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Hello, friends! Since my last post about Junior Stocks and Shares ISAs, I thought I would share a review of the provider I have chosen. There are a few providers of this type of investment account in the UK, but the one that I invest in for my children is the Hargreaves Lansdown Junior Stocks and Shares ISA.
Why I have chosen Hargreaves Lansdown
There are a number of reasons that I have picked Hargreaves Lansdown, but one of the main reasons is that they are renowned for their reputation within the financial industry and I feel confident that my money is safe with them. They are authorised and regulated by the Financial Conduct Authority and are a FTSE-listed company. The company is the largest investment platform in the UK for private investors and have over £127 billion in assets under administration. They are trusted by over one million clients, so you feel like you are in good company and well taken care of.
No fees
Hargreaves Lansdown have removed their fees for this type of account, so there are now no fees payable for Junior Stocks and Shares ISAs, which is one of the biggest selling points. Because there are no fees to pay, your child gets to keep all of the money that is paid in and any growth achieved, meaning that their potential returns are even greater.
Account Management
There is a simple-to-use app for your phone where you can manage your child’s investment. The website is easy to navigate and if you are a Hargreaves Lansdown customer yourself, you can link your children’s accounts and view everything in one place.
Contactability
It is easy to contact someone when I need to speak to them. I have called and spoken to their UK based customer support team a few times and have always found them to be very helpful, professional and able to deal with my enquiry efficiently.
How to open an account
Opening an account is quick and simple. You will only need your debit card or bank details and National Insurance number (and the child’s National Insurance number if they have one). You can open an account with as little as £100 lump sum paid by debit card, or set up a regular payment of £25 per month from your bank account.
Your child is eligible for an account if they are a UK resident, are under 18 and don’t already have a Junior Stocks and Shares ISA or Child Trust Fund. If they do, you will need to complete a transfer instead. This is also easy to do, as I have previously transferred a Child Trust Fund to them for my eldest daughter.
How to invest in funds
I have chosen a fund for my children’s ISAs that I also have in my portfolio. It is a fund that tracks an Index fund and is currently performing very well. I enjoy keeping track and regularly monitoring all my funds for performance. Don’t panic if you don’t know what to choose and don’t feel confident, when you open the account you can either choose your own funds or be guided by suggestions. There are also options for picking a ready-made investment. The ready-made investment options are diversified collections of funds that are hand picked and managed by experts. All you need to do is choose a fund that supports your goals and decide how much to invest. Nothing could be simpler. And if you are having difficulty navigating the website, you can call and feel confident that a member of their team will talk you through.
Even with the ready-made investments funds, it is worth checking in regularly to ensure that the fund is still meeting your needs. If not, you can easily make changes at any time.
How much can I invest
The children’s ISA allowance is lower than an adult’s at £9000 per year. You can set up a regular payment and also pay in ad-hoc.
When investing into funds, there is a minimum investment amount of £100. I make regular, manual monthly payments into the Stocks and Shares ISA which remain as cash, then purchase funds when there is at least £100. This means that you can keep an eye on the market and try not to purchase at a high (not that I am recommending attempting to time the market, as this is very hard). I have my funds in a watchlist on Investing.com which I monitor so I can see how the funds are performing. I find the app great for this and it is easy to see how the funds are performing over time. You can also create a watchlist on Hargreaves Lansdown itself if you prefer to keep everything in one place and hold all your investments there.
The bonus of the cash part of your child’s investment account with Hargreaves Lansdown, is that the money is also gaining interest while it is sitting in cash at a rate of around 3%, depending on how much cash you have in the account.
What do you need to know before you apply?
- Once the money has been deposited into the account, it usually cannot be removed until the child is 18.
- Your child can only have one Junior Stocks and Shares ISA and one Junior Cash ISA at any one time and cannot hold a child Trust Fund and a Junior ISA at the same time.
Before you open an account, you should be:
- Comfortable choosing your own investments on behalf of your child
- Confident in making long-term investment choices
- Free from significant debt (a mortgage doesn’t count)
- Over the age of 18
- Applying on behalf of a child under the age of 18 as someone with parental responsibility for that child
- Applying on behalf of a child who is resident in the UK for tax purposes
- A UK resident
A Hargreaves Lansdown Junior Stocks and Shares ISA is a fantastic, tax efficient savings vehicle to set your children up for the future. It is simple to open and the app and website are both easy to navigate and understand. Your child will have the advantages of long term investing and returns that compound over time, giving you the opportunity to start them off in life from a strong financial platform. Learn more about compound interest and why this type of account is so beneficial for long term growth here.
Do you save for your children? Have you ever considered investing that money in the stock market? Tell me in the comments. Don’t forget to subscribe!
Disclaimer
I am not a financial advisor and am solely sharing my own opinions based on my own experience. It is recommended that you seek the advice of a financial professional before making any decision about whether investing is right for you. Investing carries risk and you may get back less than you put in. Previous performance of a fund is not an indication of future performance.
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