Childrens' Savings - Over 16 Query

Maureen43

I am trustee on savings accounts for my two children.


These contain money from when they were born and other bits given to them over the years. They don't know about the accounts as I want them to have the money when they are 18.


However, it now seems that I cannot keep money for my eldest secret once they turn 16, as they have to know about accounts in their name from then.


Is there any way I can get round this?


M.

Reaper

I don't think you will have much luck finding anywhere with a later date. At 16 a child has the right to manage their own money, claim benefits, get a National Insurance number etc. They might also start working in which case they need to know about income from savings accounts in case they need to do a tax return.

cloud_dog

Prior to the child turning 16 you could place the money in to a fixed rate account. Perhaps even split the money in to more than one pot with different fixed rate periods.

xylophone

If you are holding the account as bare trustee, and the terms of the account allow this after the age of 16, then any R85 must be rescinded and any overpaid tax reclaimed on R40.
See here for example http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

Are your children eligible for CTF/JISA? You could put the money there and there is no access allowed until the child reaches the age of 18.

https://www.gov.uk/child-trust-funds/overview

In particular, if the JISA is a possibility see http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/

Or, as suggested above, you might consider going the fixed rate bond route.

Maureen43

Thanks for all the advice.


So, if I were to take out a fixed rate bond BEFORE they turn 16, they wouldn't have to know about the money until that bond matured?

Reaper

xylophone wrote: »

Are your children eligible for CTF/JISA You could put the money there and there is no access allowed until the child reaches the age of 18.

That won't help. The rules on a CTF are the same as the savings accounts described. The child has the option of administering a CTF from age 16 with withdrawals allowed from age 18.

xylophone

I want them to have the money when they are 18.

So from that point of view, CTF/JISA will be fine.

With regard to the child's knowing about the CTF/JISA, I can't really see any problem ( unless the OP is absolutely hell bent on secrecy) - the child can certainly administer it if he/she chooses but can only transfer to another CTF/JISA .

Reaper

My reading of the original question was that secrecy was the issue, but I can see it could be interpreted to mean access before 18 is the question. Perhaps the OP could clarify?

xylophone

So, if I were to take out a fixed rate bond BEFORE they turn 16, they wouldn't have to know about the money until that bond matured?

You would check with the provider. Bear in mind though that any R85 you might have registered would still have to be cancelled once the child turned 16- you would reclaim any overpaid tax as above.

Maureen43

Secrecy is the issue.


I don't want them to know they have access to funds before they turn 18!

xylophone

But if they didn't actually have the legal right to access, then it wouldn't matter if they knew or not?

If you do not live in Scotland, then assuming the account is held in bare trust then the child does not have the legal right to access or control until the age of 18.

If you have the type of account where the terms dictate that the account is transferred to the child's name at the age of 16, then change to one that doesn't. See the Virgin link.

If the child is eligible for JISA and you want to stay in cash, I would certainly look at the Halifax offering.