Saving sisters money in my offset.

Savingdad

If your sister understands the risks then its fine, my sister in law stashes any extra she has at the end of the month in my premium bonds account, she knows there is little chance if anything coming back from them but she also kjniws it will be there for her as and when she needs it, its not only since she started doing this she has managed to save anything as she tends to spend all her wages if its left in her account long enough.
We decided on bonds because each batch bought has there own numbers so as and when I win I can check if its her money or my money that has won, the deal is half for her, a quarter for me and a quarter for my son when her bonds win.

notanewuser

Eco_Miser wrote: »

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

No, she said she would "perhaps" offer her 2% on it.

In my case the money was parked in my offset account with the person fully knowing that if anything happened to me it would be considered mine legally. Similarly I had agreed that if they requested it back I would have to return it. But there was still more of a risk for the other person.

While I offered interest (best they could get was 3% and my mortgage was almost 6%) this was refused.

Archi_Bald

savingdad wrote: »

If your sister understands the risks then its fine, my sister in law stashes any extra she has at the end of the month in my premium bonds account, she knows there is little chance if anything coming back from them but she also kjniws it will be there for her as and when she needs it, its not only since she started doing this she has managed to save anything as she tends to spend all her wages if its left in her account long enough.
We decided on bonds because each batch bought has there own numbers so as and when I win I can check if its her money or my money that has won, the deal is half for her, a quarter for me and a quarter for my son when her bonds win.

That seems a bit of a raw deal for your sister in law if she ever wins anything. The average annual return of 1.3% is bad enough without giving half of it to somebody else.

Why doesn't she have her own PB account if she wants to put money into PBs?

lr1277

Mojisola wrote: »

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

So it would be best to write a will, explaining that £15k would go to you sister. There is a cost to writing the will.


I am not sure if or how you would factor that into the calculation of how much interest your sister gets.


As you are both beneficiaries of an inheritance, you should both think about writing will as you now have assets to give away. Just in case the proverbial bus comes along.

dinosaur7

I am not sure about the advice to the OP saying that her sister's money would become hers in the eyes of the law if put into her account. It may well affect things like benefit payments etc., which could be an important consideration for the OP, but I'm pretty sure that the OP would not suddenly 'own' the money!


My understanding is that if someone gives money to someone else to 'look after' for them, this would create a simple trust. The person whose account was being used would become a trustee with a fiduciary duty towards the other, who would be the beneficiary.

Obviously it would be wisest to put this in writing so that there is evidence of the agreement in case of future wrangles, but I think it is very misleading to suggest that the sister parting with £15K would simply lose all rights to the money!

Mistermeaner

Don't think any selfish intent on part of op, she's just trying to help her sister.

On that note as you can see looking after someone else's money is fraught with complication, the best help op could give her sister is a kick up the ads to grow up and take of her own finances - be that an isa or a santander or whatever IN HER OWN NAME

Mojisola

lr1277 wrote: »

So it would be best to write a will, explaining that £15k would go to you sister. There is a cost to writing the will.

I am not sure if or how you would factor that into the calculation of how much interest your sister gets.

As you are both beneficiaries of an inheritance, you should both think about writing will as you now have assets to give away. Just in case the proverbial bus comes along.

As long as there is paperwork showing the debt, it would be repaid whether there was a will or not but it's always best to have a will.

Savingdad

Archi_Bald wrote: »

That seems a bit of a raw deal for your sister in law if she ever wins anything. The average annual return of 1.3% is bad enough without giving half of it to somebody else.

Why doesn't she have her own PB account if she wants to put money into PBs?

It may seem a raw deal but believe it or not there are people out there who struggle to save or manage their money, in the 15 years she has been earning she managed to save £0, in the 2 years I have been collecting her left over money at the end of the month she has saved just short of £2000, if she had her own pb account she could get the money repaid to herself and blow it on nails and hair extentions.
Now she can pay for her travel ticket monthly instead of weekly and in the new year she can get an annual pass saving more, she is slowly learning the benefits of saving but she hadn't had her LBM yet so I look after her extra and she can explain to me why she needs it and I can point out the problems to her if their are any.
Its her money and she can have it when she wants but often she changes her mind when she actually voices what she had intended to spend it on.

olbas_oil

notanewuser wrote: »

Legally it becomes your money when it's put into your name. If you spend it all she has no comeback. Your sister needs to be aware of that. (I have done the same with someone else's money without any problems.)

Incorrect.

notanewuser

olbas_oil wrote: »

Incorrect.

Evidence please.