Investing CTF at age 18

[SixSeven]

My eldest is turning 18 soon and has about £25k in his CTF, plus almost £5k in premium bonds and other savings. He’d like to buy a cheap car but has little need for the rest of it in the immediate future.

We’ve looked at ISAs and LISAs and it’s all a bit of a minefield for a young lad. Has anyone gone through this in the last couple of years and can offer any advice on which way to turn. Thank you!

He'll only be able to put £4k in a Lisa a year.
I'm undecided on LISAs because if, a few years down the line, he falls in love and wants to buy a house with someone who already owns a house, or his first home turns out to be over 450k because of property inflation or he's buying in London, then he can't use his LISA (or if he did he'd pay 25% penalty). They're not flexible enough.

What I advise my DD to do is invest it in a stocks and shares isa. Choose a few index linked funds to invest in, a global one, a UK one, Asian one and US one. You should get 8% on them.

@Seamoss Global + UK + Asia + US?

Very similar advice to I gave. LISA too risky with the house price limit not going up so a regular S&S ISA invested widely is my advice, with a slush fund in PB that can be spent if needed.

£16K ISA
£4K LISA

Leaving £10K for cheap car/insurance/MOT/service. I didn't encourage my DS to to buy a car until he was able to afford to run it so that didn't happen until he finished YR2 of uni and just before his sandwich year (when he worked FT and could actually be almost fully financially independant). He also inherited his grandparent's car that summer.

Thanks everyone. Must admit I didn’t realise LISAs were quite so rigid, need to look into this a bit more. I’d prefer to keep things as streamlined as possible, for his sake.

We weren’t planning on getting him a car but it’s too expensive to insure him on ours, and we’d use it for his brother to learn in.

Do people invest in Premium Bonds much these days? He has a fair chunk of those that we could add to.

Lots to think about.