UK Government Bond  Currently paying £10 p/m

Youngest (12):  Santander Cash ISA  - £931. Interest £3.20%   No active contributions
                      Scottish Friendly ISA  - £263, UK Government Bond  Currently paying £10 p/m


I could increase to £20 each now, which I realise is still paltry.

I am very conscious that my eldest will be accessing his in two years and it seems very little to show for 18 years. It wouldn't even buy an old car + insurance. :-(

My youngest has a few years to catch up, and I would like them all to have roughly the same - in real terms - when they turn 18, but I'm not sure how best to go about things now. 

I have options on the Scottish Friendly app to choose other investment pots, but what they all mean is rather beyond my understanding of basic savings accounts. 

Is anyone able to offer any opinions or guidance? I realise the amounts are tiny but I just haven't been in a situation to do much more. 

eskbanker

Given access to the money at 18, it's generally recommended to invest for newborns but to use lower risk products in teenage years, to minimise the chances of significant capital losses at inopportune moments, so in your shoes I'd get the money into the best-paying cash JISAs:

https://www.moneysavingexpert.com/savings/junior-isa/#bestbuys

There's no right or wrong way to even things up in real terms, but you might consider using the value the eldest has at 18 and indexing that to a higher target figure for the others when they get there?

ChasingtheWelshdream

With indexing do you mean that whatever the eldest gets at 18 - estimate what that would be worth when the others turn 18?


So do you think the Scottish Widows isn't really worth keeping now, and transferring both into a cash JISA? 

For all three children?

eskbanker

ChasingtheWelshdream said:

With indexing do you mean that whatever the eldest gets at 18 - estimate what that would be worth when the others turn 18?

Yes, not necessarily in advance, but if, say, the eldest has £3K at 18, and inflation is 5% over the two year period until the next one reaches 18, a target maturity figure of £3,150 might be seen as appropriate?

ChasingtheWelshdream said:

So do you think the Scottish Widows isn't really worth keeping now, and transferring both into a cash JISA? 

For all three children?

It really depends on attitude to risk and what your rationale was for choosing that investment in the first place (gilts are pretty low risk to be fair), but as a general point of principle, it's worth derisking towards maturity and going to cash is typically the safest route over a relatively short period.

ChasingtheWelshdream

Thank you, that makes sense. For the 12 year old, is 6 years seen as a short period?

My rationale was purely lack of understanding and moving from a cash to a stocks ISA, I picked what looked the safest from the chart. 

rugbypark017

I can’t see how to start a new topic, so I’ve piggy backed not this one. I have three JISAs in the Woodford Fund with Hargreaves Lansdown. All three are frozen, obviously. I have been checking when all this will end and it looks like LF Funds have only one major shareholding to sell. Hopefully soon.
in the meantime, I invested in a further three JISAs with AJ Bell. I didn’t realise you couldn’t have more than one JISA. They have been going about three years and the Inland Revenue have never contacted me. The first oldest grandchild still has four years until she is 18. I’m tempted to think the Woodford fund will be wound up soon and this will leave me with just the AJ Bell JISAs and it will never be noticed.
if I do come clean, will I lose any money with the AJ Bell ISAs? Any gains wouldn’t have exceeded income tax it cgt allowances. Could I continue in the same fund, but just without the JISA rapper?
Unsure what to do.

Thanks

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81906866#Comment_81906866

New topics can be started via the red '+ create new' button.

In terms of your issue with multiple JISAs, there's little point in speculating about what'll happen as there's nothing you can do about it now anyway (until the holders each reach 18), so just hang fire and see if HMRC compliance checks eventually identify anything and what, if anything, they choose to do about it.