[Finance] OT - Savings account for children

[Solid at the back]

Wonder if anyone on here can give me some advice.
Have just had our first child and want to put some money away into an account for him each month, so he's got some savings for a deposit or what ever.
I've had a look around but I think if we opened an account in our sons name, it automatically becomes his account at 18?
Is there anyway we can avoid this? I know that when I was 18 and if I recieved a lump some of a few thousand I'd of blown it on nights out etc.
Ideally we'd like to give it to him when we see fit.

 

[mejonaNO12 aka riskit]

We have just set up a Nationwide Future Saver account (3.5%, 1 withdrawl allowed per year without effecting interest). The rate is 2.5% if you're not already a nationwide customer.

You can save up to 5k per year (not that we would )

"Once the child has reached 18 years and six months old the money will transfer to an instant access savings account and the terms and conditions and interest rate applicable to that account at that time will apply. The account will remain in the name(s) of the adult(s) (with parental responsibility) until the adult(s) transfer the new account, into the child’s sole name."

From that point you can move the money where you want as far as I understand it.

For those who understanding banking terminology, am I right in thinking I could be a RIGHT GIT and keep the money for myself when my child turns 18 and the money simply moves into my a savings account in my name? Or is this account 'frozen' until I move it into the names childs possession?

 

[dazzer6666]

Setting it up as a discretionary trust would solve the problem......plenty of advice online how to do this and it doesn’t need to be expensive

Worth a read :

https://www.thisismoney.co.uk/money/howmoneyworks/article-4861064/How-away-money-control-trust.html

 

[juliant]

Wonder if anyone on here can give me some advice.
Have just had our first child and want to put some money away into an account for him each month, so he's got some savings for a deposit or what ever.
I've had a look around but I think if we opened an account in our sons name, it automatically becomes his account at 18?
Is there anyway we can avoid this? I know that when I was 18 and if I recieved a lump some of a few thousand I'd of blown it on nights out etc.
Ideally we'd like to give it to him when we see fit.

The scheme i set up when my youngest was born is due to mature in 18months when he hits 18. I know how you feel. Hes due for a nice windfall in 18 months but alas hes a nightmare with money and the ex wife doesnt help ! I am now faced with no choice except giving him the money and i would of rather kept control of it until he has matured a bit and will appreciate that it could set him up in a 1st place etc

My advice avoid the goverment 'savings' scheme if you do want to keep control

 

[dazzer6666]

The scheme i set up when my youngest was born is due to mature in 18months when he hits 18. I know how you feel. Hes due for a nice windfall in 18 months but alas hes a nightmare with money and the ex wife doesnt help ! I am now faced with no choice except giving him the money and i would of rather kept control of it until he has matured a bit and will appreciate that it could set him up in a 1st place etc

My advice avoid the goverment 'savings' scheme if you do want to keep control

Government scheme is closing anyway.......

As above, a trust fund would solve your problem....trust can determine when funds are released.

 

[juliant]

Government scheme is closing anyway.......

As above, a trust fund would solve your problem....trust can determine when funds are released.

Thanks but hes only 18 months away from it maturing. I can't do nowt with that money except give it to him (already spoken with the government trust fund people)

Gonna break my heart to see 18 years of my saving get blown but what can i do !

 

[Solid at the back]

The scheme i set up when my youngest was born is due to mature in 18months when he hits 18. I know how you feel. Hes due for a nice windfall in 18 months but alas hes a nightmare with money and the ex wife doesnt help ! I am now faced with no choice except giving him the money and i would of rather kept control of it until he has matured a bit and will appreciate that it could set him up in a 1st place etc

My advice avoid the goverment 'savings' scheme if you do want to keep control

I done the same when I was 18, such a waste.

 

[Solid at the back]

We have just set up a Nationwide Future Saver account (3.5%, 1 withdrawl allowed per year without effecting interest). The rate is 2.5% if you're not already a nationwide customer.

You can save up to 5k per year (not that we would )

"Once the child has reached 18 years and six months old the money will transfer to an instant access savings account and the terms and conditions and interest rate applicable to that account at that time will apply. The account will remain in the name(s) of the adult(s) (with parental responsibility) until the adult(s) transfer the new account, into the child’s sole name."

From that point you can move the money where you want as far as I understand it.

For those who understanding banking terminology, am I right in thinking I could be a RIGHT GIT and keep the money for myself when my child turns 18 and the money simply moves into my a savings account in my name? Or is this account 'frozen' until I move it into the names childs possession?

This seems like good option, right now I'm thinking something like this where I can keep hold of it until he's say 25 or set a savings account up in my name and just transfer it to him when he's mature enough?

