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  • FIRST POST
    • lush walrus
    • By lush walrus 7th Sep 17, 7:26 AM
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    lush walrus
    Where's best for our children's money...
    • #1
    • 7th Sep 17, 7:26 AM
    Where's best for our children's money... 7th Sep 17 at 7:26 AM
    Our children are starting to accumulate savings and at the moment we have the money in kids savings accounts and regular savers. Our oldest has about 30000 our youngest 4000 we ideally are thinking we could look for something to suit the range - it may not be possible.

    Really I am now starting to think we should add a bit of risk to their money. It's money from us, they don't know they have it and they have plenty of years to leave it sat somewhere hopefully growing.

    I know it's how long is a piece of string but any bright ideas? Many thanks
Page 1
    • tim_n
    • By tim_n 7th Sep 17, 8:14 AM
    • 1,568 Posts
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    tim_n
    • #2
    • 7th Sep 17, 8:14 AM
    • #2
    • 7th Sep 17, 8:14 AM
    I plugged £2,880 into a SIPP, vanguard LS80. About 10k into cash S&S isa with coventry, the rest is now going into S&S ISA with vanguard.

    I may consider topping the stakeholder up with £240 a month starting from next april for a couple of years. It's probably the best thing you can do for a kid as 65 years compounding reinvestment will give them a very healthy retirement and they'll have more cash when they're earning when they need it to start their life with minimal investment in the early years.
    Last edited by tim_n; 07-09-2017 at 8:31 AM.
    Tim
    • FatherAbraham
    • By FatherAbraham 7th Sep 17, 9:00 AM
    • 737 Posts
    • 561 Thanks
    FatherAbraham
    • #3
    • 7th Sep 17, 9:00 AM
    • #3
    • 7th Sep 17, 9:00 AM
    Our children are starting to accumulate savings and at the moment we have the money in kids savings accounts and regular savers. Our oldest has about 30000 our youngest 4000 we ideally are thinking we could look for something to suit the range - it may not be possible.

    Really I am now starting to think we should add a bit of risk to their money. It's money from us, they don't know they have it and they have plenty of years to leave it sat somewhere hopefully growing.

    I know it's how long is a piece of string but any bright ideas? Many thanks
    Originally posted by lush walrus
    You're going in the right direction, asset-allocation wise.

    You have't told us how old they are, which makes suggesting appropriately rather difficult. Still, a child who has no liabilities or outgoings in the near future almost certainly shouldn't be wasting thirty thousand pounds in a savings account - and perhaps more so found an even younger child.

    Higher-return asset classes should be used, perhaps a good mix of global equity, securitized real estate, and high-return debt.

    Of course, you should have invested the assets in that stuff years ago.

    Warmest regards,
    FA
    • cloud_dog
    • By cloud_dog 7th Sep 17, 9:17 AM
    • 3,254 Posts
    • 1,816 Thanks
    cloud_dog
    • #4
    • 7th Sep 17, 9:17 AM
    • #4
    • 7th Sep 17, 9:17 AM
    Our children are starting to accumulate savings and at the moment we have the money in kids savings accounts and regular savers. Our oldest has about 30000 our youngest 4000 we ideally are thinking we could look for something to suit the range - it may not be possible.

    Really I am now starting to think we should add a bit of risk to their money. It's money from us, they don't know they have it and they have plenty of years to leave it sat somewhere hopefully growing.

    I know it's how long is a piece of string but any bright ideas? Many thanks
    Originally posted by lush walrus
    If it is in the child's name (Bare Trust) I'd be interested to know how you 'get around' the Inland Revenue regulations on interest of more than £100 from parents money?

    EDIT: If it is in the childs / childrens names then you need to seriously consider the fact that the money legally belongs to the child, even if you haven't told them about it. There have been stories in the past of wealthy children taking parents to court to force them to allow the child to take ownership of the money (not responsibility as that occurs at 18 in the UK).
    Last edited by cloud_dog; 07-09-2017 at 9:21 AM.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • xylophone
    • By xylophone 7th Sep 17, 10:42 AM
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    xylophone
    • #5
    • 7th Sep 17, 10:42 AM
    • #5
    • 7th Sep 17, 10:42 AM
    https://www.gov.uk/savings-for-children

    If you have given this money and it is outside tax privileged accounts (eg JISA), then you have created a parental settlement.

    https://www.professionaladviser.com/retirement-planner/feature/2300647/how-not-to-fall-foul-of-parental-settlement-rules

    The money belongs to the child absolutely and he has the right to access and control from the age of 18. (16 in Scotland).

    When a child becomes responsible for his own tax etc affairs, he needs to know about money to which he is beneficially entitled.
    • lush walrus
    • By lush walrus 7th Sep 17, 4:56 PM
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    lush walrus
    • #6
    • 7th Sep 17, 4:56 PM
    • #6
    • 7th Sep 17, 4:56 PM
    Hi all thanks so much, I'm just running off out but the children are 2, 4 and 7 so all pretty young still..
    • Malthusian
    • By Malthusian 8th Sep 17, 11:20 AM
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    Malthusian
    • #7
    • 8th Sep 17, 11:20 AM
    • #7
    • 8th Sep 17, 11:20 AM
    If it is in the child's name (Bare Trust) I'd be interested to know how you 'get around' the Inland Revenue regulations on interest of more than £100 from parents money?
    Originally posted by cloud_dog
    Two obvious answers: 1) Junior ISAs 2) they don't, but for the sums being discussed it's quite possible that even after adding them onto the parents' own savings, the interest doesn't exceed the parents' savings income allowances.

