Use your child - best child savings account

arrazello

Thank you. That is much clearer to me.

I will set up a DD to pay monthly into his account when the DLA is paid into mine.

jennifernil

The Regular Savers are ideal when you want to save a bit every month, you can vary the amount if required, as long as you stay within the limits.

Then at the end of each year you will need to find an account to transfer the proceeds into, the Junior ISA may be suitable, but with plenty of spare personal tax allowance, you may be better going with whichever account gives the best interest rate.

Once he is over 18, there will be more accounts available to him, possibly better interest rates too, children's rates are not usually among the best available.

I answered on your other thread re looking after his money.

Froggitt

arrazello wrote: »

Thank you. That is much clearer to me.

I will set up a DD to pay monthly into his account when the DLA is paid into mine.

Be careful as this could look like you giving him money, in which case the £100 rule comes back in. You may need HMRC clarifying for you eg maybe the DLA needs to go direct to his account from the Govt.

jennifernil

If it was a regular saver, you could not send it direct to the account. There is a monthly limit, plus they are very strict on dates in many accounts.

The OP will have paperwork to say the child is receiving DLA, so this can be produced if requested.

arrazello

Thanks for thrashing this problem out with me.

Froggitt wrote: »

Be careful as this could look like you giving him money, in which case the £100 rule comes back in. You may need HMRC clarifying for you eg maybe the DLA needs to go direct to his account from the Govt.

That sounds like a good idea - getting money paid direct into his account and then I could use what was needed each month and save the rest.

But as jennifernil pointed out (btw, what is an OP?) - the regular savers do seem to have set limits per month and as he gets high rate mobility and high rate care allowance, his DLA exceeds any of the limits that I have seen. They also seem to have a no withdrawal policy and I could not afford to put all of the DLA aside, just a portion of it. Some months more than others, depending on needs.

My husband and I have been going over and over this all night. One worry that he brought up was "And what happens if I get made redundant again?"

My husband has been made redundant twice in the last ten years! The first time was not too bad because we got some redundancy pay and were able to cope until he got another job. the second time was pretty bad (no redundancy because he had only been in the job for two'ish years). He was out of work for 8 months! During that time, we had to claim JSA and housing benefit. He is worried if the same thing happens again then any money we have put aside for our son we will be forced to use.
So might be best if we saved and then put the money in a Junior ISA...

But I guess we can't worry too much about things that haven't happened yet.

Froggitt

OP = Original Poster.

Either its his money or its yours. If you want to get to it in event of redundancy or bills, its your money. As such, the interest should be classed as yours in the eyes of the revenue. BE VERY CAREFUL. I was investigated a few years ago by HMRC for unpaid tax on a kids account that I hadnt declared on my tax return. Eventually I showed that the source of the money was grandparents, but because I was named on the account, they were crawling where the sun dont shine, wanting all details of my financial affairs.

arrazello

Froggitt wrote: »

OP = Original Poster.
Either its his money or its yours. .

Sorry, I did not make myself clear, I meant that we will be forced to use any money we put aside, not through choice, because that is the rules of our benefit system. Use the savings before you claim.

I genuinely need to put money aside and leave it where it is for HIS future. My long term aim/hope - just in case any of his brothers should decide to take him into their family home after our deaths, that there will be money to pay carers etc. It's a massive ask and money should make that ask easier.

Froggitt

No I understand that. However it belongs to your son, do the Govt force you to use up his savings?

glittermonster

I just thought I'd get some advice on setting up savings for children.

We want a few accounts I think

1 for us to put into and use for big purchases and when he needs new clothes - £25pm maybe? (tho might just put this into my esavings thinking about it)

1 for him to have for birthday/christmas money - he's only 3 weeks old and he's got £55 already!

1 for us to put into for when he's older - not quite sure what we can afford - maybe £40pm?

arrazello

Froggitt wrote: »

No I understand that. However it belongs to your son, do the Govt force you to use up his savings?

My research suggests that any money under my access would be considered available to me. I think there is an amount you are allowed to retain (about 6 K, I think) but you would need to dwindle it down to that amount.
Anyway, that is a worry for another day, that hopefully, will never arise.

Better move the thread back on track
Maybe I go the Junior ISA route on an annual basis, I think that is untouchable as it is locked away until he is 18.
Then save his DLA, which will be untaxable as it is his income and less than the 7000 + he is allowed to 'earn'..

The only question is where do I save it and by what method?
BACS into his account and use what is needed (seems cleanest for tax purposes)
or BACS into my account and DD into his account?
I really don't want to have any mix ups or hassle with the HRMC in future.