What's best for daughter's future?
Discussion
username_checksout said:
Through some unexpected inheritance I'll have a nice lump sum of around £60k that I want to save for my daughter (13).
Where would you be inclined to put the money so it's seeing a little interest or return, between now and when she turns 18/21?
No not really, I'd put it in a low fee index tracker. HL or Vanguard something like that. Where would you be inclined to put the money so it's seeing a little interest or return, between now and when she turns 18/21?
Or maybe half in the bank and half on a fund if you are feeling more cautious.
https://www.hl.co.uk/funds/index-tracker-funds
I like their ready made investments - also seem to be decent value.
Spidersleg said:
Childs ISA and premium bonds ? Depends on your financial circumstances/tax implications as to whether it goes in your name or her name and if you really want her to have £60k+ at 18.
I'm veering towards 21. I know what 18 year olds are like, having spaffed away a small inheritance myself at a similar age. It was fun though, no regrets.Edited by username_checksout on Friday 9th May 11:45
This is a bit pertinent to me
My son will start secondary school in Sept 27, I've got year one of the fees set aside in a cash ISA, so I've got till Sept 28 to start putting away the money for the following years, I did a little forecast, I need to start now putting away £1000.
Shares or cash?
My son will start secondary school in Sept 27, I've got year one of the fees set aside in a cash ISA, so I've got till Sept 28 to start putting away the money for the following years, I did a little forecast, I need to start now putting away £1000.
Shares or cash?
i'd open an isa for her ( ie/ kids isa) and stick teh rest into a GIA; in her name with her own bank account linked. i'd keep hold of the passwords and tinker with whichever investments; any CGT is then a sep issue - ie/ she'd have to report / pay gains in the usual way, but keeps it cleaner that muddying with your own stuff.
as to 'what' depends on how fixated the 18/21 is, as that will play into risk curve. Nice sum of money to have, shame to just pick up pennies on interest rate denominated funds.
My daughter was giving a chunk of change when she was 21 by a relative and annoyingly she wouldn't do anything apart from stick it in the bank, wasted 6 years before she finally decided to get a stocks/shares isa.
dunno what i'd do now if i was advising a mate, probs to stick the major chunk in a tracker, likely SP500 and to grab 10k's worth of something that has strong chance of mooning and making a bigger material difference
worst ways she'd still have circa 60k, best case has waaaay more.
8 yrs is long enough for various hot topics to play out (or fail)......
at the risk of loads of 'judgey' comments - tsla if the 'bots, taxi's,energy come on stream as expected has the potential to do a 6-10x in 8-9yrs, btc given current sentiment could do similar. depends whether on behalf of yoru daughter you play it totally safe or take a calculated position with a % - one that could give a bigger hand up the ladder of life.
whatever i did, i'd keep it sep though.....and if it was the GIA route, i'd pull out 20k per annum and stick it into an isa....who knows, she might look at that when you hand over the passwords and think that it's worth keeping in there growing nicely tax free.
as to 'what' depends on how fixated the 18/21 is, as that will play into risk curve. Nice sum of money to have, shame to just pick up pennies on interest rate denominated funds.
My daughter was giving a chunk of change when she was 21 by a relative and annoyingly she wouldn't do anything apart from stick it in the bank, wasted 6 years before she finally decided to get a stocks/shares isa.
dunno what i'd do now if i was advising a mate, probs to stick the major chunk in a tracker, likely SP500 and to grab 10k's worth of something that has strong chance of mooning and making a bigger material difference
worst ways she'd still have circa 60k, best case has waaaay more.
8 yrs is long enough for various hot topics to play out (or fail)......
at the risk of loads of 'judgey' comments - tsla if the 'bots, taxi's,energy come on stream as expected has the potential to do a 6-10x in 8-9yrs, btc given current sentiment could do similar. depends whether on behalf of yoru daughter you play it totally safe or take a calculated position with a % - one that could give a bigger hand up the ladder of life.
whatever i did, i'd keep it sep though.....and if it was the GIA route, i'd pull out 20k per annum and stick it into an isa....who knows, she might look at that when you hand over the passwords and think that it's worth keeping in there growing nicely tax free.
For those suggesting a Child's ISA, I disagree that this is the best 'option'.
It puts the money in a place that the child gets full control at age 18 - this may be what you want to do but it's probably not and even the most sensible child age 10 might make the wrong choice age 18.
I think the only times a childrens ISA makes sense is either
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
If it was me, I'd be maximising mine / my wife's ISA over a couple of years and putting it in a global-ish fund (pick your poison). If you want to balance the risk, then there are various 'lifestyle' type funds wth a bond component built in, or you could make use of the short term money funds for less risk.
