Is there such a financial product??

Catglee · 08-02-2021 7:04pm #1

And what is it called.?

I want to invest a small lump sum and thereafter do a monthly regular dd into same into the financial product that will in turn invest in the market much like my pension.
It is for my newly arrived nephew and ideally it would have the flexibility that it would mature in 25 years but I would intend to stop paying into it after 20 years (circa upper retirement age).

EDIT... I would like to put it in the name of the child and if possible invest in a managed fund.

Thank you

cronos · 08-02-2021 7:06pm

Catglee wrote: »

And what is it called.?

I want to invest a small lump sum and thereafter do a monthly regular dd into same into the financial product that will in turn invest in the market much like my pension.
It is for my newly arrived nephew and ideally it would have the flexibility that it would mature in 25 years but I would intend to stop paying into it after 20 years (circa upper retirement age).

Thank you

I believe you could do that by investing into an index fund such as the S&P 500 on most brokerage platforms such as Degiro for example.

SteelyDanJalapeno · 08-02-2021 7:07pm

I asked the same question last year, I was quickly told of Trading 212,
You can set an auto deposit from your bank once a month, and then you can create a pie of stocks and auto buy at market value every month, it will divide your deposit by their weighting in your pie.

SteelyDanJalapeno · 08-02-2021 7:07pm

cronos wrote: »

I believe you could do that by investing into an index fund such as the S&P 500 on most brokerage platforms such as Degiro for example.

Could do this too, but I believe taxes are higher?

Rustyman101 · 08-02-2021 7:08pm

cronos wrote: »

I believe you could do that by investing into an index fund such as the S&P 500 on most brokerage platforms such as Degiro for example.

wouldn't the tax be a nightmare with the 8 year deemed disposable rule ?

kal7 · 08-02-2021 7:13pm

I was going to say similar to cronos. I have a FTSE 100 tracker fund with a stockbroker firm.

That would seem to give you the flexible type of investment you looking for. Obviously you could lose money but you won't get any interest in a bank account these days.

the advantage as I see it, if one company fails they are replaced in the top 100 or 500 etc by another company.

cronos · 08-02-2021 7:31pm

Rustyman101 wrote: »

wouldn't the tax be a nightmare with the 8 year deemed disposable rule ?

It's a good question. I wish the stockbroker just generated a report that said you need to pay x.

Catglee · 08-02-2021 7:32pm

SteelyDanJalapeno wrote: »

I asked the same question last year, I was quickly told of Trading 212,
You can set an auto deposit from your bank once a month, and then you can create a pie of stocks and auto buy at market value every month, it will divide your deposit by their weighting in your pie.

Closed to new members at the moment, you can join a waiting list. Thanks

JibJabWibWab · 08-02-2021 8:36pm

Catglee wrote: »

And what is it called.?

I want to invest a small lump sum and thereafter do a monthly regular dd into same into the financial product that will in turn invest in the market much like my pension.
It is for my newly arrived nephew and ideally it would have the flexibility that it would mature in 25 years but I would intend to stop paying into it after 20 years (circa upper retirement age).

EDIT... I would like to put it in the name of the child and if possible invest in a managed fund.

Thank you

Who looks after your pension?

Assuming there is someone advising you on your pension, that same person would be would be able to offer advice on the investment you describe.

Putting money away for someone other than your own child is not as simple as you seem to think. There will be tax implications. You need professional advice, not Boards.ie.

Orobhsa · 08-02-2021 9:08pm

Insurance companies have products that might offer what you are looking for.

One example is Child Saving plan from Zurich.

https://www.zurich.ie/savings-and-investments/savings-options/childs-savings/

Other insurance companies may have similar savings products so you'll need to do some research to find a suitable product.

JibJabWibWab · 08-02-2021 9:10pm

Orobhsa wrote: »

Insurance companies have products that might offer what you are looking for.

One example is Child Saving plan from Zurich.

Other insurance companies may have similar savings products so you'll need to do some research to find a suitable product.

The first 3 words of your link, "As a parent".

OP is an uncle.

The easiest thing, IMO, and most likely to guarantee your title as "cool uncle", is to set up a savings/investment plan in your own name and hand the proceeds in cash form to your nephew when it is required.

It's not as straightforward as your imagined/described, and it will require some discipline on your part if the investment is lucrative, but it would mean you would have complete control and tax would not be an issue until you make it one.

Orobhsa · 08-02-2021 9:16pm

keep reading

Who's Child Savings Plus for?
Parents who wish to save for their children's future.
Relatives or god-parents who would like to put aside money for a child's future.
Those happy to save for a period of 5 years or more.

JibJabWibWab · 08-02-2021 9:26pm

Orobhsa wrote: »

keep reading

Who's Child Savings Plus for?
Parents who wish to save for their children's future.
Relatives or god-parents who would like to put aside money for a child's future.
Those happy to save for a period of 5 years or more.

I read it, but it's obvious who the product is aimed at.

The threshold for uncle to nephew is only 32,500 and the minimum investment is 75 per month so if the investment works out they could easily become taxable.

Having something like that in the name of someone who's not your own child could get messy. Best avoid.

Orobhsa · 08-02-2021 9:57pm

You are mixing up different things.

The OP can gift their nephew (or indeed anyone else) up to 3000 per annum without impacting the CAT €32,500 threshold.

If the OP was so inclined they could gift €60,000 to the child over 20 years. No capital acquisition tax applies.

JibJabWibWab · 08-02-2021 10:06pm

Orobhsa wrote: »

You are mixing up different things.

The OP can gift their nephew (or indeed anyone else) up to 3000 per annum without impacting the CAT €32,500 threshold.

If the OP was so inclined they could gift €60,000 to the child over 20 years. No capital acquisition tax applies.

My understanding is you cannot deposit money into a financial product in the name of a third party (minor) under the small gift exemption.

My understanding is you would have to gift the child's parent and have them place it directly themselves in the financial product.

If I am wrong I would welcome correction, as this understanding has influenced my own provisions for "niblings"...

Orobhsa · 09-02-2021 7:58pm

You've been misinformed.

OP just sets up a direct debit from their bank account and it is paid to the zurich policy account. Money doesn't go parents.

OP would be the policy holder but the policy is assigned to the child so legally it's the child's money.

Application form also needs to be signed by child's parent / legal guardian.

Is there such a financial product??

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