Best account for 16 year old

Jules_c_3

First post on here, I found this site by googling and have been facinated by all the resources you have on here.

I am just finalising my divorce and rather than give money to me, my ex is going to give my 16 year old duaghter a regular sum (about £150 a month) to cover her pocket money, school dinners etc. So she needs a bank account. I understand that many banks do accounts for 16 year olds that only give them an autobank card but some they can also use in shops etc.

Has anyone got a recommendation for the best sort of account and from which bank would suit her?

She has £2k in a building society account which I operate for her and now she is 16 they have written to say she must pay tax, so I need to move this into an account in her name but one that is not easy to take it out of (at least till she goes to uni) again any recommendations for that ? I was thinking of an ISA?

Any thoughts

Thanks

Jules

techno_geek

Firstly, welcome to MSE!

The Lloyds TSB Under-19s account comes highly recommended on the Budgeting & Current Accounts forum, as it comes with a proper debit card and a cheque book, and pays a good rate of interest. Their online banking service is also very good I hear.

It depends on how close you are to a branch, as the account can only be opened in-branch.

Obviously other banks offer accounts oriented at kids & teenagers, but use them as a last resort!

Jules_c wrote:

She has £2k in a building society account which I operate for her and now she is 16 they have written to say she must pay tax, so I need to move this into an account in her name but one that is not easy to take it out of (at least till she goes to uni) again any recommendations for that ? I was thinking of an ISA?

This is not the case - as long as she's not working or earning above the taxable threshold, she won't have to pay a penny in tax. Just ask the building society for a R85 form.

Also, which building society is it and how much interest is being paid on that money? An ISA, such as the NS&I one mentioned in the ISAs article, might pay a lot more interest... and it will remain tax-free even if she starts earning money.

techno_geek

Oh, just had another thought...

In addition to the Lloyds account, your daughter should open a Nationwide FlexAccount. It only comes with a cash card, as she's only 16, but she will be able to open an e-Savings account to go with it.

The Nationwide e-Savings account pays considerably more interest than most other savings accounts available from high-street banks or building societies, and the idea is that she transfers a set amount each month from her Lloyds account to the FlexAccount. She can then transfer the money to the e-Savings account. Hopefully this will teach her to save as a habit, and will serve her well for later in life!

Plus, the FlexAccount is great if she goes on holiday because it gives fee-free cash withdrawals abroad!

Kilty_2

techno_geek wrote: »

This is not the case - as long as she's not working or earning above the taxable threshold, she won't have to pay a penny in tax. Just ask the building society for a R85 form.

Isn't it true that if the money comes from a parent and it earns more than £100 a year in interest, it's your parents' earnings that are takern into account thus tax would need to be paid on it?

I have £3000 with Nationwide that was given to my by my parents and the impression I got from the R85 form is that I'd not be eligible for gross interest on it.....

I'd put the £2000 into an NS&I Direct ISA anyway, you won't need to worry about tax then

As for an account, I agree with the combination suggested, LTSB Under 19's account (but you'll need to put up with the useless staff) and Nationwide FlexAccount is a winning combination