Savings accounts for Grandchildren

maidincornwall

Hello, we have 2 baby grandsons who we would like to save some money for, for their futures, the only problem being that neither set of parents is good with money and I know that one would certainly take out any money put in so we dont want them to have access to it, also one set we are not often in touch with due to family problems so we probably wont be able to get birth certificate etc to set the account up for him, Im sure if I asked I would be told to **** off even though most people would be thrilled for grandparents to try to help their children like this!

Is there any way bar from setting an account up in my name at my current bank and using that, that I can do this for the children? I have accounts with 2 different banks myself and a Post office ISA.

Any advice would be welcome, I am unfortunaltey not talking of investing £1000's probably £50 to start with then £5 per month plus xmas and birthday and other 'bonus's' but this will all add up over 18 years!

Thanks MIC

atush

the easiest way is a Bare Trust where you are the acct holder but each acct has a child 'designee'. I have 3 investment trust savings plans for my 3 boys this way. Only I can buy and sell units/shares even though they are now 17-20. I will be turing it over at age 21.

I imagine you may be able to do this with savings accts, so ask your bank. IMHO, if you are saving for 17 or more years, then investments will do better than savings and you can do so from as little as 20 quid per month into investment trust savings plans (although more have 25-50 minimums.

If you decide to save in your own name only, then you will pay tax on any income and you will need to write your will to specifically leave the amts in the 2 accts to the children in question. Should you die before they are 18, I would specify another adult you trust to be a trustee to keep the money out of the parents hands?

maidincornwall

Thanks I will look into that, Its such a shame we have to do it in such a covert way.

xylophone

http://www.direct.gov.uk/en/MoneyTax...e-interest.htm
http://www.moneysavingexpert.com/sav...vings-tax-free
http://www.moneysavingexpert.com/sav...linked-savings
http://www.uknetguide.co.uk/Finance/...en-105706.html
These are worth reading for information.

The problem doesn't lie with getting a copy of the birth certificate
http://www.direct.gov.uk/en/Governmentcitizensandrights/Registeringlifeevents/Birthmarriageanddeathcertificates/dg_175628
but (since you would want to register a child for tax-free interest) getting the parent to sign the R85 for the child - there is also the question of what happens when the child reaches 16 - see links.

What you might consider doing is thinking of one of your ISAs as being "earmarked' for your grandchildren and then making gifts from that when they are over 18 - if IHT is a consideration, see http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/InheritanceTaxEstatesAndTrusts/index.htm

You could arrange for the money in this account to be left to the children in the event of your death before they reach their majority but you would need to name a trustee (not the parents presumably).

maidincornwall

It was easy with my own kids, my mother put money into an account, I could get it out before they were 16 but of course didnt, and they then although they can get it at 16 they will all obey their late grandmothers wish of leaving it till they are at least 18, however my stepchildren arent this careful, sensible or amenable and this does madden me somewhat!

steviep43

I'm in a similar situation, except my sister and her husband have specifically asked me to hold and look after the account as I'm good with money. Can I open an account in my name and get my sister to fill out the R85 form with my niece's details on, or does the account need to be in my sister's or my nieces name? Ta

atush

yes you can open and get her to fill out R85. you can have it in yr name with her as designee (bare trust) or her name as you like.

There are also Junior Isas to consider