Want advice re isas and savings for a member of the family

smudgie48

My daughter is 24 years old, and, is experiencing monetary diffculties so much so that she is just about keeping here head above water, but, dosn't manage her money very well.

My husband and I want to give her some money, but, think it will go quickly and be frittered away. We want to ensure that the money is locked for a time and that she can't get her hands on it. Can we put it into an ISA and not let her know ??? or is there something else we can do that will lock the money for a time ????

Any advice would be very welcome.
Thank you

kidmugsy

You could put it into an ISA in the name of one or other of you, having agreed that you'll both mentally write it off as being intended for your daughter, but not made available to her yet. (It could be, for example, a fixed term ISA so that there are penalties for closing it early.) You'd have the advantage that if she really gets in the soup her creditors would have no claim to the money because it's still yours.

Or, I suppose, one of you could open a joint account with her, arranged so that money could be removed only with both signatures. But that sounds like a recipe for family strife.

xylophone

It would be possible to set up a discretionary trust but this would require expert advice.

Other than that,you might offer to take over paying her rent/mortgage/council tax/electricity bill (paying through your own bank account so that you have control), or might buy her groceries etc once a week/month?

atush

You could help her with expensive debt (ie pay it off and have her repay you w/o interest)?

You could sit her down and teach her about finances?

You could send her to our Debt Free board? Teach her about Snowballing (ie min pay all debt apart from the most expensive one which you slam and pay off- rinse and repeat).

I would NOT give her money outright, and sticking money in a cash ISA at less than 2% when she has debt at 20% isn't going to help her much?

dzug1

Most investments can be cashed in by anyone foolish enough or determined enough who is willing to ignore the consequences. (cf the abundance of people on here wanting to 'release' their pension.) Your daughter might decide that 10% of 'her' investment with the rest being lost is what she 'needs' right now.

A trust is the only real answer - but it doesn't come free

theoretica

May I ask why you want to give her money now but not permit her to spend it? Is it for your tax reasons? I can't really see any other reason for handing it over before you want it spent.

There are fixed term accounts with no withdrawals permitted - Cheshire Building Society has some which would let it be locked away for up to 4 years.

BobQ

smudgie48 wrote: »

My daughter is 24 years old, and, is experiencing monetary diffculties so much so that she is just about keeping here head above water, but, dosn't manage her money very well.

My husband and I want to give her some money, but, think it will go quickly and be frittered away. We want to ensure that the money is locked for a time and that she can't get her hands on it. Can we put it into an ISA and not let her know ??? or is there something else we can do that will lock the money for a time ????

Any advice would be very welcome.
Thank you

Are we talking about debts or simply not managing on her income. If its debts, I agree, she needs some advice on how to manage them and how to pay down those that cost more. The Debt Free Board is a good place for ideas including about living within your means, but it does need her cooperation. For example, she may have debts on expensive credit cards that are better moved to other cards or paid off with bank loans. Consider also that you may not know all the debts she has so giving her money is possibly not the solution. Even if its used to pay off debts there is no guarantee she will not see the opportunity to acquire more. As with drug addicts, giving them more drugs is not helping them. If she just fritters money away as she gets it she still needs advice on saving and not spending.

Putting the money in an account in her name makes no sense. Also you cannot do this without her agreement. If you lock it away it is not helping her and it may end up with her creditors eventually.

You could save it yourself as has been suggested and ensure she gets it in your will if its a long term aim to save money for her. Depending how much we are speaking about. you could pay it into a pension for her.

bigfreddiel

smudgie48 wrote: »

My husband and I want to give her some money, but, think it will go quickly and be frittered away. We want to ensure that the money is locked for a time and that she can't get her hands on it.

start a pension for her - she can't touch the money till she's 55 - is that locked away long enough for you


cheers

fj

MoneySaverLog

kidmugsy wrote: »

Or, I suppose, one of you could open a joint account with her, arranged so that money could be removed only with both signatures. But that sounds like a recipe for family strife.

Advise against that as it will affect both credit files if she ends up in real trouble financially with her creditors