trustee savings accounts

guygamps

I have four children ages 7,9,14 and 16.

My mother passed away and left approx £5000 to each child.

Her instructions are that the money be used to assist one off expenses such as musical instruments, and that what left is passed to their control on becoming 18. In the case of my eldest that will likely be most of it, and in the case of my youngest, proportionally more would be used to assist her in the remaining 10 years to her 18th.

Our solicitor/executor has recommended a trustees savings account for each child.

bearing in mind the following:

a) account will be opened with a single lump sum deposit
b)further regular monthly savings will not be put in this account
c)occasional withdrawals may be needed, but a notice period on that (up to 30 days) is perfectly acceptable.
d) non of my children are tax payers, the eldest is still in full time education (A levels), then planning to go to Uni
e) the "term" of the investment will vary from as little as 16 months in the case of my eldest who is 18 in Februrary 09 to just over 10 years in the case of my youngest who turns 8 in december.

My wife and I will be joint trustees.

What savings product would forum members recommend?

thanks

Guy

opinions4u

Could be different for each child.

Does the youngest qualify for Child Trust Fund? If so, consider topping this up with any funds that you wouldn't want them to have until they are 18. The balance could sit in something as simple as a Halifax Save4it account payng 5.55% (rate cut likely in November though).

For the younger 2, assuming CTF doesn't apply, look at investing the bulk of the money in to either a bare trust with somebody like Alliance Trust (this money can't be touched until they are 18) which would expose them to the downs and ups of the markets, or, if you prefer safety, find a provider of fixed rate accounts who will operate on a trustee basis. I know Halifax do (got my son's money there), although their rates at around 6% can be beaten. Easier access money in the Halifax Save4It.

14 year old I'd split between Save4it (easier access) and a suitable fixed rate.

16 year old you could do with digging out a suitable easy access account that accepts trustees and pays a half decent rate, as well as a suitable fixed rate.

Regularly (e.g. annually) review any savings accounts to ensure rates haven't diminished compared to the top payers in the market.

Check out a site like https://www.moneysupermarket.com for the best rates and make a couple of phone calls to see which providers will operate trustee accounts.

guygamps

Thanks

None of the children qualify for CTF, it was introduced to late for my wifes and mine breeding habit to benefit!

occasional withdrawals WILL be necessary, certainly in three of the four cases, but a notice period would be fine.

I do not want to go near the stock market, but prefer a cautious approach to high street bank/building soc product

guy

guygamps

I have looked at money super market .com and a few other sites, and cannot find a comparison table of trustees savings accounts to see who is offering the best rate.

Guy

opinions4u

Unfortunately you need to go a step further and ring the best buys until you get one that says "yup, we'll do trustee status on that account".