Small investment for children

[Chestnutsroastgreen]

Am in the lovely situation of having £3,000 to invest for my niece and nephew until they are 18. So 4 years and 7 years to go.

feel responsible on getting the best outcome for them.

any suggestions on what might be best to do.

Do you want the money in their name or your name?

Do they already have existing investments such as a Junior ISA?

i would buy premium bonds, they are easy to do, have good returns and are fairly low risk

It can be either but t be given to them aged 18 if that helps

They have a Junior ISA already but don’t have S&S one

You could use your ISA allowance to save for them, and could have a S&S ISA. Money is in your name, you decide when you Gift it to them. At that point, it is a PET (Potentially Exempt Transfer) for inheritance tax purposes... a gift from you to them, so keep a note of the date, amount, so should you die within 7 years of making the gift, the executor of your estate can deal with the PET.

They already have a Junior ISA, so the custodian of that could change it from Cash ISA to S&S ISA. Given the timescale for their ages that would be sensible in my view. You can then add to that Junior ISA, assuming you have the custodians consent. Money is in their name, they have access at age 18. You are gifting to them into their Junior ISA, so lots of small gifts thoughout the years... keep a log, should the worse happen. Small gifts, and gifts from surplus income, are generally exempt from inheritance tax, but still keep a log of them.

I don't think you can gift an ISA to someone though, @nannynick so that route would mean the tax benefits were lost on gifting, though that may not matter with a small amount. OP may need her own ISA anyway.

No, but you can take money out of an ISA and gift the money.

Thank you both. I do not think their parents would want to change their ISA to a Stocks and share one, but can I set up a separate S&S for them both. This is money I need to give them age 18 from a will I am executor of. Any recommendations of S&S to look at?

No you cannot setup a Junior ISA for them.

Absolutely set up a seperate stocks and shares one.