Is it really this easy to create rich children (or at least very well off)??

jackieblack

Plus the child has to be willing to stay living at home, paying 2/3 of their take home pay (from their minimum wage job) into an ISA

solidpro

Basically. "if you give your kid £162,000 by the age of 18, it will more than double over the course of 30 years"

I'm not sure thats the definition of a 'life hack' but I guess it's a thread on here.

arfster

This very fortunate junior would also have funds to fill their LISA (or whatever replaces it), further multiplying the pot.

JSIPP is another option, even as a child they get pension tax relief on contributions up to 2880/year. It's not a huge amount but given 60 odd years to compound …..

Exodi

It is that simple, however you've over-egged it by making the common mistake of ignoring the gargantuan effect of inflation.

That's not to say you won't still get a big number, but it certainly looks a bit less impressive using a real rate of return of say 4% instead of a nominal rate of 7%.

CPI/CPIH over the last ~35 years averages around 3% FYI.

NoMoneyNoWorries

They now create their own adult stocks and shares ISA - transfer the JISA which terminates at 18 - get even a minimum wage job - which will give them a take home pay of at least £1500 and the child now takeover paying £1000 into their S&S ISA for the next 12 years (from age 18 to 30). -

JISA's automatically turn into the relevant ISA when the child turns 18 so nothing to do their end, but the real point I wanted to make is on the second half of your paragraph, I think it's incredibly *ahem* optimistic!

QrizB

https://forums.moneysavingexpert.com/discussion/comment/82139251#Comment_82139251

"Wealthy parents who give their kids money leads to wealthy children" shouldn't really surprise anyone.

See also eg. the works of Jane Austen.

talexuser

I'd like to know which percentile of the population has £9000 or £18000 a year spare to their own income/outgoings/savings to put in their childs ISA. I guess it might well be into the top 10%?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82139769#Comment_82139769

Probably, and if they had any sense they would instead be feeding their own pension and getting 40% tax relief.

Their children will see the benefit from this anyway, as they will see their parents retire early on a good income, and probably support them with gifts.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82139913#Comment_82139913

People who have the sort of money to fully fund their offspring's JISA are probably concerned with inheritance tax, offloading while young will hopefully reduce the IHT bill, whereas pensions fall within estates from April 2027.

Eco_Miser

https://forums.moneysavingexpert.com/discussion/comment/82139913#Comment_82139913

They may already be putting £60k into their pensions.

TheBanker

I see two flaws in this plan.

The first is I can't imagine many 18 - 30 year olds will be happy living with their parents with just £500 to spend each month. After food (unless the parents pay for this), travel costs to their minimum wage job, clothes etc are paid for it does not leave a lot for hobbies or social life.

The second is when the child gets to 30, buys their house in cash and has their own child - how do they fund that child's JISA contributions? If they are working a minimum wage job still, they can't.

When I was at uni, I had a mate who had a "Life hack" plan. He was going to graduate, get a well paid graduate job/career, but continue to live as though he was a student - room in a shared house, cheap food, no car… The plan was to do that for 10 years, save every penny of surplus income and retire somewhere around age 30.

I think that plan lasted about three months after we graduated, then he got a girlfriend (now wife). Two decades later he's still working (in a job he likes), still paying off his mortgage, and his savings are directed towards helping his own teenage son through uni…