Question about child trust funds

[NettleTea]

My son had a child trust fund when he was born - as I was on benefits he received £500, which has now grown to just shy of £1000. It was with childs Mutual, but at some point moved to a company called Foresters. I helped him to set his account so that he could see it and decide what to do, but he didnt get round to it. They rang him last week to talk to him, and he asked them to call back, which they are doing on Monday.

He is not really sure what to do with it - as far as I remember there were a few options, such as have it transferred directly to his bank, pop it is one of their investment accounts, etc.

Its not a life changing amount, but I think he just was after some advice. He is going to Uni next year but he will get a full loan.

I had mentioned to him putting it in an ISA - maybe one of those ones where the government top it up if you use it for a mortgage. His sister was telling him to spend it on something he needed, and not put it away as it was only a small amount to invest. Or pay for driving lessons.

He asked me to ask here and see what other independent people would suggest. or even if anyone has just left it with Foresters, who are the company who have taken over the trust.

Driving lessons is a good option.

One of my DDs we have left it with Foresters and they moved it to an ISA. It’s grown about another 25% since then (4 years).
My other DD turns 18 this year. She will take hers and use to pay for a car / car insurance I think.
They obviously both had a bit more than £1000 though - DD1 had about £8k and DD2 will have about £5k.

He is likely to need it for uni even with a full loan. Rent costs can be extremely high.

That's true, it seems unlikely that even a full loan would be enough to live on.

I'd save it somewhere accessible for now.

Pop it into premium bonds. He can still get it back if needed but may win something.

We don't know that the ds is going away to uni, he might be staying at home, in which case the full loan will be more than adequate to live.
OP my ds has left his in Foresters, he's now mid 20s and it has grown more than what it would have in a high interest bank account. That can always change of course. If you are not in a position to help with driving lessons then that would be a very wise investment if he is keen, the lessons are so expensive now and I am seeing a lot of young people now are not driving due to cost and it does hold them back.

My eldest used his towards uni, he is also on full maintenance loan but that doesn't come through until after you've already had to pay advance rent or deposit, even in uni halls, and not until after you've had to eat for several weeks! He'll need it.

I think what he does with it depends on what he is likely to need over the next few years.

That could be uni, it could be a deposit to move in to his own place, it could be half invested half spent.

If he has no need for it in the foreseeable future he could consider a pension, I know it sounds crazy to think about retirement when he is barely an adult but that money will grow.

I didn't think I needed a pension in my teens but when I became disabled being able to take the pension was a big help.

Planning on putting ds's into a help to buy isa, there is a bit more in it though. Driving lessons probably not a bad idea, if that's the only way that they are affordable.

Yeah we are thinking the same - a Lisa I think it's called.

This.

Does he need bits for uni like a new laptop?

Mine put her towards driving lessons.

DS is going to Uni. He is going to be a long way away but the halls are not extortuionate. He will likely get DSA and he has PIP, so both those things mean he may not need it for Uni costs. He is doing games design - he is allowed to choose when he gets there as to whether he does the BA or Bsc as he was offered unconditional for both. He has a good computer at home and that will stay here as they have an incredible suite at the Uni and have said he only really needs a basic laptop for writing essays, and he can get that via DSA if his current,pretty good one, packs up.

He doesnt seem wildly bothered about driving although I agree that its a very useful skill to have, even if he doesnt run a car.

If he can get full loan, as it’s means testes on parents income. I’d agree in keeping it for uni, or something like driving lessons.

Driving lessons is a really good idea, and is an investment of sorts. Two reasons:

One day he may suddenly want a job which he can only get to by driving (or put another way, there may be no suitable affordable housing near his dream job and no public transport). It takes a while to learn to drive and pass your test even at the best of times. He could miss out on a great opportunity.

If he passes his test now, and then doesn't drive for a long while, he will be racking up years of "driving experience" in the eyes of insurers. Suppose he finally decides to start driving in ten years' time. Insurers will see that he's had his licence for ten years, and his premiums will be far far cheaper than if he'd only just passed his test. Insurers never ask whether you have actually been driving in the meantime!

well, he spoke to them yesterday and he has decided that he wants to invest it. He is putting £20 into a LISA, just to open it, in case the scheme gets pulled. The reasoning is he doesnt want to put savings into that, which has a penalty to take out, if he has any period of unemployment after uni and he may need it, and UC will look at that as an asset. He plans to add to it when he starts earning an income and has more security, as the 25% uplift for either home buying or pension is a good offer.
The rest he has put into a mid term ISA, which should see him through to the other side of Uni - he plans on doing a masters too.
He is very anxious about driving, and although he did think it could be a good idea, he may use some of his PIP this year to get started on that now the weather is improving. Especially as he has the mobility part of it.

Move to an ISA with Vanguard, they charge lower fees and the interests on ETFS are better! He should start investing: 1K is a great start!

My son used his (he only had £500 though) to pay his uni accommodation deposit as that had to be paid before his student loan came through.

The second year is often worse with up to 5 weeks rent needing to be paid in advance around May/June time.