Money Deposited into a Teenager's Current Account?

Elric

Hi Everyone

I've started this new thread after searching through the forum for an answer.

My situation is this:

My step-son is 13 years old and has a current account which he has full access to without my permision or his mum's. Me and my partner receive Incapacity Benefit and are concerned about money he is about to inherit - £10,000 - from a previous step-father - will this affect the benefits I'm claiming (Namely, Incapacity Benefit, Child Tax Credit, Housing Benefit, Council Tax Benefit)?

The money won't be in his account for long, £3,500 will be invested into Premium Bonds and the rest will be spent.

Advice about this would be appreciated,

Regards, Elric

Sausage_Roll

I don't think it should, your child's wealth shouldn't count when calculating benefits. I can't say for sure though, i'm no expert.

As for your 'investment' with £3,500, have a read here: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1161700153,9594,

Robert_Sterling

I think it is unusual for a child aged 13 to have a current account.
This is because a child under 18 cannot enter into an enforceable contract.
Usually they would need a guarantor for the account.
Also unless the current account has been well chosen it will not pay a market leading interest rate and so the money would get more interest elsewhere.

Elric

Thanks.

Can anyone answer my original question:

My step-son is 13 years old and has a current account which he has full access to without my permision or his mum's. Me and my partner receive Incapacity Benefit and are concerned about money he is about to inherit - £10,000 - from a previous step-father - will this affect the benefits I'm claiming (Namely, Incapacity Benefit, Child Tax Credit, Housing Benefit, Council Tax Benefit)?

The money won't be in his account for long, £3,500 will be invested into Premium Bonds and the rest will be spent.

Regards, andy

morg_monster

Hiya
I couldn't find a specific answer to your question but I did find this list of changes which you need to inform HMRC about with regards to Tax Credits:

http://www.direct.gov.uk/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/TaxCredits/TaxCreditsArticles/fs/en?CONTENT_ID=4015487&chk=L1JhtV

It doesn't say anything about wealth of an under-16 year old. Also, it says that with regards to income you don't need to declare a rise in income if the rise is less than £25,000. So I would say even if this money was included, you still don't need to declare it. But it isn't income anyway...

For a 100% answer I would say to ask at a Jobcentre. But I think it is highly unlikely that it will affect any of your benefits, I would just proceed as you plan to.

morg_monster

THought I would just add this link too.
http://www.direct.gov.uk/MoneyTaxAndBenefits/ManagingMoney/PlanningYourPersonalFinances/PlanningYourPersonalFinancesArticles/fs/en?CONTENT_ID=10014128&chk=ljIk%2B8

Possibly not so relevant if you are spending most quickly and investing the rest in Premium Bonds or another tax-free vehicle, but worth reading about the tax on savings' interest for children. Has his ex-step-father passed away? If so, I assume all the tax implications have been dealt with by the executor of his will?

If he is still living then I wonder where he enters into this paragraph:
"The £100 limit only applies to parents and step-parents. Grandparents and other adults who give money to children are not liable to pay the tax if the interest exceeds £100 a year."
I guess since he is no longer married to the boy's mother, then he qualifies as an "other adult" rather than a "step-parent".

Anyway that is by-the-by. I'm sure everything has been thought of already!

Jake'sGran

Robert_Sterling wrote:

I think it is unusual for a child aged 13 to have a current account.
This is because a child under 18 cannot enter into an enforceable contract.
Usually they would need a guarantor for the account.
Also unless the current account has been well chosen it will not pay a market leading interest rate and so the money would get more interest elsewhere.

I don't understand this either. Both my grandsons have bank accounts which I pay into each month. After a certain length of time they were allowed a cash card but can only withdraw £20 maximum. They are aged 15 and 13.All other monies being invested for them is held in mine or their parents name.

Elric

Thank you everyone.

By the way - wasn't thinking straight - it's a savings account, in case anyones still scratching their heads!!

Cheers Morg!! Links came in useful, at least I don't have to bury it in a chest!

Thanks again, ANdy

regularsaver1

get him to save the £10k for the future.

why is he spending £6500?