My son has just been left £9,000.

stackhouse

Hi, advice needed please. I have just been informed that my 11yr old son has been left £9000 inheritance - by relatives we didn't know about (he's adopted). :j I've said he can spend a little of it but the rest is to go away for when he is older.

Where shall I put his money? I've had premium bonds suggested, high interest account, ISA. Currently I have a saving plan for him, to which is paid £25 a month which matures when he is 16/18.

Help! Thank you.

gt94sss2

stackhouse wrote:

Where shall I put his money? I've had premium bonds suggested, high interest account, ISA. Currently I have a saving plan for him, to which is paid £25 a month which matures when he is 16/18.

Assuming you want the money to remain in his name - under 16's are not allowed to have ISAs.

Before advising on any other options some more information would be useful.

For instance

1. Do you/your son want/need the money 'easily assessible'?
2. Would you/your son want the money for any particular purpose (or at a particular age) - i.e. 18/21 for university fees or to buy a car etc?
3. What is your attitude to risk? Would you be happy investing in shares (where prices can go down as well as up!) or would you want a more conventional "safe" savings account of some type.

Knowing these things would help in suggesting options for you to consider.

Regards
Sunil

heppy23

I'd look into putting a large chunk of it into the existing savings plan.

I would even think about putting £1-2k in a stakeholder pension for him then he can get a good headstart on pension planning, something everyone needs to do these days.

stackhouse

Sunil,
thanks for your response. I don't want it too accessible as I might spend it! I'm looking for it to be there for either university or for a car.

My attitiude to risk is - well, I once had a high risk isa where I lost most of my money, so I don't really want to take that risk with his money. Moderate I suppose.

cheers Jo

stackhouse

Yes, I thought about putting some of it into his saving plan. I also like the idea of some premium bonds as well. I know there is no interst on them but he may win and he can sell them back.
Didn't think about stakeholder pensions - not a subject i know about but I'm sure I can look them up.

Tils

I belive I've read here before that the % back from premium bonds isnt much difference compared to simply saving it if at all.

Also remember your son wont pay tax so normal savings accounts will be worth a lot more to him than you.

Might want to do a search around this section on bonds if you really want to go that way and see what the experts say about them.

Heinz

Premium Bonds are nominally attributed a 3.15% interest rate.

http://www.nsandi.com/interest-rates/index.jsp

black-saturn

I have no advice but I just wanted to say congratulations. If he invests it wisely he should have a nice little nest egg when he's an adult.

F_T_Buyer

Don't go with premium bonds, they are not worth it unless you are a higher rate tax payer or very very lucky.

As he won't pay tax (assuming it's in his name), just wack it in the highest paying savings account. Go for fixed rates to get higher deals.

You can get excellent rates if you're prepared to fix, you can get 5.93% AER for a 12 month fix: https://www.rufflerbank.co.uk

I don't know much about ruffler bank (fairly new to me), apart from they are backed by the the FSA, so if they go bust you will be protected. I personally wouldn't put more than £30k with them.

~

On a different note, why don't you only give him the interest on the money. I never had pocket money, just a lump sum and I got monthly interest on it. Great for when I was a kid, and it opened my eyes to interest rates and budgeting (as my income varied). Also encouraged me to save, and my investment, hence income grew every month...

Does anyone do this with their kids? (I don't have kids btw).

The interest would be £533.7 per year, so still over £40 per month. Not sure what the average pocket money is today, but I expect £40 is alot!

Bossyboots

I would have expected the funds to be placed in trust until he reaches 18 and sums only released by the trustees for expenses not normally payable by the parents.

Have you checked he is actually going to get a payout or has inherited the money and will gain control of it later on?

stackhouse

I've just been told that the money is in an account ready to be passed over to him. There has been no mention of it held in trust for him - although I suppose that may be a possibility.

thank you for the responses so far - I can see i have a lot of reading to do!