 

[father_and_son]

Wonder if anyone on here can give me some advice.
Have just had our first child and want to put some money away into an account for him each month, so he's got some savings for a deposit or what ever.
I've had a look around but I think if we opened an account in our sons name, it automatically becomes his account at 18?
Is there anyway we can avoid this? I know that when I was 18 and if I recieved a lump some of a few thousand I'd of blown it on nights out etc.
Ideally we'd like to give it to him when we see fit.

Friendly Society accounts allow you to save a small sum (£25 a month I think) for 10years and if you let the account mature, there is a bonus added. Very under-advertised savings option. I had one for _and_son that matured at 10yo and a second at 20yo. He'll get them both then. Won't be a massive sum of money but enough to help with a car or uni debts or something. And 20 is a reasonable age to have started being sensible!

 

[Weststander]

Invest instead in a shares ISA, in your name on their behalf, with Hargreaves Lansdown. We spent many years putting a regular sum plus b’day/xmas money into ‘best buys’ childrens savings accounts and achieved next to nothing above the capital. Then a few years later I invested all the sums into the HL fund and the growth has been fantastic. HL’s charges are miniscule, they take small monthly sums, and I researched/chose a fund which is highly rated (not in trendy unprofitable tech companies, with a share price built on hope).

p.s. reading the above comments, my plan also gives us control when we give them the cash!

 

[worthingseagull]

pay monthly into a junior isa and choose an adventurous fund like emerging markets and forget about it - this will give him the biggest nest egg at 18 (just keep an eye in last 3/5 years) and cash out if its had a phenomenal year
Simples

 

[Leekbrookgull]

For us we used a approved F/advisor for 'our two' and went for 'Bond's over 15 years (well what not a better way to spend child benefit if you can afford it) at sixteen we moved it into ISA accounts,plenty of options available,just speak to other people who have the same like minded approach.

 

[bluenitsuj]

We set up an ISA stocks and shares for our daughter but in her mums name. It stays in my wife's name until she wishes to transfer it to our daughter who, although is 18 in June, wont be seeing a penny for a few years yet. Certainly enough for a deposit on a house.

We also started a pension for her many years ago so she can take over after Uni and keep paying it.

 

[Weststander]

We set up an ISA stocks and shares for our daughter but in her mums name. It stays in my wife's name until she wishes to transfer it to our daughter who, although is 18 in June, wont be seeing a penny for a few years yet. Certainly enough for a deposit on a house.

We also started a pension for her many years ago so she can take over after Uni and keep paying it.

Good plan, same as us.

 

[Sorrel]

We did Junior ISAs for our children, which they "get" when they are 18. Though actually to get the money took quite a bit of work for them - going into a branch and proving their identity and then waiting a few weeks. It wasn't just an instant "here's some money" kind of thing.

But , yes, they can spend it all if they want. The first child of mine is good with money and now has multiple savings/share/help to buy ISAs accounts with more in them than we gave her (but then she decided to work rather than go to Uni). We will see if the second is as frugal when they get their chance in a few months.

 

[Sirnormangall]

Thanks but hes only 18 months away from it maturing. I can't do nowt with that money except give it to him (already spoken with the government trust fund people)

Gonna break my heart to see 18 years of my saving get blown but what can i do !

Will your son be open to negotiation? Suggest that he spends a bit but then put the rest in an account in your joint names and ensure withdrawals can be made only on both of your signatures.

 

[GT49er]

Word of advice - avoid National Savings (NS&I). I invested money for my kids in a scheme which matured with a bonus every five years, with a final bonus when they reached 21. Decent rate of interest too.
Then some planks (I believe it was the Government, but it might have been NS&I themselves.....might even have been EU legislation....I don't know) changed the rules, and NS&I wrote to the kids on their 16th. birthdays telling them that someone's been investing money for them, it's their's now, what would they like to do with it! I (unwittingly at first) opened the letters, and reinvested the money and gave it to them at 21 (I think I gave up with 21 and gave the younger ones the dosh when they were 18.
Such schemes, however, totally fu..ck up grandparents, who may want to leave an 18th. or 21st.birthday present - they may well be dead before some bureaucrat decides to hand over the money to the children when they hit 16. Some investment for the kids future that! Happy 16th. dear - here's a few thousand pounds!

 

[juliant]

Will your son be open to negotiation? Suggest that he spends a bit but then put the rest in an account in your joint names and ensure withdrawals can be made only on both of your signatures.

Im hoping that may be an option. We have had a chat briefly as he knows its coming and im trying to get the message across what this could do to help him. But there will be influences from above if you get my meaning. He will be leaving college around the maturity time and if all goes to plan may need a works vehicle. Hoping the 2 coincide with a bit of maturity thrown in for good measure !