Where to invest kids money now they're 18?

[stabilio]

Our oldest child has just turned 18 and they have an child's ISA (around £3K) and a child's bank account (around £8k).
We have to move these funds to a different (non child) bank account or similar and the same with the ISA but are unsure where best to move it too for savings and hopefully investments?
Can anyone suggest the best places/banks/ISA etc to move the funds too?
I'd rather have a two or three different places where its invested than chuck it all into one and not have it all tied up for ages in case she needs it at anytime for Uni etc.

[BritishBlitz87]

Vanguard was the traditional choice before the feeling increases. Personally I think it's still worth it for the convenience. You can have multiple funds in one account if you don't want to put all your eggs in one basket.

[POIDH]

How long and for what purpose are they investing?

One of mine is doing very well from LISA's at the moment - but then he is determined to buy his own place and happy to lock the money away to that. He has maxed a LISA for the last 4 years, so is £4k+£1k+interest up each year.

I should say: he is at £21k near enough having deposited 'only' £16k in Lisa.

Edited by POIDH on Thursday 10th July 15:52

[C69]

stabilio said:

I'd rather have a two or three different places where its invested than chuck it all into one and not have it all tied up for ages in case she needs it at anytime for Uni etc.

Any particular reason for wanting to keep it in two or three separate places? While £11k is a nice amount for an 18 y.o., it's well below the FSCS limit. For ease of admin, keeping it in one place is going to be preferable.

While a LISA could be very attractive (because of the government's bonus), it won't be at all suitable because you need ease of access. Similarly, investing it in a S&S ISA should be seen as a longer-term option only.

If you're looking at savings accounts, don't restrict yourself to Cash ISAs. Given where rates are at the moment, the annual interest on £11k is going to be less than the Personal Savings Allowance of £1k (assuming the account holder is a basic rate taxpayer) so there wouldn't be a tax liability.

[stabilio]

C69 said:

Any particular reason for wanting to keep it in two or three separate places? While £11k is a nice amount for an 18 y.o., it's well below the FSCS limit. For ease of admin, keeping it in one place is going to be preferable.

While a LISA could be very attractive (because of the government's bonus), it won't be at all suitable because you need ease of access. Similarly, investing it in a S&S ISA should be seen as a longer-term option only.

If you're looking at savings accounts, don't restrict yourself to Cash ISAs. Given where rates are at the moment, the annual interest on £11k is going to be less than the Personal Savings Allowance of £1k (assuming the account holder is a basic rate taxpayer) so there wouldn't be a tax liability.

By split, I should have said some in bank for instant access if needed and some tied up as investment.
I guess all banks are pretty much the same though with not that great interest rates?

[POIDH]

Moneysavingexpert is your best bet for best savings rates.

I and OH have just had to save £90k for only a year. Between cash ISA's a savings account we will see about 5% in a year - which funnily enough takes us over the £95k mortgage I want to clear....

[C69]

stabilio said:

By split, I should have said some in bank for instant access if needed and some tied up as investment.

Oh I see. Yes, putting some in a fixed-term account is a good idea, if only because it removes the temptation to withdraw and spend it all at once!

stabilio said:

I guess all banks are pretty much the same though with not that great interest rates?

Actually there's quite a broad spread. Just accept that you're unlikely to get the best rates from High Street banks. This is a useful site for comparisons: https://moneyfactscompare.co.uk/savings-accounts/

[c32dave]

Mine are with AJ Bell, which has the advantage of allowing parental access to the account as well (with the adult-child’s permission).

AJ bell calls it “family linking”. There are options for view-only or full dealing access. The interest rates on cash are poor, so you wouldn’t want to use it to hold short-term cash.