Thinking of opening accounts for our grandchildren. We already have ISAs via HL for ourselves and children but want to explore elsewhere for the grandchildren. Its understood that these accounts lock the money until 18th. birthdays; so what would be the advantage over opening an normal adult account? Any advice on pros/cons and available reputable platforms welcome. Thanks
We were left some money for our two kids and put them in Junior ISAs. The amount has grown but our main concern is the fact that when they turn 18, all that money is theirs to do what they want with. We planned it as help with university, college, house deposit, whatever, but now we have to hope they do the right thing with it.
Had I had that money at 18 I probably wouldn't be here, which says more about me at 18 than the perils of Junior ISAs
Not sure what you mean. You have to be 16 to open a "adult" cash ISA and 18 for an "adult" stocks and shares ISA so under 16s have no option.Originally Posted by ALindsay
Have a look here and there may be some useful information:
https://www.moneysavingexpert.com/savings/junior-isa/
Grandparents cannot open a Junior ISA for their Grandchildren unless they have parental responsibility for them. You can get their Parents to open one on their behalf but you pay money in directly, though.
With a Junior ISA, the money is theirs on their 18th to do whatever they like with it, requiring no-one else’s consent - not necessarily a problem, but something to be aware of.
Without extreme circumstances (terminal illness, death...) you can’t withdraw the money from a Junior ISA before the childs’s 18th Birthday. Not so helpful if the money is needed for some emergency prior to then.
Pros are that it’s obviously a tax efficient way to save and the £9k Junior ISA allowance means you can keep your full £20k Adult ISA allowance undiminished.
There’s a huge amount of articles online about this stuff, it’s worth looking for them.
You could always put money into a SIPP for them. That way they can’t access it until they’re 55. Plus they will get 20% added by the government. I started a SIPP for each of my children when they were born. I’ve been paying £84 a month into each of their accounts. That figure is what we used to get given in family allowance before that ended. My daughter is now 18 & she has just over £50k in her pension pot.
What an interesting idea. Is this in addition to other savings for them or do you put it all in the SIPP?
They have stocks & shares ISA’s as well. My daughter’s was recently converted into an adult version. She’s at University studying Veterinary Medicine so the money could come in handy. She has no idea how to get into the account yet though, & she hasn’t asked. My son, on the other hand, is likely to blow it all on beer & women..and waste the rest. Fortunately he’s only 11 at the moment 😆
Thanks for replies - on balance I think we'll stick to normal children's accounts for now which offer slightly better rates. SIPP does sound interesting - maybe for later.
Current plan is for the minimum age to draw pension benefits to rise to 57 in 2028. Given the experience of the last 15 or so years, it's a brave person who trusts governments not to mess with their pensions.
I wouldn’t trust the government to empty my bins
For what it's worth, I believe you could buy Premium Bonds on behalf of your grandchildren (or at least the parent/guardian can). These can be cashed out any time, and have any winnings reinvested in purchasing more bonds.
The average annual return is desperately low though. Compared to earning 7% in an ISA or SIPP it's not a particularly good way of providing for a child's future.
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