Help grandchildren and £12k savings

amj236

Hi There
I have 2 grandchildren who are about to receive a £12k lump sum in death service payout from their late fathers pension provider.
Where can I put this amount bearing in mind they also receive a yearly pension from him of approx £2k, I have been advised that I cannot put more that £4k a year into any account for a child aged 10?

jimjames

Sounds like Chinese whispers this Info about what you can pay into an account as there's no such rule.

Junior ISAs have a limit of £4000 per year but you can use any other account. Depending on ages it kay be better in equities than cash.

xylophone

Do the children have CTFs? (Transferable to the more flexible JISA in due course)

https://www.gov.uk/government/news/government-to-allow-child-trust-funds-to-transfer-to-junior-isas

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

Subscription limit up to £4080 from 6 April.

http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits might also be of interest.

amj236

Thanks for the reply both

So what you are saying is that only Junior ISA's and CTF have limits but any amount can be paid into any other Childs savings account?
If I need in to go into a trust until aged 18 this would be something a solicitor would set up?

xylophone

Banks and building societies may set limits on what can be paid into any account, not only those specifically set up for children.

They may set a limit not on how much may be paid into an account, but on how much will attract interest.

In any event, the child need not be confined to just one account? You might use Santander, BOS, Virgin etc etc.

Under the circumstances you describe, (is it £6000 each or £12000 each?) I should have thought your first port of call would be to use the CTF/JISA for the current CTF year and subsequent tax years.

I should have thought that a transfer to the more flexible JISA would be a good idea as soon as practicable although I understand from a report in today's Mail that the Nationwide BS will (from April), pay the same on a CTF as on a JISA ( there's a wide gulf at the moment).

Make sure that the best possible interest rate is being obtained.

You can hold an account in bare trust for a child without the need for setting up a formal trust - a simple declaration should be enough or recording yourself on the account as Mrs A B Trustee for Mary Jane X.

Be aware that if a R85 is recorded on the account, it must be rescinded when the child turns 16 and any interest overpaid reclaimed on the child's behalf until he is 18.

See here http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/ under "Things you might like to know".