Investing for my children’s futures has been of paramount importance to me since they were born. I opened junior ISA accounts for both of my daughters within the first month of their lives and have since put away £50 a month, as well as any birthday money that has been given for their savings.
I would love to save more, but at present it is not feasible. Hopefully it will be in the future, but children are expensive!
When it comes to what they’re invested in, for now I have punted the majority of their savings into a global equity tracker – as the market is the best place for their long-term cash. But due to timing, their returns vary.
My eldest will turn four in a few months and, over time, has made a total return of 24% on her money. She benefited from starting in 2022 as markets were struggling and got an early head start from being in the market during 2023, in particular, when stocks rebounded strongly.
My youngest, who turns two towards the end of the year, has been less fortunate. She is up 7.5% (still a good return over 18 or so months, but already behind where her sister was at this stage).
When it comes time to hand over the money at 18 (although they will have access at 16), there will likely remain a disconnect between the portfolios, as they are similarly invested.
While the two years after my eldest has access to her pot – assuming for now that she withdraws it – could allow my youngest to catch up, they could also keep her behind. It all depends on the market.
So is it fair to give one child more than the other, just because of when they were born? Or should I top up whichever portfolio is lagging nearer the time to even out the pots?
Both could look like favouritism. By adding more to one pot down the line to even things out, I would be directly giving more money to one child. Yet offering them different sums at 18 doesn’t feel particularly fair either.
And if I’ve done my job as a parent correctly and invested well, I may not have the money to top up one pot to the same size as the other, if the difference is several thousands of pounds.
I appreciate this is some way off, but it is a dilemma worth thinking about now. Whatever I choose to do will likely no doubt be wrong, but I still have time to work out a plan.
I am curious to know what others have done in this situation, or if our readers have similar issues. If you have a thought on what I should do, or if you have experience with this kind of dilemma, I would love to hear your thoughts. Please email me at Jonathan.jones@fefundinfo.com
For now, I will continue as I am, investing what I can and allowing their savings to accrue. Future me, however, is already lamenting the choice I will likely face when my kids are older.
Jonathan Jones is editor of Trustnet. The views expressed above should not be taken as investment advice.