savings for grandchildren

Hutch100uk

My Mum went into the Halifax to enquire about opening new savings accounts for her 2 grandchildren. They have a regular saver at 6%. She was told that grand[parents can NOT open accounts for grandchildren anymore...... I've researched this on the net and can only find this rule for ISA's. Can someone clarify this please as I think she has been given incorrect information.

talexuser

It is true that parents can only open Junior isas. The disadvantage is a) the money is theirs at 18 to waste if they want to, and b) you can't get at it before 18 say for a school trip or some other useful purpose. However once opened there is nothing stopping a grandparent putting money in.

I don't see why a grandparent can't open a joint account with a grandchild as long as you can find one where the T&Cs allow it i.e. no minimum age 16 clause.

Unfortunately many savings accounts are likely to lose money compared to inflation unless you can consistently keep up the relative difference of these best buy 6% type accounts.

With a 10 year plus timescale I would look at investment trusts or funds where you are likely to beat savings comfortably, but you would need to understand the risks etc etc, this perhaps with a view of eventual first car or flat deposit. And perhaps also have a small savings account for smaller value one-offs, say a laptop, bike etc.

opinions4u

For reasons known only to Lloyds Banking Group, who own Halifax, only parents can operate child accounts opened since September 2011.

It's a systems thing, not a legal thing.

(See post below -what I've typed above is inaccurate)

Hutch100uk

opinions4u wrote: »

For reasons known only to Lloyds Banking Group, who own Halifax, only parents can operate child accounts opened since September 2011.

It's a systems thing, not a legal thing.

Is this for ALL types of account? Their other grandmother has an appointment with another Halifax branch to open a 6% regular saver for our new son. Surely she can't do that then?

opinions4u

Hutch100uk wrote: »

Is this for ALL types of account? Their other grandmother has an appointment with another Halifax branch to open a 6% regular saver for our new son. Surely she can't do that then?

I might be out of date now, so my apologies.

Their web site only makes reference to "The person opening the account must be over 18" whereas it used to be parent only.

Indeed, page 15 of the T&Cs makes reference to grandparent opening. So I was wrong.

http://www.halifax.co.uk/savings/pdf/savings-account-conditions.pdf

One account per child only though. So if a parent or other adult has already opened one on the child's behalf it's a no go.

CLAPTON

I don't know the rules but a child is potentially a tax payer like everyone else.
In principle they could have sufficient income to pay tax; the parents would be legally responsible for the children's tax affairs which might be difficult if other opened and controlled taxable a/cs on the children behalf.
With junior ISAs the situation is clear cut; the rules don't allow other than the legal guardians from opening and operating a junior ISA

Hutch100uk

opinions4u wrote: »

I might be out of date now, so my apologies.

Their web site only makes reference to "The person opening the account must be over 18" whereas it used to be parent only.

Indeed, page 15 of the T&Cs makes reference to grandparent opening. So I was wrong.

http://www.halifax.co.uk/savings/pdf/savings-account-conditions.pdf

One account per child only though. So if a parent or other adult has already opened one on the child's behalf it's a no go.

Thanks so much for this. I did go on the website and saw this but missed the small print about 1 account per child.
I've already opened the same one for both my children!!!