Junior Investing

Give the money a clear purpose

You may want to help with education, a first home or a future opportunity that is not yet defined. The likely timescale and how much flexibility you need are important starting points.

A long investment horizon can provide time to ride out some market movements, but it does not remove the possibility of losing money. The approach should reflect when the funds may be needed and the risk you are prepared to accept.

Understand ownership and access

A Junior ISA is one option to consider where the child is eligible. Money paid into it belongs to the child and normally cannot be withdrawn until they turn 18, when they can decide how to use it.

That commitment is important for parents and grandparents to understand before gifting. If you want to retain control over when or how money is used, discuss the alternatives and their implications before choosing an account.

Consider cash, investments and regular contributions

Cash and investments serve different purposes. Cash offers greater short-term certainty, while investing exposes the money to market movements in pursuit of longer-term growth. Neither choice should be made solely because of the account's tax treatment.

We discuss regular contributions, occasional gifts, charges and spreading investments. Contributions from different family members may need coordination so the account remains within the rules that apply at the time.

Keep family priorities in balance

• The child's age and the purpose of the money
• Existing child savings or investment accounts
• Who intends to contribute and how regularly
• Your preferences around access and ownership
• Your household's reserves, borrowing and other goals

Helping a child should also fit your own financial position. We help you consider an affordable plan and explain the features and risks before you commit.