    With a minimum 11-year timeframe before the money can be accessed, there is really no point keeping the money in cash to be eroded by inflation.
    • cloud_dog
    • By cloud_dog 8th Sep 17, 11:57 AM
    • 3,254 Posts
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    cloud_dog
    • #8
    • 8th Sep 17, 11:57 AM
    • #8
    • 8th Sep 17, 11:57 AM
    Two obvious answers: 1) Junior ISAs
    Originally posted by Malthusian
    It was a rhetorical question as the money does not appear to be in JISAs. The OP states:

    "...at the moment we have the money in kids savings accounts and regular savers."

    These could be JISA type accounts but without confirmation I think it is reasonable to assume they are not.

    2) they don't, but for the sums being discussed it's quite possible that even after adding them onto the parents' own savings, the interest doesn't exceed the parents' savings income allowances..
    Originally posted by Malthusian
    Yes but, the money is not, I point you back at the above quote from the OP which stated 'kids accounts'; for this to be the accounts are likely (absolutely) a bare trust in the child name with the parents. So, the original £100 tax rule applies.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • lush walrus
    • By lush walrus 8th Sep 17, 1:34 PM
    • 1,927 Posts
    • 1,599 Thanks
    lush walrus
    • #9
    • 8th Sep 17, 1:34 PM
    • #9
    • 8th Sep 17, 1:34 PM
    I plugged £2,880 into a SIPP, vanguard LS80. About 10k into cash S&S isa with coventry, the rest is now going into S&S ISA with vanguard.

    I may consider topping the stakeholder up with £240 a month starting from next april for a couple of years. It's probably the best thing you can do for a kid as 65 years compounding reinvestment will give them a very healthy retirement and they'll have more cash when they're earning when they need it to start their life with minimal investment in the early years.
    Originally posted by tim_n
    Thank you, yes that is my concern we are keeping money for them that is depreciating, not our brightest move!

    I'll have a look into those, but the big message from you seems to be to get the money into an s and s isa. Many thanks
    • lush walrus
    • By lush walrus 8th Sep 17, 2:06 PM
    • 1,927 Posts
    • 1,599 Thanks
    lush walrus
    You're going in the right direction, asset-allocation wise.

    You have't told us how old they are, which makes suggesting appropriately rather difficult. Still, a child who has no liabilities or outgoings in the near future almost certainly shouldn't be wasting thirty thousand pounds in a savings account - and perhaps more so found an even younger child.

    Higher-return asset classes should be used, perhaps a good mix of global equity, securitized real estate, and high-return debt.

    Of course, you should have invested the assets in that stuff years ago.

    Warmest regards,
    FA
    Originally posted by FatherAbraham
    Thank you, yes they have no liabilities or outgoings they are 2 4 and 7 so even the oldest is quite young so I think the next ten years or so won't be needed
    • lush walrus
    • By lush walrus 8th Sep 17, 2:40 PM
    • 1,927 Posts
    • 1,599 Thanks
    lush walrus
    If it is in the child's name (Bare Trust) I'd be interested to know how you 'get around' the Inland Revenue regulations on interest of more than £100 from parents money?

    EDIT: If it is in the childs / childrens names then you need to seriously consider the fact that the money legally belongs to the child, even if you haven't told them about it. There have been stories in the past of wealthy children taking parents to court to force them to allow the child to take ownership of the money (not responsibility as that occurs at 18 in the UK).
    Originally posted by cloud_dog
    Thank you for your contribution. We don't 'get around' anything, our accountants are aware of the girls interest and apportion the girls tax obligations to our annual returns. We pay plenty of different taxes with our businesses, we don't have a massive interest in fiddling the UK out of one or two hundred pounds of income tax! I am asking the question as I am very aware the current set up is depreciating their money. We as adults are investors, not savers so are without the skills to provide the right decision for them - thus the questions.

    To clarify our girls understanding of their money, the money is not a big secret just that they have varying levels of understanding of accounts and money. Our youngest does not have a concept of paper let alone money. Our four year old empties her piggy bank every month or so at the bank but does not understand value of money. She jumped on her bed and broke it and told us we could use her piggy bank money to pay for it. So that's her understanding. Our oldest has the interlect to purchase and count money but money sat in an account she is aware of but doesn't really have interest in using. No big secret just age related ignorance. If I asked any of them shall I move your money into a higher risk asset do you mind not one would know what I would be questioning.
    Last edited by lush walrus; 08-09-2017 at 2:44 PM.
    • Malthusian
    • By Malthusian 8th Sep 17, 4:03 PM
    • 3,294 Posts
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    Malthusian
    She jumped on her bed and broke it and told us we could use her piggy bank money to pay for it. So that's her understanding.
    If she understands that you can't take more money off her than she actually owns, no matter how much she's liable for, she's shown an extremely good understanding of UK bankruptcy law.
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