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Investing £5k for young DCs. Where to start?

(13 Posts)
SpaghettiMeatballs Tue 16-Jun-15 21:54:59

My DCs are 3 and 1. I've just looked in their passbooks and the eldest has nearly £5k sitting in a no interest account. The youngest is catching up.

I want to invest this money properly so it doesn't disappear with inflation. I can afford to leave it for the long term so until they are at least 18.

Does anyone have a junior stocks and shares ISA and how did you choose it?

I'm finding this much harder than managing my money. I'd be devestated if I made the wrong investment choice for my DCs.

Stubbed Tue 16-Jun-15 21:59:53

Halifax equity ISA? I asked a financial advisor and he said it was as good as any but easy to manage

morethanpotatoprints Tue 16-Jun-15 22:08:11

I didn't do the stocks and shares because I don't like risk. I know its only me but if it has the small print warning of "you can get less than you put in" which is pretty much all of them i stay well clear.
I know I could probably end up with more but won't risk it.
I have saved for all of ours and the eldest are grown up now and had theirs a few years ago.
I took advantage of paying more in when interest rates were higher and was prepared to swop and change ISA accounts to benefit from better rates when they were offered. I kept some aside and bought them premium bonds which if you hit the magic figure can give quite a good return.

Lovepancakes Tue 16-Jun-15 22:10:33

It'll only help for a bit of it but we're paying in £100/ month (this was the max allowed per child) to a Halifax children's account with 6% interest.

SpaghettiMeatballs Tue 16-Jun-15 22:40:25

Thank you Stubbed. I'll check that out. I've just been looking at the HSBC very low risk product which seems similar. I need to compare the charges really.

That's a thought lovepancakes as that would give me longer to think about things as I believe that rate is for a year.

I know exactly what you mean morethanpotatoprints but interest rates are so far behind inflation now I can't help but worry they will definitely lose money if I do nothing against probably not losing money if I invest for them. It is a risk though.

specialsubject Wed 17-Jun-15 11:47:03

over that period of time it will be destroyed by inflation. you have to put it in the stock market where there is a chance of it growing.

the Greek crisis is making the UK market drop somewhat so now is a good time. Tomorrow could be better, or worse. smile

SpaghettiMeatballs Wed 17-Jun-15 14:58:17

That is my feeling specialsubject. I was looking at the performance of some HSBC low risk funds last night and they doubled their value across the 15 years DD's would be in for. There is no way cash savings could achieve anywhere near that for them.

I'm attracted to the ISA format as it's easy to put more in as and when I have built up small lump sums.

HeadDreamer Wed 17-Jun-15 15:01:06

I put them in my stock and shares ISA. I tend to buy tracker funds so I don't have to keep tap on star managers going and leaving. I have bought UK, US, Europe and Pacific ones. No one can give you advice which would have the best returns. But over the last 10 years, it definitely beat cash savings.

whooshbangprettycolours Wed 17-Jun-15 19:47:24

low cost trackers across various markets will do exactly what HeadDreamer says, add value using the market not using some wonder boy who is overpaid.

If you manage when you take the money out (think of an 18 month window, not a set date) is likely to produce better than average results and beat any cash account hands down.

SpaghettiMeatballs Thu 18-Jun-15 06:51:10

That's the only part of the JISA I don't like whoosh. It has to transfer at 18 and is locked until then. I agree you ordinarily choose the best point to cash in.

We couldn't cash it in if the product had achieved what appeared to be a high when DC was, say, 17.5.

I think a low cost tracker seems the way forward. Found one from Legal and General that looks good.

Only1scoop Thu 18-Jun-15 06:57:08

If you bank with Lloyds their children's savings and ISA gets 3 percent.

whooshbangprettycolours Thu 18-Jun-15 09:10:32

L&G are good at tracking, they try and add a bit to the gig so their costs aren't the lowest.

The funds transfer to the child, but not out of the investment. Part of the education for the DC's is that they must be aware if they want to 'blow the lot' they'd be minded to wait for the right time and blow even more!

ipadmad Sun 21-Jun-15 21:04:55

My Ds's is in a Junior Stocks and Shares ISA. I've invested partly in trackers (UK and US), some gilts/bonds and then some managed funds where it makes sense to do. I'd rather not have 100% in trackers as in the event of a stock market crash, the impact can't be managed.

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