Child ISA for my niece

I’d like to set up a child ISA for my niece. She’s 4 so hoping to set up a pot for her that she can have when she’s 18.

Plan is to open it with a lump sum, then set up a direct debit to it each month. We’re not talking large sums of money though unfortunately!

Anyway, any recommendations will be well received, I know nothing about investments. Am I right in thinking that my sister  will have to actually set it up though?

On advice of  friend who is a IFA we opened a vanguard LifeStrategy 100% Equity Fund for grand daughter.

https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/overview

I used my sons email to set up, he had to tell me the text code.  We put the money in and he now has the only access to account. You can give access to others to add money or to view account. Just hope we’re around when she’s old enough to get access to it and that she’s sensible with it and not an arsehole that squanders it all on shite.

My daughter’s child trust fund is with One Family and I have no complaints. Just had a quick look and they have a junior ISA but you’re right it would have to be started by a parent or legal guardian. Otherwise I would suggest looking at Money saving expert for recommendations.

Fees are the enemy of returns- choose a platform with low fees and a suitably well-spread fund, good luck!

It might be easier and more practical to save in your own account and give them the money as a gift at a time of your choosing?

I opened a JISA for my son this year.  Looked at AJ Bell and Vanguard as I already have some investments with them, but in the end opted for Hargreaves Lansdown – seemed to come out on top for fee’s.

I have 4no. holdings – Vanguard LS100, Vanguard FTSE Global All Cap Index, L&G Global 100 Index and Fidelity Index World.

Started with a small lump sum in each, then monthly DD (IIRC minimum contribution is £25 p/m each holding).

As above, will need to be opened by parent or legal guardian.  All correspondence is in my sons name.

JISA with VAnguard Life stratagy 80 – Mini is 9 now and its outperformed all of my own invetments at 25.18%

One thing to consider, if you’re not using your own ISA allowance to it’s maximum already, then the money is probably better in one of those.

The reason being, if you put money in a child ISA then you’ve irreversibly gifted it to them, and you may not wish for them to have it when they’re 18.

If you still have your own ISA allowance left, then it’s just as tax sheltered in there, and you’ve got much more flexibility about when/if you give it to them.

Imagine how satisfying that conversation could be.

“Tarquin, every month since you were born i have put aside a small sum of money for you when you turn eighteen… ”

*Eyes light up*

“Over the last few years i’ve watched you grow into the adult before me and its give me an emense satifaction to be able to tell you you’re getting… Heehaw ya wee shite hawk dobber. See ya byyyyeeeee”

It might be easier and more practical to save in your own account and give them the money as a gift at a time of your choosing?

Why does someone suggest this whenever this topic comes up? Unless the sums in question are tiny then it’s a &#£( idea.

if you put money in a child ISA then you’ve irreversibly gifted it to them,

Yes, that’s how a gift works.

If you still have your own ISA allowance left, then it’s just as tax sheltered in there, and you’ve got much more flexibility about when/if you give it to them.

What if OP croaks and it’s not in his will

What if OP croaks and some of it goes in IHT

What if it ends up being more than the ISA allowance and the kid can’t get it into her ISA when she receives it in 18 years

What if the OP’s neice is in her company Sharepurchase and needs all his allowance that year for avoiding CGT.

What if the OP croaks and his partner remarries and the money disappears to that side of the family

You’re either giving it to them or not. If you are, then do the job properly. As above, AJBell, vanguard or HL ISA in a spread fund.  Job done.

<Edited to correct some of the basic failures to grasp the difference between a grandchild and a niece>

< And to apologise for being a grumpy **** as DPD has lost my parcel>

Ha right yeah the worry of it being spent sensibly or not is of course a concern…I’ll spare the details.

£25pcm minimum on one of the above was more than I was going to be putting in tbh. I’m not currently on a huge income, hopefully I’ll be on more in years to come but I’ve not got lots of spare cash.

Cheers for the advice though folks, I’ll have a look at the various options suggested.

Edit: to clarify, it’s my niece, not grandkid, I’m only 38! …and yeah we’re not talking about huge sums of money really. Well I mean it’s all relative isn’t it…. it’ll be a decent chunk of money to my niece. Think more ‘low income’ background than the typical stw household income.

Vanguard just put their fees up for some accounts. It would be wise to check if the child ISA is affected (and the same for those who already have one)

We need to let you know of upcoming changes to our terms and conditions for clients who self-manage their Stocks and Shares ISA, General Account or Personal Pension (SIPP).

Only if you self manage.

There are no changes to our Junior ISA – our account fee will remain at 0.15% a year, capped at £375.

No increase for Junior ISA

Someone already said it but the lower limit on monthly top-up is £100 with Vanguard but only £25 with Hargreaves-Lansdown and you can still get the Vanguard funds via HL.

If you’re only looking at below £25/month then save it somewhere and then just pop onto your fund provider and invest when you have enough to do a one-off trade (that might be a bigger lower limit still, possibly £100 but I may be wrong on that). You’d only have to do it a couple of times a year anyway.

PS good on you.

Halifax do a good rate on kids accounts

No increase for Junior ISA

Good news

We did one through Aviva’s Wealthify platform for our grandson. We chose their ethical fund. As others have mentioned it had to be set up by our son and we were then added as contributors. Put a lump sum in to start him off and then a monthly DD.

You are not restricted to a Child ISA as an uncle you could gift into a conventional ISA, I am not sure this has any practical significance – the purpose behind Child ISAs and their predecessors is to allow parents to gift to their children and for the gift to be respected for tax purposes, without these rules the funds would still be regarded as belonging to the parents when the child is a minor.