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    • gash
    • By gash 13th Apr 18, 9:01 AM
    • 51Posts
    • 18Thanks
    gash
    Investing 70,000 for a child
    • #1
    • 13th Apr 18, 9:01 AM
    Investing 70,000 for a child 13th Apr 18 at 9:01 AM
    My mother wants to give my daughter 70,000 - part of a recent inheritance she received. What is the best way to invest this for a child? The main issue is the money being safe. I don't want anything high interest where the money may be at risk. She would also be happy with it being tied up for a fixed term, like 5 or 10 years so daughter receives it when she's approx. 18 years old.


    Thanks in advance!
Page 1
    • le loup
    • By le loup 13th Apr 18, 9:13 AM
    • 3,891 Posts
    • 3,923 Thanks
    le loup
    • #2
    • 13th Apr 18, 9:13 AM
    • #2
    • 13th Apr 18, 9:13 AM
    Try NS and I.
    How old is you daughter?
    How old is you mother?
    How is your mothers health.
    • gash
    • By gash 13th Apr 18, 9:20 AM
    • 51 Posts
    • 18 Thanks
    gash
    • #3
    • 13th Apr 18, 9:20 AM
    • #3
    • 13th Apr 18, 9:20 AM
    Try NS and I.
    How old is you daughter?.............. 9
    How old is you mother?........... 70
    How is your mothers health......... Pretty good.
    Originally posted by le loup

    Thanks for the reply!
    • AnotherJoe
    • By AnotherJoe 13th Apr 18, 10:16 AM
    • 11,833 Posts
    • 13,780 Thanks
    AnotherJoe
    • #4
    • 13th Apr 18, 10:16 AM
    • #4
    • 13th Apr 18, 10:16 AM
    The best way is at least some of it in funds/shares because otherwise your mother might as well give daughter 55k in 10 years time (what it will be worth with inflation over say 10 years).

    But then again you didnt want to take any "risk" so the trade off for that is losing 15k for sure.
    • gash
    • By gash 13th Apr 18, 10:22 AM
    • 51 Posts
    • 18 Thanks
    gash
    • #5
    • 13th Apr 18, 10:22 AM
    • #5
    • 13th Apr 18, 10:22 AM
    The best way is at least some of it in funds/shares because otherwise your mother might as well give daughter 55k in 10 years time (what it will be worth with inflation over say 10 years).

    But then again you didnt want to take any "risk" so the trade off for that is losing 15k for sure.
    Originally posted by AnotherJoe

    So what you are saying is if it goes into a high street savings account, 70,000 might end up being 80,000 in 10 years time................but.............based on inflation 80,000 won't be what 80,000 or even 70,000 is today?
    • Wassa123
    • By Wassa123 13th Apr 18, 11:00 AM
    • 364 Posts
    • 174 Thanks
    Wassa123
    • #6
    • 13th Apr 18, 11:00 AM
    • #6
    • 13th Apr 18, 11:00 AM
    Safest: Find a high interest savings/current account.
    Safe: Find some government bonds.
    • sparks6
    • By sparks6 13th Apr 18, 12:49 PM
    • 17 Posts
    • 2 Thanks
    sparks6
    • #7
    • 13th Apr 18, 12:49 PM
    • #7
    • 13th Apr 18, 12:49 PM
    i would save some then spend some to send her to private school, thats also an investment in the child.
    • paulharding150
    • By paulharding150 13th Apr 18, 1:07 PM
    • 101 Posts
    • 101 Thanks
    paulharding150
    • #8
    • 13th Apr 18, 1:07 PM
    • #8
    • 13th Apr 18, 1:07 PM
    Don't let anyone have access to 70,000+ on their 18th Birthday.
    The campaign against overpowering signatures
    • kidmugsy
    • By kidmugsy 13th Apr 18, 1:09 PM
    • 12,187 Posts
    • 8,632 Thanks
    kidmugsy
    • #9
    • 13th Apr 18, 1:09 PM
    • #9
    • 13th Apr 18, 1:09 PM
    If your mother is a wealthy woman suggest she see a lawyer and make the gift by Instrument of Variation. If she does that within two years of the deceased's death the money will be classed for IHT purposes as never having entered her estate.

    In fact it's not too hard to draw up an IoV oneself: there's a useful government site to visit.
    https://www.gov.uk/alter-a-will-after-a-death
    Free the dunston one next time too.
    • kidmugsy
    • By kidmugsy 13th Apr 18, 1:13 PM
    • 12,187 Posts
    • 8,632 Thanks
    kidmugsy
    It used to be not too hard to tie up money beyond age 18: that was swept away by that nice Mr Brown. He was angling for votes from eighteen year olds, I suppose.
    Free the dunston one next time too.
    • gash
    • By gash 13th Apr 18, 1:48 PM
    • 51 Posts
    • 18 Thanks
    gash
    Don't let anyone have access to 70,000+ on their 18th Birthday.
    Originally posted by paulharding150

    Haha, yes I agree. I'll make sure its done in a way I have control to make sure it's not wasted. Maybe a reasonable car at 17, house deposit, university fees etc.
    • gash
    • By gash 13th Apr 18, 1:53 PM
    • 51 Posts
    • 18 Thanks
    gash
    i would save some then spend some to send her to private school, thats also an investment in the child.
    Originally posted by sparks6

    That's a good point. However I would fear that sending a 10 year old (age next school year) to a Private School, with people who have been at Private School for the previous 6 years may be a 'fish out of water' situation. May do more harm than good. To be fair, she goes to the highest ranked Academy School in North East England, so she's already very lucky to have that on her doorstep with no fees.
    • gash
    • By gash 13th Apr 18, 1:56 PM
    • 51 Posts
    • 18 Thanks
    gash
    If your mother is a wealthy woman suggest she see a lawyer and make the gift by Instrument of Variation. If she does that within two years of the deceased's death the money will be classed for IHT purposes as never having entered her estate.

