Saving sisters money in my offset.

Mojisola

Linton wrote: »

What happens if you die? Her money would be part of your estate.

Not if they have a loan agreement. It would be a debt on the estate which would be repaid.

(xylophone beat me to it.)

ColdIron

racing_blue wrote: »

I'd advise my sister to open an ISA.

Do you know whether the OPs sister pays tax and could benefit from one?

Also your sister may be different from the OPs who's 'just not interested in setting up new accounts'

racing_blue

ColdIron wrote: »

Do you know whether the OPs sister pays tax

No

ColdIron wrote: »

and could benefit from [an ISA]?

Yes she could benefit from an ISA, as she has £15k to deposit on which she would be paid interest.

ColdIron wrote: »

Also your sister may be different from the OPs

Agreed, unless there are a photos missing in the family album

ColdIron wrote: »

who's 'just not interested in setting up new accounts'

I wonder, does she know about the guarantees which are in place when you deposit money in a proper account, and how these are not in place when you make a private loan to a friend or relative?

ViolaLass

racing_blue wrote: »

Yes she could benefit from an ISA, as she has £15k to deposit on which she would be paid interest.

But could easily earn more outside of an ISA, even after deduction of tax. And if she doesn't tax then the ISA would provide NO benefit.

Archi_Bald

racing_blue wrote: »

Yes she could benefit from an ISA, as she has £15k to deposit on which she would be paid interest.

Nobody contests that she would get a small amount of interest in a cash ISA. But everybody (?) knows that cash ISAs these days pay some of the very worst interest rates available in the current market.

Without further information about her circumstances it is not really possible to conclusively say what would be the best option for the sister. It is most unlikely though that a cash ISA would really be the best option.

alanq

Other possible unintended consequences include:
* the potential impact on any means tested benefits you may become entitled to
* your sister could be accused of deprivation of assets if she applies for a benefit
* if you divorce or become bankrupt the funds could be taken into account as part of your assets

mgdavid

robatwork wrote: »

There's a lot of judgement going on in this thread....
.......Nothing disgusting, please ignore the trolls.

Apparently you didn't read the OP, which asked "I'm just wondering if you good people of moneysavingexpert had any thoughts?"
We do, and we provided them.

racing_blue

While this is a clear WIN for the OP to the tune of >£200 per year, it is not quite such a clear WIN for his sister who could get more than 2% elsewhere, with better guaranteed security.

Steven Covey (in his book 7 habits) says the best basis for relationships is WIN:WIN or no deal & I have found this to be good advice.

I can see where the OP is coming from, and if family money was pooled then this would be family WIN, mortgage company LOSE

jackyann

Assuming there are good reasons (NOT benefit fraud) for the sister not wanting access to her money (and I can think of several) then I agree that a letter, stating it is a loan is the best way forward. Lodge it with your will, and ensure that executors are aware.

Eco_Miser

notanewuser wrote: »

Legally it becomes your money when it's put into your name. If you spend it all she has no comeback.

Is that true? It's a loan (OP suggested 2% interest, others suggested 3% or full amount saved on mortgage), not a gift.