Junior ISAs

[scaramanga]

Anyone have one? Any recommendations?

I'm looking for a stocks & shares one as it will be for 18 years. I don't really want to use any of my funds as they're designed more for people like me who want to tinker all the time. I'd rather leave this with a fund that doesn't need a lot of management - anyone know some good ones?

 

[inkpenspur]

Have a look at Alliance Trust Savings. They have performed quite well for my kids over the last 12 years. Not absolutely top of the class every year, but always in the mid to upper centiles. I haven't had to manage them much either... just pay the money into it every quarter.

 

[scaramanga]

Have a look at Alliance Trust Savings. They have performed quite well for my kids over the last 12 years. Not absolutely top of the class every year, but always in the mid to upper centiles. I haven't had to manage them much either... just pay the money into it every quarter.

Thanks. Did you invest in one of their standard portfolios or did you customise?

 

[ricky2tricky4city]

It's a sh*t rule that it's locked in until they're 18.

Although you might as well put the child benefit somewhere

 

[inkpenspur]

Thanks. Did you invest in one of their standard portfolios or did you customise?

I customised for a couple of years, then didn't for three years but have recently customised again as I wanted to focus into certain regions and markets, but it was very easy to do.

 

[Roy1983]

It's a sh*t rule that it's locked in until they're 18.

Although you might as well put the child benefit somewhere

Exactly. We don't need the child benefit so stash it away every month. Not what it's used for but hey. Need to get an isa sorted out soon too.

 

[scaramanga]

It's a sh*t rule that it's locked in until they're 18.

Although you might as well put the child benefit somewhere

Locking it away gives you far more favourable terms though - especially in cash ISAs. If you want to be able to spend it on them there are much better options than ISAs.

 

[Superhudd]

Exactly. We don't need the child benefit so stash it away every month.

Same here, how else does one get the Government to pay them Uni fees. If they don't go to University then its a nice help for a deposit for a house.

 

[Roy1983]

Same here, how else does one get the Government to pay them Uni fees. If they don't go to University then its a nice help for a deposit for a house.

Exactly. My boy is 19 months now so it's building up nicely for hm. When he's 18 ill be able to provide him with a car or deposit for a house something I never received from my **** of a father unfortunately.

 

[P.D.]

Stick it into a pension and their pot will be in the millions by the time they retire.

 

[Steed Train]

I'm a financial adviser and there really hasn't been much of a pick up with Junior ISA's. Not many providers have brought in to the concept and so do not offer them, additionally the investment choices you have available tend to be more limited. The trouble with this is that you're effectively locked in to a Junior ISA until their 18. The popularity could drop even further and you could be stuck with archaic investment and charging propositions (see Stakeholder pension)

The fact they are tax free sounds great, but realistically any investment in your childs name would be tax free unless they earnt more than £9,440 pa. The only exception being money from a parent that earns more than £100pa interest (you can get a relative to contribute and this rule does not apply).

The thing that alot of people dislike with the product is that at age 18 it becomes the childs money. If they wanted to take it out and just have a huge bender in Ibiza the money is legally theirs and there is nothing you can do to stop them.

One good idea thats been mentioned is to contribute £3,600 pa into a childs pension. In all likelihood by the time your child retires they will not be able to rely on state pension benefit and will have to contribute a significant portion of their income towards a private pension. Giving them a leg up will have a huge impact on their monthly expenditure for the rest of their lives.

In terms of investment, a good single manager portfolio of funds is the best approach. Not sure how this would work on a DIY basis, I review and rebalance my client's on an ongoing basis but have a team of fund analysts that provide me a shortlist of top quartile funds for each sector. Certain fund supermarkets offer similar recommendations but can be really expensive (Hargreaves Lansdown have a great proposition but have got in some hot water for concealing their fees) A good all in one approach may be a multi-manager fund, the Jupiter Merlin range have performed consistently well.

 

[scaramanga]

I'm a financial adviser and there really hasn't been much of a pick up with Junior ISA's. Not many providers have brought in to the concept and so do not offer them, additionally the investment choices you have available tend to be more limited. The trouble with this is that you're effectively locked in to a Junior ISA until their 18. The popularity could drop even further and you could be stuck with archaic investment and charging propositions (see Stakeholder pension)

The fact they are tax free sounds great, but realistically any investment in your childs name would be tax free unless they earnt more than £9,440 pa. The only exception being money from a parent that earns more than £100pa interest (you can get a relative to contribute and this rule does not apply).

The thing that alot of people dislike with the product is that at age 18 it becomes the childs money. If they wanted to take it out and just have a huge bender in Ibiza the money is legally theirs and there is nothing you can do to stop them.

One good idea thats been mentioned is to contribute £3,600 pa into a childs pension. In all likelihood by the time your child retires they will not be able to rely on state pension benefit and will have to contribute a significant portion of their income towards a private pension. Giving them a leg up will have a huge impact on their monthly expenditure for the rest of their lives.

In terms of investment, a good single manager portfolio of funds is the best approach. Not sure how this would work on a DIY basis, I review and rebalance my client's on an ongoing basis but have a team of fund analysts that provide me a shortlist of top quartile funds for each sector. Certain fund supermarkets offer similar recommendations but can be really expensive (Hargreaves Lansdown have a great proposition but have got in some hot water for concealing their fees) A good all in one approach may be a multi-manager fund, the Jupiter Merlin range have performed consistently well.

Thanks for that. I'm happy with the money being his at 18 - I have my own savings for the sensible stuff.

I've looked at the Jupiter Merlin range, but they all seem a little bond-heavy for a longer investment - is that the case or am I looking at the wrong ones?

 

[scaramanga]

Also, HL seem pretty good in general. Are their rates high or did they just keep them hidden?

 

[Bullet]

We avoided a Junior ISA for that same reason Steed - the money would be his at 18.

He won't know what to do with £thousands at 18, he'll waste it on partying, clothes, drugs, Panini sticker albums and Now that's what I call music Volume 213

Also - I've had Jupiter Merlin S&S ISA's for 10 years and they have been quite up and down... I spread it into 9 ISAs so I had a big range of investment types - Growth, Income, Worldwide, Asian, China, Eastern Europe, Brazil... sometimes they do good, often they do very average... I haven't been wowed yet, but I guess it has been tough times for S&S.

 

[Superhudd]

We are not doing ISA's. We are putting the money into Premium Bonds in our name. Which he will not know about. Should a sizeable win come then it will be ours HAHA Just to add we are adding an extra tenner to the £20 per week. Which should in all likelihood mean north of £25k, which should mean a decent start for the lad, whether like I said in an earlier post, for Uni or a deposit on a flat.

I don't want him growing up thinking that there is this lump sum that is going to get him on his way. I was given 5 large on my 18th and from my 12th birthday it was all I could think about, and I was well sorted, in reality.. it paid for driving lessons, my first car and 2 years of holidays in spain.