Use your child - best child savings account

Bogden

I don't think that's right, as my wife and I each have a Children's regular saver account in trust for our daughter. I went into a branch to show proof of identity for both accounts and they never said anything.

rb10

That is not correct. You are allowed to have multiple Children's Regular Savers. Direct them to their own web site: http://www.halifax.co.uk/savings/ImportantInfo/ImpInfo_ChildRegSaver.asp

One account per person - you can only open 1 account for one child. However, other people can also open an account for the child too e.g. relatives, friends. Accounts can only be held by 1 or 2 trustees jointly on trust for a child. Only 1 account per trustee per child

You do, however, have to have a separate Save4It, which must be in the same names as the Regular Saver. So your daughter's Nana's Reg. Saver cannot be linked to the Save4It that you hold for your daughter, but to one in her name, trustee for your daughter. I wonder if this could be where the problem is?

baby_boomer

That £100 gross tax free interest limit per parent is starting to look a lot higher than six months ago :rotfl:

Mikeyorks

GAILEY wrote: »

Is the interest of £100 from the investment of sums by each parent or from both parents??

Each .... parent has their own entitlement, which is the more sensible way to maximise the allowable interest. From DirectGov :-

Each parent has a separate £100 limit. So if both parents contribute equally your child could get interest of £200 a year without either of you having to pay tax on it.

cue

right there seems to be a lot of if's and but's and advice - i'm confused.

My situation :

Child has earned and may (hopefully) earn their own money, which is only going to be on irregular months and for varying amounts - all sub £200 per time. So say one month £50 then nothing for a couple of months then £120 etc etc.

So a regular saver isn't suitable (I know the end account could be though)

Interest isn't getting anywhere near £100 per annum so what are the best options - I don't want to tie it all up in a trust fund also.

My thoughts so far relate to setting up a normal savings account - with online access (probably paying a percentage or two's interest) then set up a regular saver like the HBOS one paying 8% and make regular payments to that from the normal saver.....

Is this the best way of doing it and then - which accounts would you recommend?

IWtone

Thanks as always for all the useful info. My problem is that my grandchildren live in the USA so what savings account options do I have (they will be 4 and six this year)?

Jonathan70

Can anybody comment on the tax implications of the following :-

I've opened a Halifax childrens regular savers (8%) account for each of my two children and I'm planning on funding it with a payment of £100 per month made up from ChB, ChT Credits & extra from me. This would currently give them each ~£96 pounds gross interest per annum so less than the £100 pounds limit. When these mature they would go into 2 save4it accounts and then from there the plan is to move the money into a better childrens account (possibly the YBS oneday account) where the funds should build into a reasonable amount over the next 12-14 years.

My question is once I've given them the money via the regular saver am I correct to think that one the money is moved to the save4it and then into a.n.other childrens account it has no further tax implications for me regarding the £100 earned interest limit as it is now classed as their money not mine?

Thanks,

Jonathan

baby_boomer

That is not correct. The money and the accruing interest will always be regarded as a gift from you - which, of course, it was!

Mikeyorks

Jonathan70 wrote: »

My question is once I've given them the money via the regular saver am I correct to think that one the money is moved to the save4it and then into a.n.other childrens account it has no further tax implications for me regarding the £100 earned interest limit as it is now classed as their money not mine?

No - that isn't correct. But neither is your interest calculation. You've based the interest on the final balance (£1200) earning 8% ...... when only the first £100 has been in for a full year? And the last £100 will have been in the account less than a month. You do get 8% - calculated on a daily basis - but only for money actually in the account ...... you don't get 8% on money you intend putting in the account, but which is not yet there!

If you put £100 monthly into the 8% RS .... the average balance will be just over £600 ..... and the annual interest will be circa £51.

Calculator here :-

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#calculator

grannyjo

My local halifax have said an adult can be a trustee for any adult type saving account.
I have a regular saver, a monthly saver and savefor it for each grandchild. I am about to open a fixed rate websaver at 4.1% (I think its 5 years at over £500. This beats the Yorkshire but it is tied up.
I have also found the uk bank of Cyprus (it comes under UK law) will open trustee accounts for fixed rate bonds.
Also Nationwide bonds can be opened by a trustee, if the child is 7 plus.
Has anyone else found good homes for grandchildrens money. It makes a big difference if the amount is quite large. My parents left each child £40,000 and I have spent a lot of time recently looking for a better home than the Nationwide.