Protecting Kids Savings

phyonics

Hi

I'm after advice for a friend who is on income support. She is a single parent but her daughter has over 5K in a savings account. She has found out that her daughter having this much may affect her benefits. The money in her daughters account has come from her ex-husband and birthday etc gifts over the 9 years of her daughters life.

My questions are:

1 - Is it true that her daughters savings should affect her benefit

2 - If so, is there any way of moving the money elsewhere to stop this happening.

A quick reply would be great as we are getting together on Sunday so I'd like to be able to pass on some helpful advice.

Cheers folks

Marko

ReportInvestor

That is very harsh, if 1) is correct, and surprises me.

One piece of good news is that the level of savings an adult may have before income support is affected rose from £3K to £6K on April 6th 2006 - JobCentre link

Speculator

Withdraw enough money so that the amount in the account is below the £6000 limit.

Since she only have £5000.00, it should not affect her benefits. However, keep a watch on the balance in case interest takes it over the limit.

ReportInvestor

This MSE thread suggests that children might also need to keep below the same limits - ie £3K at the time of this thread and £6K?? now

The thread is about a fraud investigation, but don't be alarmed.

It appears that the benefits office will have access to records of past interest on accounts.

It may be worth moving the account to the child's name, rather than in you friend's name as trustee - if that is currently the case.

Fran says - on the link above
"I would certainly put the children's accounts in their names. As far as I know children can also have up to £3,000 savings [now £6K???] each."

But she advises checking this out with citizen's advice bureau.

I suggest you ask the same question in this specialist benefits & tax credits MSE forum

Wazza's update on the first link - The fraud people DID consider the children's accounts (trustee accounts) when investigating

Situation not 100% clear .

grumbler

phyonics wrote:

...but her daughter has over 5K in a savings account. .... The money in her daughters account has come from her ex-husband and birthday etc gifts over the 9 years of her daughters life.

I don't know the proportion, but if the account is registered to get interest tax-free, be aware that interest on money coming from ex-husband cannot exceed £100 p.a. I guess that total interest on £5K is £200+ p.a.). See, for example, this thread: children's savings account ...