Help with money

[Mrsmch123]

Hi, I have an 11 month old and would like to do something with some money each month for him. I have zero clue about this.
i don't want to "take risk" as such and would like it for a nice little deposit for when he's older.

Can someone explain my options.
do I just keep saving it in my bank account?

It won't be a large amount of money at the end of each month as im going back to work part time and have nursery fees. why isn't this the type of stuff they teach you at school🙄
thanks

How much we talking?

that drives everything!

First thought is can’t do better than a junior Isa

Also what is your current financial situation?

So he has around £3000 sitting in a bank account. Then maybe £100 a month going forward?

ISA is a good idea

Financially we have around £80000 in saving but I think we are going to pay of our mortgage with that....

Junior S&S ISA, ours are with Hargreaves Lansdown. Easy to set up and over the length of time you’re talking about a much more sensible thing to do. Cash in your bank account is losing value.

@Mummumtum with a junior ISA do they automatically get access? I want to do something similar for DC but still want an element of control. I know what I was like when I was 18 and wouldn't want them to waste the money (I only want it to be used on education or a home).

@Mummumtum can you explain in reallyyyyyyy dumbed down terms how a ISA works🙈

Yes they do , if they know about it & have passwords etc

there’s a wee video explaining on here, but it works the same way as an adult ISA (except allowance is lower at £9k a year and it’s locked in til they are 18)

www.hl.co.uk/partners/search/jisa?partners=1&theSource=PCHLJ&Override=1&adg=G+HLBJ+JIS+RSA&gclid=CjwKCAjwv-GUBhAzEiwASUMm4ntBgPJhSXp94YzHHOktDJMlnYayeVQnu6LQRXIJDNBhyNtXD108rBoCLyMQAvD_BwE

So what's the benefit of the ISA. When I put in the calculations it showed a potential of an extra £200 on low risk. Doesn't seem that much to just saving it or am I totally missing the point🙈

sorry ment £2000

The benefits are tax free gains & compound interest.

you’re getting best 1% on a savings account which is a loss compared to inflation

id always choose at least medium risk portfolio given its a long term investment, low risk would be very conservative

If you have 3k to start with and put in £100 a month at 1% in 12 years you’d have about £17k

if you do the same in an ISA and it grows 7% a year you’d have £27k after same time period

Right ok starting to see where this is going😁 I don't need to do anything if I put it in an Isa other than deposit the money? If for example I needed the money out could I do this? When it says you may not get back what you put in does that mean I could pay in £100 a month for 17 years and get none of it back at all??

yes, you just deposit the money once it’s all set up

no, you can’t get it back out, it’s locked until 18 (you can transfer to different fund or investment company but you can’t take it out)

in theory, yes you could lose money, history suggests that is very very unlikely over long periods of time so riding out any market dips. You’re investing across a portfolio of stocks/bonds/equities and you’d need all of them to become worthless at once to lose all of your money. Even then you’d still own them so should just wait it out until market recovers from whatever catastrophic event had caused that.

B@Mummumtum ok thanks for that. Would I be better putting £9000 in straight away or does it matter?

You can put in anything up to £9k in a tax year, so I’d put in whatever you have saved for them now then set up a standing order or whatever for the £100 a month to pay in

@Mummumtum thank you for taking time out your day to advise me😬I appreciate it😊

you’re welcome! Really think there should be more education on it in schools etc so hope it was helpful and you find whatever is right for you

What the heck are you doing with the £80k you have in savings if you don’t know about isas (so presumably don’t use!)

Just to say that with a Junior ISA, your DS would become automatically entitled to it at age 18 therefore free to spend it as he wishes. He would also be in control of the investment of it at 16. We have them for our children so not necessarily a bad thing assuming they spend wisely, and probably fine at the saving level you are thinking but with the limit at £9k per tax year, that could be quite a sum to get at 18 if you max it out!!

ISA in this discussion is a Stocks & Shares ISA, not a cash ISA.
ISA is the tax wrapper around the investments inside it. You choose the investments, such as a low cost global equities tracker and over a long period of time that goes up and down in value, reinvesting dividends (accumulation fund does that automatically), giving a return over the long term.