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How can Grandparents save for Grandchildren?
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# 1
Heron
Old 04-01-2011, 11:41 AM
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Exclamation How can Grandparents save for Grandchildren?

Nobody wants our money.
Live in rural location.
Need to invest online for four grandchildren, some abroad.
British money laundering laws prevent me from opening savings accounts in the childrens names without passports, parents permission, even parents present in some cases, etc.
Want to put some money away, 4 years plus and get more than .05%.
Can anybody advise?
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# 2
datostar
Old 04-01-2011, 12:36 PM
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You could open Fixed Rate 4 or 5 year cash ISAs in your own names in the first instance (max. of 10,200 between you) then in subsequent years invest similarly over shorter terms so they all mature at the same time. You would then have a substantial tax-free sum to dispose of to your grandchildren as you wish.
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# 3
dasherman
Old 04-01-2011, 1:00 PM
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Interest rates on childrens accounts are often higher than adults accounts so it may be worthwhile persevering with the kids option if possible. Halifax are currently offering 6.00% fixed for 12 months.

http://www.moneysupermarket.com/savings/childrens/
Every little bit counts.
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# 4
jennifernil
Old 04-01-2011, 1:15 PM
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datostar......I think the point here is that this plan would still leave the money belonging to the grandparents, and what we grandparents want to do is give the money to the grandchildren in their own names.

OP, for grandchildren resident in the UK, have you checked whether you can open a childs regular saver with Halifax on-line? (or even by phone?) That only requires ID for you, and child's birth certificate. The certificate can be taken to a local branch by the parents for copying. You can save 100 per month per child by each grandparent.

Halifax also do have an account (a fixed rate one) that can be opened for a child, minimum 500 I think. However not sure of the rules for opening that one.

For those abroad, it's more difficult. Maybe an investment trust, but that should really be longer term. Again, not sure on the rules for those.
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# 5
DiggerUK
Old 04-01-2011, 1:30 PM
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Talking No ID needed for under 5K a year.

Heron,
Grandkids at Digger Mansions get a birthday sovereign each year.
No worries about tax, no worries about anything apart from when we give the coins to them, and we have decided that they won't be handed over till their 21st. We have even got promises off the parents that they will continue if we are gone.
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# 6
datostar
Old 04-01-2011, 7:13 PM
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Quote:
Originally Posted by jennifernil View Post
datostar......I think the point here is that this plan would still leave the money belonging to the grandparents, and what we grandparents want to do is give the money to the grandchildren in their own names.
Yes, I realise that and it's a situation I've recently found myself in. Our grandchildren are both in their teens now and I wanted to do something for them at 18. I noticed problems with the investments for children/young people such as designation (which doesn't really mean much because the investment is still yours), fiddly solutions like bare trusts, and the fact that some types of accounts give control of the funds to youngsters at 14/16 anyway. I realised that I could use an ex-PEP Stocks & Shares ISA which is in a sense frozen because I can't add to it other than by way of capital growth of the assets and re-invested dividends. That has reached 20,000 since the abolition of PEPs and still has a few years to go before the money is needed, therefore every chance of further growth. It seemed a logical step to make that the 'grandchildren fund'. I'd be hard pushed to make that kind of money from Childrens' Savings Accounts over the next few years, so I think that solves my problem. No tax implications either. Perhaps not everyone wants the grandchildren (or their parents!) to be aware of the money until the time comes either...
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# 7
jimjames
Old 04-01-2011, 8:22 PM
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Opening a designated childrens investment account does not require passport and id for the child just for you. One scheme is with Aberdenn Asset management but it is share based so there is some risk to capital.
Remember the saying: if it looks too good to be true it almost certainly is.
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