Leave it to grow for the 8-10 years and when the time comes make the gift for the reason that you approve of rather than see it get spunked on a souped up fiesta and a lifetime trip to thailand for them and their mates.....
It puts the money in a place that the child gets full control at age 18 - this may be what you want to do but it's probably not and even the most sensible child age 10 might make the wrong choice age 18.
I think the only times a childrens ISA makes sense is either
- when the child directly receives the inheritance,
- if you & the other parent have maximised your own ISAs first,
- you think you might live 7 years but not much more and you have a potential IHT problem....
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
If it was me, I'd be maximising mine / my wife's ISA over a couple of years and putting it in a global-ish fund (pick your poison). If you want to balance the risk, then there are various 'lifestyle' type funds wth a bond component built in, or you could make use of the short term money funds for less risk.
Leave it to grow for the 8-10 years and when the time comes make the gift for the reason that you approve of rather than see it get spunked on a souped up fiesta and a lifetime trip to thailand for them and their mates.....
fat80b said:
For those suggesting a Child's ISA, I disagree that this is the best 'option'.
It puts the money in a place that the child gets full control at age 18 - this may be what you want to do but it's probably not and even the most sensible child age 10 might make the wrong choice age 18.
I think the only times a childrens ISA makes sense is either
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
If it was me, I'd be maximising mine / my wife's ISA over a couple of years and putting it in a global-ish fund (pick your poison). If you want to balance the risk, then there are various 'lifestyle' type funds wth a bond component built in, or you could make use of the short term money funds for less risk.
Leave it to grow for the 8-10 years and when the time comes make the gift for the reason that you approve of rather than see it get spunked on a souped up fiesta and a lifetime trip to thailand for them and their mates.....
I think that is excellent advice.It puts the money in a place that the child gets full control at age 18 - this may be what you want to do but it's probably not and even the most sensible child age 10 might make the wrong choice age 18.
I think the only times a childrens ISA makes sense is either
- when the child directly receives the inheritance,
- if you & the other parent have maximised your own ISAs first,
- you think you might live 7 years but not much more and you have a potential IHT problem....
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
If it was me, I'd be maximising mine / my wife's ISA over a couple of years and putting it in a global-ish fund (pick your poison). If you want to balance the risk, then there are various 'lifestyle' type funds wth a bond component built in, or you could make use of the short term money funds for less risk.
Leave it to grow for the 8-10 years and when the time comes make the gift for the reason that you approve of rather than see it get spunked on a souped up fiesta and a lifetime trip to thailand for them and their mates.....
The other thing is to build up your offspring to understand money…..ours had a Santander account from about 10(ish)…started as a simple savings one, then added a card they could get small amounts out on, became a full account and got them their free railcard at Uni.
They hankered after some Superdry gear (‘cos friends had them). Helped build a monthly savings, so they could buy it themselves after a few months….then when it was their own money they would be spending, they suddenly decided it wasn’t worth it
Back that up by talking about money….once 18, get started with small regular LISA (& ISA), etc….hopefully they will grow to be functioning adults who don’t spaff it all on crap!
fat80b said:
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
….when the time comes make the gift for the reason that you approve of rather than see it get spunked ....
Taking these bits out as for me & what I’ve seen it’s very sound advice.….when the time comes make the gift for the reason that you approve of rather than see it get spunked ....
You don’t yet know how financially savvy your kid is or future earning potential.
I’d give the example of how much your child might want to spend on a dream wedding / holidays v house deposit. Every kid would likely have different opinions, look at how you are thinking about treating this money now versus how you would’ve potentially looked at it 25years ago.
Don’t know your own financial situation or if this money would make a difference to your lifestyle, but if not already doing things like family holidays I’d suggest creating a family memory with at least a little bit of it & squirrel the rest to help them with their decisions in later life (after they’ve made them not before)
AndyAudi said:
fat80b said:
If you want to save and invest it for the child's future, there is a benefit to doing it in your name (i.e. your ISAs) which is that you get to choose how it is spent.
….when the time comes make the gift for the reason that you approve of rather than see it get spunked ....
Taking these bits out as for me & what I’ve seen it’s very sound advice.….when the time comes make the gift for the reason that you approve of rather than see it get spunked ....
You don’t yet know how financially savvy your kid is or future earning potential.
I’d give the example of how much your child might want to spend on a dream wedding / holidays v house deposit. Every kid would likely have different opinions, look at how you are thinking about treating this money now versus how you would’ve potentially looked at it 25years ago.
Don’t know your own financial situation or if this money would make a difference to your lifestyle, but if not already doing things like family holidays I’d suggest creating a family memory with at least a little bit of it & squirrel the rest to help them with their decisions in later life (after they’ve made them not before)
A wedding would delay my retirement by a year or 2.