    In fact it's not too hard to draw up an IoV oneself: there's a useful government site to visit.
    https://www.gov.uk/alter-a-will-after-a-death
    Originally posted by kidmugsy

    Thanks. She's not wealthy at all really. Her home and savings etc probably totals a maximum of 300k so I doubt IHT will be a problem. Thanks for the info!
    • CommyTooper
    • By CommyTooper 13th Apr 18, 2:25 PM
    • 55 Posts
    • 72 Thanks
    CommyTooper
    National Savings. Cannot see anything else for now. Very low savings rates.
    • ThePants999
    • By ThePants999 13th Apr 18, 5:00 PM
    • 1,361 Posts
    • 1,759 Thanks
    ThePants999
    Can I just ask: WHY is it important that the money not be at risk?

    Normally, safe investments are recommended where the money has a very specific purpose and it really needs to be that much, or if the timeframe of investment is short, so volatility could have a major impact. So, for example, if you planned to buy a house soon, you should have your deposit somewhere safe to make sure you don't have to pull out of a purchase because of a stock market dip. And people managing their own pension investments tend to move towards safer instruments as they approach retirement.

    But that's simply because "risky" investments fluctuate. The stock market could drop a few percent in a single day, which is a disaster if you need the money tomorrow - but if you hold onto the shares long enough, they'll make it up. Historically, they always have, eventually. And in the long run, they earn you much more than safe investments. So if you're investing over a period like 10 years, without any particular plan for the money at the end, you really should look at higher-return investments. Yes, there's a chance that you wind up with 60,000 instead of 70,000. More likely, though, you'll end up with something more like 110,000 - and a good chance of a fair bit more.
    • gash
    • By gash 13th Apr 18, 5:18 PM
    • 51 Posts
    • 18 Thanks
    gash
    Can I just ask: WHY is it important that the money not be at risk?

    Normally, safe investments are recommended where the money has a very specific purpose and it really needs to be that much, or if the timeframe of investment is short, so volatility could have a major impact. So, for example, if you planned to buy a house soon, you should have your deposit somewhere safe to make sure you don't have to pull out of a purchase because of a stock market dip. And people managing their own pension investments tend to move towards safer instruments as they approach retirement.

    But that's simply because "risky" investments fluctuate. The stock market could drop a few percent in a single day, which is a disaster if you need the money tomorrow - but if you hold onto the shares long enough, they'll make it up. Historically, they always have, eventually. And in the long run, they earn you much more than safe investments. So if you're investing over a period like 10 years, without any particular plan for the money at the end, you really should look at higher-return investments. Yes, there's a chance that you wind up with 60,000 instead of 70,000. More likely, though, you'll end up with something more like 110,000 - and a good chance of a fair bit more.
    Originally posted by ThePants999

    Hi. Thanks for the response. It is something I will consider. But if I'm honest, my ex wife, my daughters mother, is aware of the 70k being given to our daughter (in my care), and if I managed to lose some of it, I'd never hear the end of it and probably have to make the shortfall up myself.


    However, I do get your point about a long term investment being fairly 'safe' when the money isn't needed next week, or even next year.


    Thanks again.
    • ValiantSon
    • By ValiantSon 13th Apr 18, 6:32 PM
    • 2,536 Posts
    • 2,525 Thanks
    ValiantSon
    Hi. Thanks for the response. It is something I will consider. But if I'm honest, my ex wife, my daughters mother, is aware of the 70k being given to our daughter (in my care), and if I managed to lose some of it, I'd never hear the end of it and probably have to make the shortfall up myself.


    However, I do get your point about a long term investment being fairly 'safe' when the money isn't needed next week, or even next year.


    Thanks again.
    Originally posted by gash
    How would your ex-wife know what the value of any investments were? She would have no right to that information.
    • ValiantSon
    • By ValiantSon 13th Apr 18, 6:36 PM
    • 2,536 Posts
    • 2,525 Thanks
    ValiantSon
    National Savings. Cannot see anything else for now. Very low savings rates.
    Originally posted by CommyTooper
    i would save some then spend some to send her to private school, thats also an investment in the child.
    Originally posted by sparks6
    70,000 wouldn't be enough to cover seven years (assuming the OP's daughter went at 11). Current fees for a day school will be well in excess of 10,000 p.a. (the cheapest are around 11,500) and these will rise every year.
    • steampowered
    • By steampowered 13th Apr 18, 8:44 PM
    • 2,948 Posts
    • 2,927 Thanks
    steampowered
    If the money isn't needed for 5-10 years, put it into a stocks and shares fund.

    It would be most unwise to keep the money in cash savings if access is not needed for 5-10 years.

    Refusing to take "any risk" is an extremely short term view that makes no sense when you are saving for the long term.

    You cannot avoid taking risk. You either take investment risk (i.e. shares fluctuate up and down in the short term, with good returns over time) or you take inflation risk (which is a much bigger risk over the long term).
    • gash
    • By gash 13th Apr 18, 8:51 PM
    • 51 Posts
    • 18 Thanks
    gash
    All good points ValiantSon, and steampowered. I will have a good think about being a bit more adventurous :-)
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