Moving child savings to adult S&S Isa?

tarka33

Apoloigies if this is the wrong place. I've saved about £3k for my 3 year old in a Halifax child savings account, but my husband is concerned about our son having control of the money at 18. I'd like to move it to a S&S ISA as the cash returns have been so poor, (and I'm ready to take the risk now) but can I move the funds to an adult ISA so we retain control (as I'm not using my ISA allowance) or would I have to move it to a junior S&S isa? Thanks in advance for any advice.

ratechaser

Well, you could certainly withdraw the funds and open an ISA in your own name, assuming you didn't have one already for this tax year (even then, you could potentially top it up with the money if you weren't already maxed out there). It's really then just a case of having to keep your own marker that a certain portion of that money is intended at some point to be passed on. Don't forget as well that while it's in your name, it will remain part of your estate for inheritance tax purposes.

However there's no provision for you to open an additional adult ISA on behalf of a child. That's what the junior ISA is for, and as you mention, it comes with the condition that the money is locked away and the child gets control at age 16, although nothing can be withdrawn until 18.

Is there any particular reason that your husband has this concern? Clearly it would be understandable if there was some sort of special needs situation, but my own view is that I contribute the max each year into junior ISAs for my kids and trust to being able to raise them to be responsible with money (or at least more responsible than I used to be...).

xylophone

Strictly speaking you are holding this money in trust for your son - he is the beneficial owner so that moving it into your account is taking money that belongs to him.

A better solution might be to move it into the Halifax cash JISA (4% if you hold an ISA with them ) and then make no more contributions.

You could then open a stocks and shares ISA of your own with a view to gifting money to you son at a time of your choosing.

Be aware though that this money remains in your estate and should you fall on hard times and require means tested benefits, would be taken into account as your savings.

tarka33

Thank you both.


Ratechaser - that is exactly how I feel about it, we will raise him to firstly appreciate the fact we saved anything for him, and secondly to be responsible with it. But my husband is pretty irresponsible with money and I bet he's thinking, had it been him at 18 it would've been gone!


Xylophone - thanks for that, I hadn't appreciated the part about it staying in my estate. I did consider as you say, putting this money into a S&S JISA and then future contributions into a new ISA of my own; although now you've said about being counted as my savings it doesn't sound like such a good option.


Thanks again.

xylophone

My suggestion was to move the existing savings into the Halifax Cash JISA see link

http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/

stop contributing and then to continue to save in your own name if you feel uneasy about your son's coming into a large amount of money at 18.

If you have decided against this, then you have the choice of cash JISA or stocks and shares JISA or both.

See https://www.gov.uk/junior-individual-savings-accounts/overview

cloud_dog

Tarka

We've pretty much done as previously suggested insofar as DD has:

S&S CTF (Pre-cursor of JISA) - Was contributed towards, has a decent amount in it and is no longer contributed to.

S&S ISA (In OH Name) - We contribute, and it remains our money, our choice but we know its for DD purposes.

DD Savings Acc. - In her name, which she doesn't know about. Money from birth / our own contributions. (Not worried about £100 tax rule atm). If DD gets to the age of taking possession of account and she is a bit 'wild', will probably place an amount (still in her name) in a fixed access account for a few years

DD - Savings Acc (with cash card) - She's older than yours but she puts any birthday / Xmas / Savings money in there and she uses it when she wants to.