16 year old wants to invest

QuinnMcfc1977

Hello, my son is 16 and has his first job. He js interested in investing some of his wages and I want to encourage this. Due to his age I am not sure what product is best for him. I couId open a Junior ISA but he only wants to invest periodically rather than a set amount each month. He wants to be able to transfer money from his own bank account to the investment account (ie I don't want to be the one who is transferring this money for him). I don't think his is too fussed about choosing his own stocks and shares but might enjoy this option. He would probably prefer to have easy access rather than have the money locked away.

Is there a product that would suit him?

Keep_pedalling

Easy access and investing do not really go together. Investing is for the long term 10 years +. 

wmb194

QuinnMcfc1977 said:

Hello, my son is 16 and has his first job. He js interested in investing some of his wages and I want to encourage this. Due to his age I am not sure what product is best for him. I couId open a Junior ISA but he only wants to invest periodically rather than a set amount each month. He wants to be able to transfer money from his own bank account to the investment account (ie I don't want to be the one who is transferring this money for him). I don't think his is too fussed about choosing his own stocks and shares but might enjoy this option. He would probably prefer to have easy access rather than have the money locked away.

Is there a product that would suit him?

To open a brokerage account and own shares directly you need to be 18. A Jisa or some sort of trust account where you’re the trustee might be the only options e.g., AJ Bell’s bare trust account for children.

https://www.ajbell.co.uk/investing-for-children/dealing-accounts-for-children

ColdIron

QuinnMcfc1977 said:

He would probably prefer to have easy access rather than have the money locked away.

Then he should consider cash as investing is not suitable for short term access. When I was 16 with sudden access to cash I had many plans for things I wanted to buy that I couldn't before, and long term was 'by the summer'

I don't think his is too fussed about choosing his own stocks and shares but might enjoy this option

Would it be uncharitable of me to suggest that it is your encouragement that is driving the desire for investments over cash?

Edit: A Junior ISA, even a cash one, may not be the best place as what with the various tax allowances available to your son it's unlikely he would pay tax anyway. I would look for the best rates that allow easy access

Bizzywizard

My daughter is 18 next week and has been saving near enough all her money from her Saturday job and over time since 16. She has been sending money to a regular saver with Nationwide (they have also given £100 for the last 3 years), but she puts in what she wants (normally £200 a month) She also has a co op account with a saver £250 a month and Santander, but once she is 18, she is going to switch her Santander account to first direct and make the £175 switching bonus plus the 7% saver which is £300 a month. She will also open a LISA and pay in £4k before april 2025 and then another £4k after May 2025.

So I would suggest get him to open 3 accounts with regular savers attached, as they pay better amounts than the JISA. Once he is 18 get him to start switching bank accounts to make extra money. Then also have a LISA with moneybox if its still around then! 18 is the time to look at real investment, but you need to be 18. I think getting him to switch and save regulary is far more important, as it gives him a good base for his future finances and security.

Exodi

QuinnMcfc1977 said:

I don't think his is too fussed about choosing his own stocks and shares but might enjoy this option. He would probably prefer to have easy access rather than have the money locked away.

Sorry but this just doesn't make any sense. It's like asking for recommendations on a drink, with a preference that it's not wet.

If he wants easy access to his money, then use an easy access savings account. I recently recommended Tandem to my younger brother who is the same age as your son (pays 4.65% interest monthly - app based, quick withdrawals, easy to use, no penalties for withdrawals). And for completeness, you can get a slightly higher rate elsewhere.

ColdIron said:
Would it be uncharitable of me to suggest that it is your encouragement that is driving the desire for investments over cash?

I'll likewise be possibly uncharitable as this was my first thought also. 

QuinnMcfc1977

ColdIron said:

QuinnMcfc1977 said:

He would probably prefer to have easy access rather than have the money locked away.

Then he should consider cash as investing is not suitable for short term access. When I was 16 with sudden access to cash I had many plans for things I wanted to buy that I couldn't before, and long term was 'by the summer'

I don't think his is too fussed about choosing his own stocks and shares but might enjoy this option

Would it be uncharitable of me to suggest that it is your encouragement that is driving the desire for investments over cash?

Edit: A Junior ISA, even a cash one, may not be the best place as what with the various tax allowances available to your son it's unlikely he would pay tax anyway. I would look for the best rates that allow easy access

I've never encouraged him to invest. However we do speak with our children regularly about how pensions work and how compound interest works and yes this includes discussion about how you need to keep your money invested long term. He is also interested in doing an economics degree and working in finance. I am pleased that he has shown an interest in making his money work for him, even if this is trial and error at this stage. He may well find that actually yes he does want his money next week or next summer rather than keeping it invested hence the suggestion that he is able to withdraw his money if he changes his mind about keeping it invested. 

dunstonh

I wonder if your son has been influenced by social media trading sites that make investing sound fun.   

If investing is done correctly, it is boring and it is long term.  i.e. 10-15 years+     Does a 16 year old really want to be investing for 10-15 years+?

fatbelly

He has access to some good savings accounts. I'd try one of those

MX5huggy

If he was born in the UK he will have a Child Trust Fund unless you have already transferred it to a JISA you can’t have both. Where is his CTF what’s it invested in and could he add to it or transfer to a JISA? 

LHW99

Savings accounts, with at least some easy access would be best.

If he wants to start to learn about investing, why doesn't he (or you on his behalf) open a virtual protfolio.

Various ones are available, eg

https://www.londonstockexchange.com/personal-investing/tools/virtual-portfolio-and-watchlist

https://research.ii.co.uk/

He could start with an imaginary few hundred, and see what happens over the next couple of years, getting used to the volatility etc.