For a 16-year-old, there are a few safe options to consider:
Junior ISA (JISA): This is a tax-free savings account specifically for under-18s in the UK. She can put money into a cash JISA, a stocks & shares JISA, or a combination, depending on risk tolerance.
High-interest savings account: Some banks offer accounts for minors with competitive interest rates. The money remains accessible but safe.
Investment accounts (with guidance): If she and her guardians are comfortable with some risk, a managed investment account could offer growth over time.
It’s important that any decision is made with a parent or guardian involved, and she understands the risk vs reward. Consulting a financial advisor is also a good idea, especially for a significant sum like £40,000.