Where to invest money for my son?

Jannie40

Hi

I'm a total novice to this saving lark so some advice would be most appreicated. I have £1000 to invest for my 14 year old son, should I take an ISA out in my own name or should I just look for a high interest account to hold the money in? Thanks in advance

Robert_Sterling

ISAs though tax free do not pay particularly high interest rates.
As your son is unlikely to have to pay tax put the money in an account in his name.
If you fear he might spend the money then put it in an ISA in your name.

jonesMUFCforever

I'm not sure if this is a new Inland Revenue ruling but I have heard that RE accounts ie in the name of an adult on behalf of a child are no longer eligible for gross interest.
It seems that IR are clamping down and some banks have been sending out letters to say that either the name on the accounts have to be changed to the child or the interest will be taxed at source.
If this happens of course the child can withdraw the money at will.

Robert_Sterling

I have not previously heard this but I have noticed that some Building Societies [ e.g. Cheshire and others ] allow the child to be the first named on an account opened for the child by grandparents.

jonesMUFCforever

Robert_Sterling wrote:

I have not previously heard this but I have noticed that some Building Societies [ e.g. Cheshire and others ] allow the child to be the first named on an account opened for the child by grandparents.

Could this also be because if they ever de-mutualised then each child would get shares/handout and not just parent/grandparent named?

Robert_Sterling

Whereas in the past Some Building Societies demutualised and members got windfalls those days are long gone. However now we have moved on to Merger Mania. There are 63 Building Societies left. Three are going shortly. Portman merges with Lambeth, Newcastle with Universal and I forget who with Mercantile. That will bring the total down to sixty. You have got to be in to win. Carpetbagger.com now answers to the name ipoints. There is a forum call mutuals there.