Any of you well educated people any clue about ISA'S? Son has been given some money by his grandparents and at the moment in his life he's not ready to look after a vast amount of cash. Which ISA on the markets would best to put it into. Thanks in advance. Oh and Norwood leaving was shocking.
How old is your son? It will affect the answer as it’ll change what accounts he can get. Do you need it to be an ISA? There’s lots of better savings accounts if you don’t need the tax free protection.
Will the amount affect the benefits he will receive? (Sorry, not being nosy, it’s all important considerations).
Go with a reputable broker. Check fees. Put 20k (annual limit) into a stocks & shares ISA Put the remainder into a normal stocks & shares account Every year, feed the ISA from the normal account (£20k) Both accounts will grow at approx 4% (depending on chosen portfolio). Normal account will be subject to tax and CGT perhaps if markets perform That will lessen year on year as the ISA is exempt and eventually all funds will be in the ISA, thus protected from CGT
Amount probably would, might be better in wife's name if that's doable. He's not savvy with money and it would be gone in 5 minutes
That’s up to the grandparents I guess, whether your wife already has an ISA (and if it’s fully paid up for this year) or if she is near her tax limit on her interest already. I’ll post these links here as you probably don’t want to share private info and you can have a look at the best accounts and make your own mind up. Feel free to PM me if you want more advice specific to your situation. If you’re set on an ISA: https://www.moneysavingexpert.com/savings/best-cash-isa/ If you want a savings account: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
dont think you can draw back out of a kids isa until they turn 18 Get it in a S&S isa and bang it in an index fund and let it compound
I think it’s only fair to explicitly say that this carries risks. They’ve already said the son is not savvy with money and didn’t mention wanting to invest it. It’s can be a very good idea if you know what you are doing and are comfortable taking a risk for higher returns.
Absolutely, hence 'reputable' in my opening gambit. There is no need to 'chase' higher returns, and I didn't suggest doing that. There are high, medium and low risk portfolios. My suggestion works for someone I know, but I get that it is only one option. In that instance, he was gifted an amount, by Grandparents, at 18. His own parents didn't want to blow it on fast cars and wine, women and song, so it was explained to him about long term growth but that he was free to draw down cash (from dividends) to top up his normal salary if needed. Some years he has had more cash than others, some years he has not drawn any at all, but it helped him through Uni without actually making a dent in savings. In 6 years the portfolio has grown and he potentially has more funds to draw but the bigger benefit is now mature enough to understand the structure and long term benefit. It was just a suggestion JD, as requested, and it is neither a right or wrong one. Your advice is spot on by the way ^
I think the first issue is how can your son be supported because at the present time he may have difficulty managing the money. Can the money be invested in joint names (with you/your wife?) or in some sort of Trust Fund where it would need his signature and someone else's before he could access the money ? If not the danger is that the money may be squandered.
