The Telegraph (15/01/2020) – Inheritance is a lovely way of passing on a substantial gift to loved ones, but for those receiving a lump sum it could be the first time they have control of a significant nest egg.
Increasingly, grandparents are splitting their fortune among not only their children but also their grandchildren.
As a parent, knowing how to deal with this can be much harder than deciding on how to invest, save or spend their own inheritance. Telegraph Money asked two financial advisers for the best ways to invest on behalf of children.
Alan Chan of IFS Wealth & Pensions said for smaller amounts, parents might want to look at taking out a Junior Isa. The current limit per year is £4,368, full details of which can be found in the box below.
For young children, it’s best to invest the money in the stock market because historically it has been the best-performing asset to buy for the long term (10 years or more).
As the child grows older, parents should look to dial down the risk accordingly, until they are given the money for themselves and can decide what to do with it.