Received small lump-sum for kid...does it affect my benefits?

alicewilliams

@ BurnleyBob - I haven't talked to her yet. She's only 12yrs old and will want things like iphone and the latest stuff. However once I know what I want to do and when the time is right, I will explain everything to her.

@ KiKi - As said in post #17, I've decided against investing, full-stop. It's either put it in the highest savings account or spend money on her now.

To be honest she doesn't really need anything at the moment. Her grades are some of the best and I personally feel that giving her extra tutoring will discourage her or put her under too much stress.

I think your spot-on regarding placing the money for now in the highest interest-rate account(s) and using it when she gets older. Of course, if she says she wants to do something, such as dance classes, then I'd be more than happy to use some of that money towards those.

@ northerntwo1 - What is the length of term on those accounts? Are they paying the highest in interest rates? As mentioned before I'm not too sure if shares are worth the risk, especially when it goes everyone's advice on here.

@ Fabforty - I have now slowed down, lol!. Does she need a tutor? No. Does she need additional help with school? Not at the moment. Does she want any special experience, such as dance classes etc? Not sure, but will find out. She's only 12yrs old and my worry is if I simply let her get what she wanted, then being so young, she'll want to waste it on unnecessary gadgets or clothing which aren't really needed. I'm happy to go down the savings route, but need the best account that anyone can recommend.

Thank you

northerntwo1

alicewilliams wrote: »

@ BurnleyBob - I haven't talked to her yet. She's only 12yrs old and will want things like iphone and the latest stuff. However once I know what I want to do and when the time is right, I will explain everything to her.

@ KiKi - As said in post #17, I've decided against investing, full-stop. It's either put it in the highest savings account or spend money on her now.

To be honest she doesn't really need anything at the moment. Her grades are some of the best and I personally feel that giving her extra tutoring will discourage her or put her under too much stress.

I think your spot-on regarding placing the money for now in the highest interest-rate account(s) and using it when she gets older. Of course, if she says she wants to do something, such as dance classes, then I'd be more than happy to use some of that money towards those.

@ northerntwo1 - What is the length of term on those accounts? Are they paying the highest in interest rates? As mentioned before I'm not too sure if shares are worth the risk, especially when it goes everyone's advice on here.

@ Fabforty - I have now slowed down, lol!. Does she need a tutor? No. Does she need additional help with school? Not at the moment. Does she want any special experience, such as dance classes etc? Not sure, but will find out. She's only 12yrs old and my worry is if I simply let her get what she wanted, then being so young, she'll want to waste it on unnecessary gadgets or clothing which aren't really needed. I'm happy to go down the savings route, but need the best account that anyone can recommend.

Thank you

3% is the best instant access you will find. No tie in, add money in and take out as much as you like.

The highest is 6% in the halifax, but you need to put an amount in each month. So I would open a young saver with the value, then transfer the £100 max each month to the 6% regular saver, then the £1200 close back to young saver and repeat.

The regular saver doesn't allow withdrawals but closes after 1 year. You can put £10 to £100 per month.

alicewilliams

Thanks for clarifying that Northerntwo1. I'm amazed at how much you actually earn. Assuming I put in £100 per month for 12 months, I'm only going to make £20 for the whole year. That is low.

northerntwo1

alicewilliams wrote: »

Thanks for clarifying that Northerntwo1. I'm amazed at how much you actually earn. Assuming I put in £100 per month for 12 months, I'm only going to make £20 for the whole year. That is low.

£35 - savings are losing money. Inflation is higher than rates. So what £1200 was worth at the beginning of the year is less than what it will buy at the end of the year.

Then you get taxed on savings too.

Low credit rates are good for borrowers but bad news for savers. My youngest got £90 from £5500 in his 3%.

But as least with the Halifax young saver you can keep an eye out for better deals and move it IF they come up. Saving rates are dropping year on year. My current ISA is 4.25 % will end in October and I'm looking at 2% if lucky after that.

alicewilliams

Thank you for that explanation. I'm going to talk to my daughter and will get back to you to let you know what I decide.

northerntwo1

The NSI bonds are worth a look, but this isn't a good year for savings I'm afraid. As much as I loathe the idea if being a landlord I'm seriously considering buying to rent as nothing but housing is getting any rate of return.

Good luck and don't make any rash decisions as you are not missing out on much until you decide.

alicewilliams

Thanks northerntwo1. I will let you know whatever I decide.

Voyager2002

alicewilliams wrote: »

Thanks very much Voyager2002. I understand what your saying and I think your right. I shouldn't risk the money is share-dealing accounts. I received a Parental Discharge Indemnity Form, which releases the company from any obligations, but gives me the authority to manage the money responsibly for the child.

I have given it a lot of thought and I'm willing to go down the route of spending the money now on bettering her education now, but I don't have a clue as to which tutor to get for example for her after-school work etc. Am i allowed to spend it for example on computer equipment that she needs? Or if I wanted say a Maths or Science teacher for home, how can I find a good teacher for my area? How could I trust them to know they will do the best for my child?

As others have said, don't spend the money on things she doesn't need. She clearly doesn't need a tutor at the moment, but might do at some point in the next few years.

Another angle: you mention that the money is compensation, so is intended to put her in the same position as she would be in had the damage not taken place. You haven't said anything about what happened to her, but you might like to think about what she suffered and what could be done with the money to undo the damage. Obviously to that extent her needs are different from those of other children who have not had a compensation award. And a separate conversation: you might consider what would be needed in order to undo the damage, and whether the amount you have been offered is enough for this. If not, then do not accept the award. I have to say I am puzzled, because usually compensation is only paid for something pretty serious, and 1900 pounds would go nowhere in terms of making special arrangements for a child who had suffered material damage.

One of the highest interest rates that I know about is that offered by the Nationwide Flex Direct: five per cent, paid monthly. A condition of this is that money is paid in every month, so you could open another account and just move money between them each month.

[Deleted User]

alicewilliams wrote: »

I'm going for long-term sammy. I believe you can always put a limit on the amount shares can drop and this automatically triggers the software to sell, before you lose all shares. I plan to put this trigger in place of say 10-15%.

Also I plan to invest it across different shares to further reduce the risk and will hopefully be adding my own money to the pot. If child trust fund allowed you to invest in shares, then why is that not right?

investing this amount of money in shares is imho the worst thing to do,personally id find the best interest paying junior account deposit it and forget about it till its hers to have