Investing for young children

[CucumberSandwich321]

My 6 year old has a savings account from when she was a baby, containing money people have given her and the occasional top-up from us when we have some spare - currently about £2500. The thing is, I'm very conscious that when she's 18 (or whenever she ends up having it), it will be worth about 25p with the way things are going 😅

I'm interested to hear how others are managing kids savings/investments?

Put it into S&S ISA for her

Agree with above, Junior S&S ISA (JISA). It’s the perfect timeframe for shares. We use Hargreaves lansdown as there are no platform fees for JISA.

As with any JISA the money will automatically belong to the child when they are 18, something to consider.

ETA- invested in a world equity index tracker fund

We’re also with HL as no fees for junior isas, invested in a simple global tracker fund

We saved for our kids in a savings account and I really regret not investing - they would have been much better off.

Mine have a moneybox S&S ISA each and a fidelity SIPP each. The ISA is invested in the default selection and the SIPP I chose each month what to invest in and have a small selection that I rotate round.

Put it into a well diversified fund such as an index tracker, or global fund. Investing into company shares or more focused funds can be risky. I imagine anyone who invested in middle Eastern airlines is having a rough time of it at the moment for example. It is theirs at 18, so I doubt that bothers you for £2.5k, but they could blow it all down the pub. For that reason I wouldn't invest large amounts in a JISA. Not that I have large amounts to give!

It sounds like you are just a normal family trying to do the best you can to provide for your child later in life. Excellent move. Just remember some will have more than your child and some a lot less.
you will get some comments on it being an unsubstantial amount of money but some is better than non. For mine we have tried to save child benefit amount monthly it soon adds up if you can live without it.

I agree with this. I wouldn't put more than about £1k into something they can do what they want with at 18, I'd rather have my own savings that I can share with them as they want to

I also recently read an article about a mum having to jump through expensive hoops to gain access to a JISA for a child who lacked capacity, plus it also counted against benefits they would receive. Not relevant for all but something else to consider.

My son has had a SIPP since birth ('free' money via the government top up), plus his S&S ISA. We're with HL. I self-select (worked in industry). My first stock selections were P&G, since the world will always need nappies, and Coca-Cola. Both pay stonking dividends, as well as capital growth. Dividends get reinvested, and by the time DS hits 18 he's going to have a huge pot.

For long-term investing for a child, having cash sitting in a savings account is a total waste.

Hi @Oriunda can I ask how much you save in each? I currently save £75 per month via JISA but have been debating splitting £50 JISA and £25 SIPP

Tbh I've now stopped, once I realised DS' savings were reaching a quite ridiculous amount, whilst I was getting older and needed to prioritise saving for my pension!

When I was adding funds, I just did the yearly maximum for the sipp in one lump sum (2.8k, which the government top up). His isa i just added large amounts, including cash from grandparents, ie I didn't do monthly drips.

Both now just run under their own steam; obviously monthly dividends etc I just reinvest in either funds or, occasionally, stocks.

My vote is a JISA. I maxed out one for DS from the age of about 9 (the max you could pay in was a lot less than now for the first few years), and by 18 he had enough to fully pay for 3 years of uni, as it included a LOT of compound interest.

Yes, I know MN thinks all teens are useless and will piss it up the wall - and while that might be true for some it definitely isn't the case for all. I made it clear to DS what the money was for, and he'll be going into his 3rd year of uni shortly, and is extremely grateful that he has no student debt...and will still have some money left over at the end to start his working life with.