Long term investment for grandchild
Discussion
My daughter has just had her first baby and I would like to invest some money for my grandchild which he can have when he is eighteen. What sort of investment would be good for a longer term. I'm thinking maybe something in stocks and shares which could produce a higher return rather than a post office savings. Any information would be great, thanks.
Speedyman
Speedyman
With doubts on the future of Child Trust Funds, are these still worth lookign at? I ask, as we've just had our first, and opened an account with the £250 you get. I'm not intending to put any more money in it, and I have opened a separate savings account so I have control over this chunk of money it when she is 18 too.
My god mother opened a post office account for me. I think she put in 10 for christmas and 20 for birthdays. About ten years ago that came to double what she had put in and paid for my driving lessons, test and licence. It was something like £1200.
I believe you can also buy children bonds in the post office valuing at different amounts (25/50/100) with a maximum of £5000 per child. used to be a good long term investment....
Phooey said:
I drip £100 per month into the HSBC stakeholder CTF - have been doing so since we opened it in April 2009. I will check how it's doing 
Ok, a few facts and figures from our experience so far of the HSBC CTF - HSBC Stakeholder CTF (UK Growth & Income Fund)
Opened - April 2009
Payments in to date - £2550 (including the £250 voucher. Thank you Mr Brown
)Valuation as of today - £2777.
Now i have no idea if this is a good or bad investment so far considering the current climate. Maybe someone with more financial sense could comment?
Welshbeef said:
Can you pay into a private pension fund for a grandchild or anyone your related to ie child.
I'd certainly look into doing this along with other things too if affordable and provided our retirement is covered off too
Yes you can.I'd certainly look into doing this along with other things too if affordable and provided our retirement is covered off too
The private (or personal) pension plan would be issued in the name of the grandchild and you would be classed as the third party payer (and would need to complete relevant money laundering documentation).
There are (usually) minimum levels of contributions into these types of policies.
For example £100 per month/£1,000 per annum/£2,500 single/£5,000 transfer.
http://www.direct.gov.uk/en/Dl1/Directories/DG_100...
http://www.retirementexpert.co.uk/setting-up-savin...
Edited by RESSE on Friday 20th August 16:12
Edited by RESSE on Friday 20th August 16:15
Article about starting pensions for children, allowing more to be saved than via Child Trust Funds...
http://www.telegraph.co.uk/finance/personalfinance...
http://www.telegraph.co.uk/finance/personalfinance...
Edited by bouffy on Friday 20th August 16:18
Pensions are one of the very best things you can buy for a kid- yes there are charges year on year but imagine getting basic rate tax being added back in straight away (so you have more in that you started with), and a (probably) low-ish risk diversified investment growing for possibly 55 years...
The problem being the OP wants the child to have it at 18.
The problem being the OP wants the child to have it at 18.
TVR Moneypit said:
got about 3.5k to chuck into something at the moment, and looking to add around 5k pa. Personally, I'd like to leave it in for 25 years, although I do like the idea of splitting it between a CTF and a pension?
Alrhough college fees uni fees deposit for house are all important. For me I just think 18yo some can be quite wastefull blow it where as say 25 post uni might be a better bet ? Of course pension is locked away and will really help them out in the future.
Difficult call. One thing those saying you get 20% back instantly well you will not he's not earning or paying any tax so it's going in gross anyway. You paying in net doesn't mean he can claim back the tax you have paid. Unless I'm very mistaken.
you're mistaken...anyone can claim tax relife at basic rate upto £3600 pa of gross contributions.
so pay £80 into a pension for a kid and it becomes £100...that said, he wont be able to touch it till AT LEAST 55 (and in 55 years it could well be higher) and when he does it will be taxable income so that 20% (or whatever the future tax rate will be) will be (in part) paid back.
so pay £80 into a pension for a kid and it becomes £100...that said, he wont be able to touch it till AT LEAST 55 (and in 55 years it could well be higher) and when he does it will be taxable income so that 20% (or whatever the future tax rate will be) will be (in part) paid back.
Tiggsy said:
you're mistaken...anyone can claim tax relife at basic rate upto £3600 pa of gross contributions.
so pay £80 into a pension for a kid and it becomes £100...that said, he wont be able to touch it till AT LEAST 55 (and in 55 years it could well be higher) and when he does it will be taxable income so that 20% (or whatever the future tax rate will be) will be (in part) paid back.
To clarify that's £3600 maximum per child. The other thing to note is that pensions do not attract CGT and you can take a tax free lump sum at 55 ( I think up to 25% of the pension pot)...well the latter being an assumption as who knows what legislation will be like then. so pay £80 into a pension for a kid and it becomes £100...that said, he wont be able to touch it till AT LEAST 55 (and in 55 years it could well be higher) and when he does it will be taxable income so that 20% (or whatever the future tax rate will be) will be (in part) paid back.
Beardy10 said:
Child Trust Fund's all seem to have 5% fees ? Has anyone found one with lower fees that also gives you a good choice of funds.
I opened a SIPP for my son as well as a CTF....yes he can't get it when he's 18 but it will ease a financial burden when he does start working.
Selftrade I opened a SIPP for my son as well as a CTF....yes he can't get it when he's 18 but it will ease a financial burden when he does start working.
http://www.selftrade.co.uk/services/children/child...
NoelWatson said:
Beardy10 said:
Child Trust Fund's all seem to have 5% fees ? Has anyone found one with lower fees that also gives you a good choice of funds.
I opened a SIPP for my son as well as a CTF....yes he can't get it when he's 18 but it will ease a financial burden when he does start working.
Selftrade I opened a SIPP for my son as well as a CTF....yes he can't get it when he's 18 but it will ease a financial burden when he does start working.
http://www.selftrade.co.uk/services/children/child...
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