Savings for 17 year olds

akadessie · 5 September 2017 at 1:37PM

My eldest is 16, 17 in November. We've saved over the years and built up approx £12K for him, and I'm now wondering how to get the best out of it until we actually hand it over. My plan is to build this up into a house deposit for him when he gets there (mid 20s or so). I'd prefer it to be a surprise. I think the way forward is to move the savings into a child saver account with Barclays, which pays 3.5% until his 18th birthday I think, but also to open up a Help to Buy ISA; who knows if these will still be paying out by the time he gets to actually buying, but the interest is pretty good and could include a decent sum if you do actually use as a deposit. Does this sound like the right way forward? I'm happy for the money to be tied up, but don't have much of a risk appetite.

Wookey · 5 September 2017 at 2:43PM

I wouldn't be keen on giving an 18yo access to that kind of sum, i would be more inclined to wait until he is earning for himself and can appreciate the value of money. You could whilst waiting pay for driving lessons for him from the pot and look to keep it in the highest savings accounts as possible or encourage him towards a help to buy isa with smallish payments from the pot as he increases it himself. Once your sure he is grounded and values what he has then surprise him with a lump sum payment into the isa with the balance.

There is also other things that could come up, is Uni likely? or perhaps learning a trade? If living away from home for Uni then some funds going towards expenses there would always be welcome, if learning a trade there can be transport and tool costs involved which would stand him in good stead for many years to come.

xylophone · 5 September 2017 at 3:16PM

If you and your husband pay your savings into an account held in bare trust for your son, he has the right to access and control at the age of 18.

He may wish to open a LISA then.

http://www.moneysavingexpert.com/savings/lifetime-ISAs

Perhaps you and your husband might each open a Nationwide Flex direct account and a joint Flexdirect, cycling in/out the required £1000 a month from an external account.

You could also open a Flexclusive monthly saver each.

After a year has passed, your son will be 18 and you can think what you would like to do with the cash.

Eco_Miser · 5 September 2017 at 4:07PM

Wookey wrote: »

... a help to buy isa with smallish payments from the pot as he increases it himself. Once your sure he is grounded and values what he has then surprise him with a lump sum payment into the isa with the balance.

Can't pay lump sums into a HTB ISA.

MallyGirl · 5 September 2017 at 4:31PM

akadessie wrote: »

My eldest is 16, 17 in November. We've saved over the years and built up approx £12K for him, and I'm now wondering how to get the best out of it until we actually hand it over. My plan is to build this up into a house deposit for him when he gets there (mid 20s or so). I'd prefer it to be a surprise. I think the way forward is to move the savings into a child saver account with Barclays, which pays 3.5% until his 18th birthday I think, but also to open up a Help to Buy ISA;

it can't be a surprise if you are thinking HTB as he will need to open it himself. I am planning to get DD to open one when she turns 16 as the rate is pretty good - she gets marginally better from her JISA but that is fully funded.
There seems to be a grey area where 16/17 year olds can have JISAs and adult products as well.

akadessie · 5 September 2017 at 5:32PM

Thanks all, to be honest my plan is to get the paperwork, fill it in, put it in front of him at the right moment and tell him to sign, and there's a good chance he'll sign without looking up from his phone and won't know what I've done. I can then keep the paperwork in a box and he'll have a load of money that he hasn't quite cottoned on to. Don't know how realistic that is.

He's probably going to university, but I am planning on paying for that as far as I need to from normal income plus student loan. I'd like to build up a secret pot of money for the day when he decides he wants to buy - I remember thinking back in 97 when I did it how remote the deposit seemed, whereas other stuff is always obtainable, if a stretch.

CorrieCooper · 6 September 2017 at 5:24AM

Yes, I was also thinking about HBT.

xylophone · 6 September 2017 at 9:09AM

he'll have a load of money that he hasn't quite cottoned on to. Don't know how realistic that is.

It's not realistic from the point of view of tax/any benefits he may need to claim.

Westie983 · 6 September 2017 at 10:24AM

akadessie wrote: »

Thanks all, to be honest my plan is to get the paperwork, fill it in, put it in front of him at the right moment and tell him to sign, and there's a good chance he'll sign without looking up from his phone and won't know what I've done. I can then keep the paperwork in a box and he'll have a load of money that he hasn't quite cottoned on to. Don't know how realistic that is.

He's probably going to university, but I am planning on paying for that as far as I need to from normal income plus student loan. I'd like to build up a secret pot of money for the day when he decides he wants to buy - I remember thinking back in 97 when I did it how remote the deposit seemed, whereas other stuff is always obtainable, if a stretch.

Although I get the idea you are trying to do, but if your son goes into the bank for any reason and asks about his accounts he will be given the balance of the H2B ISA, which you can deposit £200 each month, and he will have access to those funds to withdraw and spend as he wishes. H2B Isas are not fixed products.

You obviously will have to take a good few years to build up the pot of money, but he will know about the account, and he could remove all the money in the account as soon as its funded, either by you, or his contributions.

Keeping the paperwork aside may not mean he will not know about the account.

If you want to keep the money for him and him to not have access you will need to put the money in trust for him, and access passes to him at 21 or whatever age you decide on when the trust account is opened.

The other options currently on the markets, mean the children (young adults) have access to the funds at 18. This could be young saver accounts, JISA's and H2B Isas.

Westie983

MallyGirl · 6 September 2017 at 11:30AM

I have just tried to educate my DD about money so that she doesn't go wild when she comes into her money at 18. She knows she has a 'secret account' already as she got to the post before me one day but she just handed the statement over with a 'I don't think I am supposed to see this' comment.
She plans to do a 5 year course at uni so she may need some of it just to live on.
We also have the advantage that her wastrel cousin got given some money for his 18th which he spent on a car (but not insurance) and a lot of drink and drugs. He lost his licence and was booted out of his parents home. It has served as a brilliant example of how not to behave. Thankfully the lad seems to have turned his life around somewhat now and is back in contact with the family but he has many burned bridges to rebuild.

Wookey · 7 September 2017 at 11:55AM

MallyGirl wrote: »

I have just tried to educate my DD about money so that she doesn't go wild when she comes into her money at 18. She knows she has a 'secret account' already as she got to the post before me one day but she just handed the statement over with a 'I don't think I am supposed to see this' comment.
She plans to do a 5 year course at uni so she may need some of it just to live on.
We also have the advantage that her wastrel cousin got given some money for his 18th which he spent on a car (but not insurance) and a lot of drink and drugs. He lost his licence and was booted out of his parents home. It has served as a brilliant example of how not to behave. Thankfully the lad seems to have turned his life around somewhat now and is back in contact with the family but he has many burned bridges to rebuild.

This is something that sadly comes up on these forums fairly regularly, it isn't just about the son or daughter but the friends they have who can drag them down when money is freely available. Years ago you had to physically travel to a bank to get your money out, now there are ATM's everywhere and mobile phone banking,cards and apps that mean physical money is no longer required for most things at any time of day or night.

Savings for 17 year olds

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