Investing Monthly for new Grandchild.

[CheltenhamLady]

Our first grandchild is due in September this year.

We want to invest a monthly amount for the child, to be handed over at age 25.

Any ideas of the best vehicle to do this?

We will also ask our IFA but I wondered if anyone on here had any advice/experience to offer?

No advice but just to say that my DPs did this for my ds1 (I think they paid £25pcm) and he got £7k at 18. It is such a help, I'm just praying that he is sensible with it! I think 25 is a better age.

I would put it into a unit trust or similar. For that length of time stocks and shares are the way forward (as the growth a better over the longer term). One that tracks one of the main indices will be less risky than a more narrow field of investment.

How about a LISA for their first property purchase if you’re trying to avoid it being pissed up the wall, which it sounds like you are if you want to ringfence it until 25.

Have a look at fidelity as there aren’t any platform fees on childrens accounts.

I’ve heard a lot of people advocating setting up pensions for young children. It’s “boring” but will be an amazing investment into their long term future with the compound interest over potentially 50-60 years. They can start paying into it themselves as soon as they are earning and because it has been started at a young age the % of their salary they need to pay in is much smaller (general advice is whatever your age when you open your pension, halve it and that is the % of your salary you should pay in - so I was 22 when I opened my pension so aim to pay 11% in).

If you want something that will benefit them more at a younger age then a stocks and shares ISA or similar will be good just remember that for some “child” accounts the money will be accessible once they turn 16/18. Just consider whether a 16/18yo is likely to be responsible with a decent sized sum of money!

Good idea to talk to your IFA as they’ll be able to tell you about trusts, etc that you can lock until they’re a certain age.

I think it depends on how much money you are talking and what your own tax situation is.

I can't think of any suitable ready made vechicles. Children's ISAs can be withdrawn from at 18, pensions can't be taken until 55 and LISAs can't be set up for children.

You could set up a trust but I would think that would be quite expensive. If you are below the IHT threshold, it might make sense to save in your own name and give at 25.

I would also save in your own name and gift at 25. We are just about to do the same for our DC and use a Stocks and Shares ISA that we keep control of so we can decide when to gift the money.