31st Jul 2012, 23:02
My Daughter's just over 9 months old now and I want to save for her future. At the moment I have £1000 to set aside for her and I can add £100 per month to it.
I don't want to do anything in her name, I don't want her to have control of the cash when she's 18 to blow on a car or the world's greatest holiday. It's her money but not hers to spend as she chooses. The money has to be either for her university education or a decent deposit for her first house.
I've been looking at investment ISA's but the number of products has left me completely confused.
I will not make my final decision on what PPRUNE tells me, but if people are willing to direct me in the right general direction, I'll be eternally grateful.
1st Aug 2012, 00:52
Premium Bonds as old CTF with Govt contributing is long gone and average chance of getting a prize if adding to it all the time.
1st Aug 2012, 04:16
So at 18, you don't think she'll be able to twist you around her little finger?
1st Aug 2012, 06:33
If you are looking at equity investment over this term, then consider an Investment Trust ISA , savings scheme in emerging markets.
This would be high risk over 2-3 years but ought to be extremely profitable with lowish risk over the period you are considering.
Using a savings scheme means that investment costs are very low , the ISA that it is tax-free ( personally I don't know if this available for minors , please check ) and the likely continuing growth of emerging markets as they take market share from the West, should provide the rocket-fuel to the investment.
If you buy a magazine for a few pounds, this will have pages and pages of results covering periods from one month to five or seven years.
A long-term leader in this field is Templeton Emerging Markets I.T. which has returned - 17% over 1 yr, + 38% over 3 yrs and + 44% over 5 yrs. This is a world-wide fund, a leading Asian fund is Aberdeen Asian Smaller Companies I.T. which over same periods has returned +12%, +160%, +154%
You could keep total control ( if you don't already use an ISA ) by having it in your name and giving it to her when you wish. No tax implications as long as you survive seven years beyond the gift, but need to consider possibility of pre-deceasing before then.
1st Aug 2012, 06:35
The money has to be either for her university education or a decent deposit for her first house.
And what if she opts for neither? She might end up a flamin' nun or a greenie
Not pre-judging your daught but an 18yo chick these days would probly rather
use it to bail out her boyfriend on his third B&E charge.
With the EU and US the way they are I wouldn't set up a trust fund in either
of those regions - the very high risk of desperate governments getting their
greedy bloody mitts on it are far too great. There are plenty of safe offshore
TF products available in Singapore and Hong Kong - all you need to do is the
1st Aug 2012, 08:16
You should go the Gina Rinehart (http://www.theaustralian.com.au/news/nation/gina-rinehart-must-pay-childrens-costs-in-legal-stoush-over-family-trust/story-e6frg6nf-1226438687982) route.
1st Aug 2012, 09:55
ISAs are boring but safe! Have just set up one for first granddaughter; her father (my son and heir) is in the Finance business and he advised that as the best route .....
1st Aug 2012, 10:35
ISAs are boring but safe
One would have to say you don't understand the concept. The ISA part is just a wrapper allowing the investment to be completely tax-free.
Whether it is safe or not depends entirely what is within it and since this could be anything from commercial property in Vietnam to oil exploration in the Falklands to tracking the FTSE 100, there is a very wide spread, but inherently safe ... ? No.
Gorter, how about an old fashioned saving´s account in her name, with the proviso that up to whatever age you see fit, she needs your/your wife´s signature to make a withdrawal?
It´s not sexy at all, and slow as well, but very safe.
Both our children got one of those from my parents in law at birth, and while the grandparents are long gone, the children still draw on those accounts, with great deference, whenever their state study loan falls short.
Kids always knew the accounts were there for them, got the statements, watched the money grow and were from an early age inocculated with the notion that the money from the grandparents was For Student Use Only.
I found both of them fit to decide over the money when they turned 18 and officially turned the deciding power over to them at that age, but to this day (they´re almost 24 & 26) they still call me "you reckon Grandma and Grandpa would approve if I spent some on XYZ?" when they plan to make a withdrawal. ;)
Those accounts helped teach them about saving, about taking money seriously and are yet another reason for them to fondly remember their paternal grandparents.