regular savings

mountdp

I have a 16 year old son who receives disability allowance of £240 a month, I have saved £6000 so far in a first direct account but I want to know what would be the best way to continue to save regularly in his name. At the moment the account is in my name. I want to put all the money in one account.

Reaper

Is there any reason he can not operate the acount himself? If not then if you are a tax payer and he is not it would be much better having him operate it so that no tax is paid on the interest (he needs to fill in form R85 to get it paid tax free).

If he can not operate the account then you could open it in his name with you controling it.

If he does pay tax then an ISA would be a good start.

Otherwise it depends how much access is needed to the money. For example with regular saver accounts you pay in the same amount in each month and get a decent rate of interest but you can't normally access the money over the 1 year period they typically run for.

mountdp

He could operate it himself with me as a controller, if so what would be the best savings account in your opinion as there are so many and some seem to have age restrictions. It would be good if he could access it during a year but not essential, as he has a normal savings account with Halifax already and he can use that as his access account.

Reaper

How about the Halifax Regular Saver?

As he is an existing customer it should be quick to open - essential as the interest rate is likely to drop very soon. If you phone or get down to the branch quickly you can get 7% fixed. You need to commit to saving a figure between £25 - £500 per month. It closes after 12 months after which you get your money back.

I suggest moving quickly if you want to go ahead. If you want to operate the account it may be trickier. They should be able to tell you the options - having it in trust or having Power of Attourney are two possibilities but it might slow things down. Make sure to ask for the interest to be paid tax free too if he is not a tax payer.

This won't help with the money you have already saved. I'd look for an Instant Access account for that so you have access to funds during the year should the need arise.

By the way - to save you getting upset at the end of the year you won't get 7% of the total amount of money saved because most of the money will not have been in there for a full year. It is worked out on a daily basis. See Martin's article on the main site if you need more explanation of this.