Where to put compensation money! 22 March 2014 at 8:01PM in MoneySaving mums 5 replies 2.4K views

reg2177

Hi,
My 15 year old son is due to receive £5000 in compensation following an accident that he was involved in. The court has said they will only pay the money into an account that he cannot access until he is 18. f one isn't set up then they will keep the compensation until he is 18, which means he will not be earning any interest on the money. The money he is due to receive is too much for an ISA and ideally I would prefer to open an account that lets me top up as and when, rather than on a fixed monthly basis.
Went to my bank this morning and was told I could open a trust fund but that I had to do that online - couldn't find any option to open such a fund on my banks website. Have now spent most of the afternoon online trying to find something suitable but am gong round in circles! Can anyone out there help.
Thanks
Rachael

butterflymum

Have they specifically said that if kept by them there would be no interest? See:

http://www.justice.gov.uk/protecting-the-vulnerable/cfo/childrens-accounts

reg2177

Hi butterfly. Yes there is some interest .... 0.5% obviously would much rather have it put somewhere where interest rate is better than this. My sons Money would go into the special account mentioned on the web page you posted which only accrues the0.5%

ema_o

Personally I would find the best account for locking up this amount of money for 2 or 3 years and put it into that.

If you want an account you can top up (and this doesn't work) set up a separate account for him?

In terms of ISA - could they pay it in 2 separate payments - the max for an ISA before this year ends, then the rest after that date?

anotheruser

£5000 isn't too much for an ISA account.

Pay it in there, then open a new account for you to "top up", then pool it all together when the first ISA comes to an end, especially now you can have up to £15,000 in an ISA after July.

rev229

My son has some compensation from a accident, he received it about 4yrs ago aged 14. However the court has maintained the account, we only get annual statements telling us how much is in the account. We/he has never had any access to the account and won't until his 18th birthday. We could have applied to have some of the money for 'educational expenses' but never had. The money is untouchable at present, we were told that we could not put it anywhere ie it stays in the court account!