Hi there, my son has a savings plan with Witan Jump that is now being closed and transferred to Hargreaves Lansdown. However, Hargreaves Lansdown informs me that I cannot transfer all the money (£26,000) into a Junior ISA account, because it's more than the yearly ISA allowance. I am not sure what to do with the rest of the money (£6,000). I would like to keep it invested, but would appreciate some advice as to how I could invest it for my son, in order to get the best out of it. Kind Regards, Isabella
I started looking at your query but I must confess to being a little confused.
Transferring to Hargreaves
According to the Witan/Hargreaves Lansdown transfer documents online, the Witan Jump plan is/was a Child Trust Fund (CTF).
So, assuming that was in your son’s name, and the new Hargreaves Plan is also in your son’s name, you should have been able to transfer that money in full to a Hargreaves Junior ISA (JISA). A Child Trust Fund to JISA transfer is possible, as long as the value is transferred in full.
I’m not sure if there was some paperwork that was overlooked, or whether I have that technical detail wrong. But it is definitely worth asking Hargreaves why a full transfer was not possible…
The original account
If they are right, though, then how was the money originally held?
If it was a simple Investment Account, is/was there a Bare Trust in place?
And where and how did your son accumulate it in the first place? - Have you been saving for him? Relatives? An inheritance from somewhere?
One possible option is a Junior Investment Account (JIA) alongside the JISA, perhaps with annual switches to take advantage of the JISA annual allowance. And Hargreaves may well have set your son up this way already.
But is it the best way to hold your son’s money? Do you need a Trust if one is not already in place?
I’m afraid I am unable to answer that question on the information we have.
Hargreaves do offer some guidance that might be able to help you when looking at Junior Investment Accounts and JISAs.
In terms of how you actually invest the money, a Hargreaves account would allow you to retain the Witan investment Trust - in both the JISA and in their Junior Investment Account.
Or you could use this move as an excuse to rethink the whole strategy.
Passive multi-asset funds are generally considered a good foundation, particularly when starting out. They can offer access to the entire world of investment under one roof, at an extremely keen price. And there is one for every risk level.
Or if your son is older, perhaps he has imminent plans for some of it? University, travel, a car for getting to his first job? In which case, perhaps it’s a good idea to start consolidating a portion of those gains into cash, ready for spending…
Of course, you are not wedded to Hargreaves just because Witan have moved you over to them.
Once you have established the JISA/non-JISA split of the investment, you can move the money to any other provider. Guided, of course, by the balance between costs and investment options and how they line up with what you’re looking for.
Best of luck,