saving for education

cindyloohoo

Hi there, We've been asked by relatives to set up an account for our children so they can put in a lump sum to help fund an uni degree in the future (they are 12 and 10 at the moment). They would like us to have some control of the money so the kids cannot access it all when they get to 18 and blow it all on having a great time in the first year. Does anyone know if there is an account for children which can be run by parents that doesn't automatically become theirs when they turn 18. I've been looking but haven't found any yet.
I'm pretty sure they'd be fine with us putting the money in our names and transferring it each year but the rates aren't great and would that impact on our financial situation? We are saving into pensions and ISA's for our old age so the money really would be separate to any we save.
Thanks for any advice

jimjames

Cash accounts might not be best option especially for younger child so investment might be better.

What ISAs are you already using, I assume s&s ISAs if long term? Can you use the same company but with different account? Or investment trust savings plans are popular option for long term children savings.

McKneff

And once the child is 18, the money is legally theirs. You cannot keep this from them. They are adults, even if they act like 12 year olds.

xylophone

If the money goes into your name then it becomes your money.

You can hold it in bare trust for each child but they have a legal right to access and control at the age of 18 (16 in Scotland).

Is the sum of money substantial enough to consider a discretionary trust?

http://www.hmrc.gov.uk/trusts/types/discretionary-accum.htm

Take professional advice if going this route.