Long Term Saving/Bond for child of 'tricky' parents

Spirit_2

The mum and dad are both drink/drug users, social services keep an eye on the children.

I have a small sum for each child which their late grandmother wanted them to have for when they are adults. Their mum and dad must not have access to it.

Any advice on what I should do that is in the best interests of the children .

Thank you

Essex123

Have a look at this account from Harpenden Building Society. No withdrawals are allowed from the account until the childs 18th birthday:

http://www.harpendenbs.co.uk/savings-childrens.asp

Also note the following:

The account must be in the sole name of the account holder and cannot be held by parents, trustees or guardians. If the account is opened in the name of a child less than seven years of age or the account is being opened on behalf of the child, then the adult opening the account should sign the form on the child's behalf.

So if the kids are under 7, you could sign the form rather than the parents for extra peace of mind.

Spirit_2

All suggestions welcome

opinions4u

Halifax allow you to open accounts with you as trustee and the children as beneficiaries. This would effectively mean that you control when the money is handed over to them.

Alternatively, you could look at setting up a bare trust by an investement company such as Alliance Trust. You have no control over the funds once invested, and they revert to the children at age 18.

I like the former for the control it gives you, and the latter for the potential investment returns, assuming the kids aren't already well in to their teens.

martinman3

There is also the Foxley Fund account from Chorley BS which prevents access before the child is 18 and is designed to be like a CTF in that annual subscriptions must be £1200 or less.
http://chorleybs.co.uk/index.php?option=com_content&task=view&id=212&Itemid=548

The problem you will have with any account is that you will need a R85 signed by a parent or guardian to get the interest paid gross.

cepheus

I can't see the point in 'investing' in a bond that's about 3% less than inflation!

If it's less than £500 you can get 5%, although even this will stuggle if inflation increases.

http://www.moneysupermarket.com/savings/productdetails.aspx?tierid=10019609&providerid=250&enquiryid=25604951&tabid=1&sk=AER&sd=Descending&prodtype=Children%e2%80%99s+Accounts&pos=NL&row=01

I suppose money is best invested in the form of education since it's difficult to blow this, although not quite what was intended. Otherwise there is always the chance someone from a 'challenging' background might just spend the windfall on fags, alcohol, lottery tickets and mobile phone tones - and thats if you are lucky!

Of course I am probably being too cynical!

Spirit_2

cepheus wrote: »

I
I suppose money is best invested in the form of education since it's difficult to blow this, although not quite what was intended. Otherwise there is always the chance someone from a 'challenging' background might just spend the windfall on fags, alcohol, lottery tickets and mobile phone tones - and thats if you are lucky!
Of course I am probably being too cynical!

Not cynical but unnecessarily spiteful.

Life chances will be fewer for these little sweetiepies - if they grow up only 'doing' mobile phone tones I will applaud them for overcoming the blight of their upbringing.

opinions4u

Spirit wrote: »

Not cynical but unnecessarily spiteful.

Life chances will be fewer for these little sweetiepies - if they grow up only 'doing' mobile phone tones I will applaud them for overcoming the blight of their upbringing.

To be fair to the previous poster, when my Dad set up modest bare trusts for my offspring, my biggest concern was along the lines of "what if they're drug users when they benefit from all this money at the age of 18?".

The answer was along the lines of it's their money to do what they want with and there's nothing we can do to stop them getting the funds.

Fortunately that scenario didn't play out. Your intentions are clearly in the best interests of these children and I hope whatever support you are able to provide on their behalf, financial or emotional, can make a genuine difference to the opportunities they get in life.

Good luck.

cloud_dog

Spirit wrote: »

The mum and dad are both drink/drug users, social services keep an eye on the children.

I have a small sum for each child which their late grandmother wanted them to have for when they are adults. Their mum and dad must not have access to it.

Any advice on what I should do that is in the best interests of the children .

Thank you

You could just put it in to an ISA account in your name (depending on amounts etc). you would just need to remember that the monies are assigned to the children.

If you are not a high ISA user you could open an account this year and deposit the money then leave the account alone. In subsequent years you could still use your ISA allowance innew accounts, and you could still transfer the ISA account 'assigned' to the children if better rates were available elsewhere.

The above is true for a normal savings account but these would be taxed at your highest tax rate.

cepheus

Life chances will be fewer for these little sweetiepies

my biggest concern was along the lines of "what if they're drug users when they benefit from all this money at the age of 18?".

This is why I think money is best used in the form of education. The money indirectly earned through that education can then be used as they please when they are mature enough to make such decisions. The education itself may broaden horizons by allowing them to mix with a different set of people with ambitions.