Investing £20,000 for a child

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How would it be best to do this?
It is inheritance he has received and I want to make sure I do what’s best for him with it in terms of investing.

He is 11 and I would expect him to have use of the money for uni/driving lessons/car/deposit on property.

I’ve spoken to a company about a discretionary trust but want to explore all options. He’s got a few thousand in a 5% savings account and this is the maximum he can pay into it.

He’s very impulsive (probable ADHD) so letting him loose with £20,000 at 18 isn’t wise. He accepts it’s for “big things” like uni or housing etc.

Edit: this assumes it wasnt left directly to him....if it was ignore me 🙈

Take my good advice for free.

Dont mess around the an IFA and keep control of th money yourself.

I would open up a new Stocks ans shares ISA.

I recommend Vanguard as its low cost and easy.
He is young so for something like the lifestraregy 80% equity fund.

But ajbell and several other have similar platforms and low fees.

Put the full 20k in and do it in YOUR NAME

Its clean and separate and you can give it to him as needs arise.
Think of it as a trust and you are the trustee.
This will prevent him blowing it up the wall and give you decent returns

Wouldn’t that class as my own savings though? I’m on universal credit.

Yes, don't do that.

Do not put it in your name! Look for the lowest cost platform which if you choose Vanguard, isn’t necessarily Vanguard. Look on Money Savings Expert or Money to the Masses.

Once he turns 18 they will write to him etc but you can carry on being involved in managing it.

Putting it in your name would be theft and void your UC, so all kinds of trouble.

You need to open an account in sons name. Either a Junior SIPP or a Junior Stocks & Shares ISA; or both.

You cannot avoid him having control of a savings account when he is 18, the “bank” will write to him when he is approaching 18 telling him about it and require him to setup a new password etc.

When it comes to investing, I can recommend the book “Money : Master the game” by Tony Robbins, but his advice would be the same as the advice Warren Buffett the worlds most successful investor gives to 95% of people:

Buy index tracker funds, they are low-cost and diversified. You can choose an american focused one such as an S&P500 Tracker or a UK one such as a FTSE100 tracker amongst others of course. You can put £9k in a Junior SIPP before April 5th and another £9k in a Junior SIPP after April 5th.

If you have real worries about the age 18 access then maybe open a Junior SIPP (private pension) instead and put £2,880 in each year and HMRC will add £720. You can invest in the same things in a SIPP as you can in an ISA but he won’t be able to access it until in his late 50s.

Doing both ISA and SIPP spreads the risk a bit. If it was me I’d put £2,880 into a SIPP this year and another £2,880 next financial year (after April 5th). The remainder into a Junior Stocks&Shares ISA.

No-one knows what the future holds but I would ball-park or target for the investments doubling every 10 years if all continues as it has in the past. Of course this depends how it is invested, but that £20k invested now could become £640k when he is 61.

Is he a one marshmallow now boy or a 2 marshmallows if he waits until teatime boy? (wait until he’s 18 or wait until he’s 61). I appreciate you need to be led my the will stipulations.

I’m using Hargreaves Lansdown for my son and am happy with it.

Check out MSE: https://www.moneysavingexpert.com/savings/investment-beginners/