My 16 year old just won £100,000 on Premium Bonds, what to do?

ZeroSum

aroominyork said:

Anyone thinking of starting a Lifetime ISA might want to wait and see what comes out of the select committee's review https://committees.parliament.uk/committee/158/treasury-committee/news/204592/is-the-lifetime-isa-fit-for-purpose-in-2025-committee-calls-for-evidence/

If they abolish it then you'll either be able to keep accrued benefits or move into new product. If they change the allowances & limits then again what you've accrued to date won't be affected. If you're young & looking to buy a house (unless you're a wealthy londoner) then you should still take one whilst they're available to get the free money.

daveyjp

aroominyork said:

Anyone thinking of starting a Lifetime ISA might want to wait and see what comes out of the select committee's review https://committees.parliament.uk/committee/158/treasury-committee/news/204592/is-the-lifetime-isa-fit-for-purpose-in-2025-committee-calls-for-evidence/

I wouldn't base an investment decision on what might happen.  

Government can ignore recommendations, water them down, kick them into the long grass. Take advantage of what is available now and if things change you then review.

Dazed_and_C0nfused

poseidon1 said:

Keep_pedalling said:

Please remember this is her money, so I don’t think she should be making irreversible decisions like locking money away for 40+ years in a pension until she has a full understanding of what she is doing.  

No fear of that. Presumably with no meaningful earned income she can only invest £2880 annually at the moment.

Possibly the best of both worlds at the moment.

Foot on the pension ladder with £720 free money from the government each year without it being allowed to eat into significant amounts of the win.

With a sensible investment choice and a fair wind £2,880 added (net) for even just the next 3-5 years will be a welcome resource come retirement time.

Rt90

What a result! To get that at 16 is amazing. The sooner you get some money behind you the longer it can work for you.
 I suppose a first step could be to work out what your daughter wants to use that money for. That would give you a timeframe of when she needs to access it so it can be put in the appropriate place.
Great story.

eskbanker

ZeroSum said:

aroominyork said:

Anyone thinking of starting a Lifetime ISA might want to wait and see what comes out of the select committee's review https://committees.parliament.uk/committee/158/treasury-committee/news/204592/is-the-lifetime-isa-fit-for-purpose-in-2025-committee-calls-for-evidence/

If they abolish it then you'll either be able to keep accrued benefits or move into new product. If they change the allowances & limits then again what you've accrued to date won't be affected. If you're young & looking to buy a house (unless you're a wealthy londoner) then you should still take one whilst they're available to get the free money.

Nobody can be certain about how abolition or significant change would be structured, but to reiterate, OP's daughter is only 16 and can't open one for at least a year anyway....

jimjames

Roger175 said:

I would also caution against the pension for someone this young for many of the same reasons stated above.
 housing deposit.

For £2880 out of £100k I really can't see a reason to not do a pension. With 40 years compounding it will be a very effective use of a small part.

boingy

"What to do?", you ask.
Start charging them rent. That will teach them the value of money  ;p

Angelica123

Roger175 said:

I would also caution against the pension for someone this young for many of the same reasons stated above.

Back in the 00's when everything seemed very rosy, we started pensions for out 3 boys, they were still school kids back then and it seemed like a good idea at the time, but as they've grown up and developed careers, it has become fairly obvious that they will be sorting out their own pensions (all in good jobs, one a doctor, one a teacher and one an engineer), furthermore, unless we've totally miscalculated, they stand to inherit a substantial sum each from us and other relatives. The money now sitting in those SIPP pensions which we started for them, would have been far more useful as a house deposit. OK, they've managed and have all got on the housing ladder, but that extra money would have been be so much more useful put towards the housing deposit.

True. But they are also in high pressure jobs that are associated with burnout. They can access SIPP certainly before teacher or doctor pension - it may give them the flexibility to cut down hours or retire earlier. It's a longer term benefit but still invaluable. After all they may retire before they get their inheritances given how life expectancy keeps increasing. 

I think the best financial planning involves both safeguarding the future and maximising the present. It doesn't need to be either/or. I personally think splitting the money between pension, medium goals such as house deposits and then some fun money (eg travelling in your 20s in such a different experience to travelling when you are older). 

nottsphil

I can't believe that nobody has suggested that the first priority is to get on the property ladder. They could be receiving rent until they are ready to move in themselves, hopefully before any right to rent-for-life act is passed.

waveneygnome

OP - not sure if you have said, but do you only have the 1 child?

(I would be worrried about the effect on siblings - we have saved into PB's for our teenage children, and there is an unwritten rule that if any of them win BIG.....its has to be shared)