Where to put my children's monies?

TurnaroundSue

Hi - My mum has been investing in a policy for my 2 children and it has paid out to a very nice sum of £3750. My son is 15 (16 in July) and my daughter is 10.

I plan to invest these monies so that when they are 18 my mum can give them a nice lump sum for their birthdays. However, where do you think it is best to put these monies?

I was thinking of splitting the monies between them both, but my daughter will then have more than my son when it comes to her 18th and I didn't want my son to think that she would be getting more than him. I also have been on the NS&I website and I notice that you can only invest a sum for a minimum of 5 years, which won't be any good for my son as he will be 18 in around 2 years and 9 months. They have some monies in children's bonds already, so not sure whether this rule would still apply to new monies?

Any advice you are able to give will be greatly received. As my mum has invested her monies in this plan, I want my children to get the best return on these as possible

Many thanks

opinions4u

1) Half the money - if your son chooses to invest his when he receives it that's up to him. If he chooses to spend it, you can show him in 8 years time what the benefits of saving would have been!

2) You could give your son the money at 16 and take advantage of his ISA allowance - possibly seek out a 2 year fixed rate ISA at that time.

3) Between now an then there are some decent fixed rates on the market. Have a look at https://www.moneysupermarket.com and see what best fits the bill.

TurnaroundSue

Thanks opinions4u. I really do not want my children to know that the money is there until their 18th birthday. I feel that if my mum gives it to them now, that what does she do for their 18th? Also I think they will understand the meaning and its value more then than they would now.

I will definitely go to moneysupermarket and see what is there, but also see if there is anything I can do about an ISA account in his name (without him knowing!!!!)

Thanks for your reply

opinions4u

To open an ISA account in his name without his knowledge could potentially be a form of identity theft! There are also legal requirements to ISAs that mean various letters confirming tax status of the account are then issued via the post. Another danger is that if he is unaware of an account and chooses to open his own ISA you have a 2 ISAs/1 tax year problem!

Some providers offer fixed rate ISAS for a fixed term. You could involve him in the decision to open one and stress he can't actually get to the money (care though - most will allow withdrawals subject to penalty - just don't tell him!).