Mind you divorce might delay it by 5 years.
Fund such as Fidelity Global Dividend (actively managed) or low cost passive global tracker such as Vanguard Ftse Global all cap etf Fidelity Index World or HSBC All world or L and G Int index trust.
Low cost trackers charge between 0.08% and 0.23% with between 1.31% and 1.51% annual yield.
Low cost trackers charge between 0.08% and 0.23% with between 1.31% and 1.51% annual yield.
k working until 70+Heres what I would do -
£9000 into a junior isa, low cost worldwide tracker.
This will be with them when 18 / if they spend it on a car or whatever lets say they loose £11k (due to going up in value) - thats better than loosing all of it.
Rest - well whats going to stop them at 21 spending it on crap?
Putting it this way in a pistonheads way - and I regret not doing this!
At 18 how much is car insurance - tonnes - how much would car insurance be when 21? More likely to go out and get a expensive car at 21 than 18.
19 I bought a house, due to 2008 financial crisis, I made 10k profit (bought in 2003 - got into debt due to it). Ironically at the time around 2003 - i was looking at a bmw M3 - but insurance costs were tonnes, it would take up 50% of my take home pay (was living with mum and dad) and decided, no - I will use the 14k I was going to use for the bmw - 10k down payment, 4k cover insurance etc as a 10% house deposit. Do the sensible thing - houses don't go down in value right?
Long story short - sometimes, they have to spend a bit of money to appreciate it - or cock up, and learn.
I would ratehr them loose £9k than all of it, and any parent would. My best advice to anyone would be to travel, wish I did instead of buying a house and doing the sensible thing.
I love travel now - but its hardwork with kids as they have to be considered - hence the boys driving holiday to do the stuff I want to do.
£9000 into a junior isa, low cost worldwide tracker.
This will be with them when 18 / if they spend it on a car or whatever lets say they loose £11k (due to going up in value) - thats better than loosing all of it.
Rest - well whats going to stop them at 21 spending it on crap?
Putting it this way in a pistonheads way - and I regret not doing this!
At 18 how much is car insurance - tonnes - how much would car insurance be when 21? More likely to go out and get a expensive car at 21 than 18.
19 I bought a house, due to 2008 financial crisis, I made 10k profit (bought in 2003 - got into debt due to it). Ironically at the time around 2003 - i was looking at a bmw M3 - but insurance costs were tonnes, it would take up 50% of my take home pay (was living with mum and dad) and decided, no - I will use the 14k I was going to use for the bmw - 10k down payment, 4k cover insurance etc as a 10% house deposit. Do the sensible thing - houses don't go down in value right?
Long story short - sometimes, they have to spend a bit of money to appreciate it - or cock up, and learn.
I would ratehr them loose £9k than all of it, and any parent would. My best advice to anyone would be to travel, wish I did instead of buying a house and doing the sensible thing.
I love travel now - but its hardwork with kids as they have to be considered - hence the boys driving holiday to do the stuff I want to do.
Thanks for all the replies. I'll have to do some swotting up on some of the terms and products mentioned as this is a whole new arena for me.
To the poster who mentioned holidays and memories; good call - that is actually what I've started to do.
To add: when one of her current grandmothers dies (her grandad passed away a few years ago), she's been left half their house. At current market value that's approx £350k heading her way as well.
I just want her to have a great start into adult life, and hope she recognises and appreciates the fortunate position she'll be in. The way things are going I hope she's able to avoid the worst of what society seems to be heading towards.
To the poster who mentioned holidays and memories; good call - that is actually what I've started to do.
To add: when one of her current grandmothers dies (her grandad passed away a few years ago), she's been left half their house. At current market value that's approx £350k heading her way as well.
I just want her to have a great start into adult life, and hope she recognises and appreciates the fortunate position she'll be in. The way things are going I hope she's able to avoid the worst of what society seems to be heading towards.
It's a bit boring, but I'd consider using some of the money to open a Junior SIPP for her.
As things stand at the moment, you can pay in a maximum of £2,880 each year and the government will automatically add £720 (which is basic-rate tax relief). Regarding how to invest the SIPP cash, I'd just keep it simple and pick a low-cost global equities tracker fund.
This would also have the benefit of gradually transferring the inheritance into her name.
As things stand at the moment, you can pay in a maximum of £2,880 each year and the government will automatically add £720 (which is basic-rate tax relief). Regarding how to invest the SIPP cash, I'd just keep it simple and pick a low-cost global equities tracker fund.
This would also have the benefit of gradually transferring the inheritance into her name.
Gassing Station | Finance | Top of Page | What's New | My Stuff