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Investing for your Children

  • 10 November at 08:20 - by Stevie - 615 views

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This is something I regularly worry about:  should I be investing for my child now? And how can I do it?

10 Answers

I have a four year old, and I have invested in what is termed a “Jisa” or Junior ISA.  As long as the child is under 18, they qualify.

10 November at 12:31 - by RoBlake

Thanks!  How are they differnent to Adult ISAs?

11 November at 12:49 - by  Stevie

They work on the same tax free system but the key difference is that they offer a much higher interest rate.  I was allowed to put in £4128 for him. That’s the max, but you don’t have to pay in that much, you can pay in monthly if you want.

11 November at 18:23 - by RoBlake

That’s all well and good, but the major drawback is that you are locked in until the child is 18, then they have direct access.

12 November at 04:45 - by JeffW2116

I see, so you can’t get the money back out until then?

13 November at 11:34 - by  Stevie

No.  But in fairness you can also have relatives etc pay in...You can also look at a Stocks and Shares Jisa, which if your child is very young and you are looking at the long game, would actually give you more money as short term fluctuations wouldn’t affect you.

13 November at 19:10 - by JeffW2116

Is the tax the same for that?

13 November at 21:00 - by  Stevie

You mean on the dividends?  Yes you don’t pay tax on them regards the Jisa.  You can also overcome in a way inheritance tax if you get the grandparents to pay in a max of £3k a year, then that wouldn’t be taxable upon the grandparents’ death.

14 November at 11:23 - by JeffW2116

So are you saying that a higher risk Jisa would pay off if my child is very young, seeing that I am invested for 18 years anyway?

15 November at 15:42 - by  Stevie

I am no financial advisor, but from my experience, yes.

16 November at 23:59 - by JeffW2116
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