Saving for the Grandchildren

drumuk

I'd like to start saving a little money each month for the grand children, so that they have something for university, or house deposit etc. However I don't want just a standard account for them. The missus did this for the kids, before I was on the scene, and to be quite honest none of them have anything to show for it, when they turned 18 they all found different ways to blow it, not that I'd have been any different to be honest. lol.

So what I'd like to do is have an account that I can set a DD or SO paying into monthly, and maybe the odd "lump" if times allow. However I don't want them to be able to touch it till they are maybe 25 or 30. However if it's for something worthwhile like cost associated with education etc. I'd like to be able to authorise or transfer money out for them.

In theory this sounds like a co-signed account would do it, if such a thing exists. If it is that simple what happens if something happens to me before it matures?? Or is that a matter for my will??

Can anybody help advise on what my options are?

jimjames

For that sort of length of time I wouldn't bother with a cash savings account for them, I'd use investments. If it's in your name then you are able to choose when to give it to them.


We use Aberdeen
http://www.theaic.co.uk/wrappers/102/childrensscheme

HappyMJ

drumuk wrote: »

I'd like to start saving a little money each month for the grand children, so that they have something for university, or house deposit etc. However I don't want just a standard account for them. The missus did this for the kids, before I was on the scene, and to be quite honest none of them have anything to show for it, when they turned 18 they all found different ways to blow it, not that I'd have been any different to be honest. lol.

So what I'd like to do is have an account that I can set a DD or SO paying into monthly, and maybe the odd "lump" if times allow. However I don't want them to be able to touch it till they are maybe 25 or 30. However if it's for something worthwhile like cost associated with education etc. I'd like to be able to authorise or transfer money out for them.

In theory this sounds like a co-signed account would do it, if such a thing exists. If it is that simple what happens if something happens to me before it matures?? Or is that a matter for my will??

Can anybody help advise on what my options are?

Halifax Children's Regular Saver earns 6% interest.

The money is under your control. You can keep it when it matures. The account is held in trust for your grandchildren. You'll need their passport or birth certificate to open the account.

You can save up to £100 per month in that account. I'd save that amount even of you didn't really want to give them that much just to get the 6% interest. When the account matures you can transfer any excess back to your own account and open another one.

When you've got more than £1,200 in savings you can open other savings accounts for them which earn a reasonable rate of interest.

drumuk

If it's the account that I found online, then it matures after 12months, I was really looking for something that will run for the next 18years (for the youngest)

xylophone

Halifax Children's Regular Saver earns 6% interest.

Even if under the control of the grandparent, this is effectively a bare trust- the child is the beneficial owner of the money and has the right to access and control at the age of 18 (16 in Scotland).

The grandparent could choose to set up a discretionary trust - there are tax considerations.

He could choose to set up a designated account in an investment trust but the money remains hi, is taxed as his, and is part of his estate - he would need to make a specific bequest of the assets in his will if he is concerned about dying before he could make any gifts.

He could choose to think of his ISA as "earmarked" for his grandchildren - again, he would need to make a specific gift in his will.

drumuk

xylophone wrote: »

Even if under the control of the grandparent, this is effectively a bare trust- the child is the beneficial owner of the money and has the right to access and control at the age of 18 (16 in Scotland).

The grandparent could choose to set up a discretionary trust - there are tax considerations.

He could choose to set up a designated account in an investment trust but the money remains hi, is taxed as his, and is part of his estate - he would need to make a specific bequest of the assets in his will if he is concerned about dying before he could make any gifts.

He could choose to think of his ISA as "earmarked" for his grandchildren - again, he would need to make a specific gift in his will.

Thanks, earmarking an ISA each would be possible, but if something happens to me, is it possible that I can specify in my will it passes to the grandchild at a certain age, or under certain circumstances?

xylophone

Thanks, earmarking an ISA each would be possible, but if something happens to me, is it possible that I can specify in my will it passes to the grandchild at a certain age, or under certain circumstances?

Yes you can, but you will be creating some form of trust so discuss with a solicitor experienced in wills and trusts.

http://www.step.org/member-directory

Flobberchops

If you're a fan of Premium Bonds it's possible to buy those on behalf of a grandchild. NS&I also do a 5-year 2.5% children's bond which is a pretty good rate, and can be up to £3000. Both of those run into the problem of control eventually switching to the (grand)child, but you can deviously time to bond to mature the day before their 21st birthday, by which time they'd (hopefully) have got most of their adolescent recklessness out of their system...?

justme111

jimjames wrote: »

For that sort of length of time I wouldn't bother with a cash savings account for them, I'd use investments. If it's in your name then you are able to choose when to give it to them.


We use Aberdeen
http://www.theaic.co.uk/wrappers/102/childrensscheme

so it is basically investment, either unwrapped or in adult 's isa earmarked for a child, is not it ?

justme111

When I asked solicitors about discretionary trust it looked like the charges and tax implications would make it prohibitive.

jimjames

justme111 wrote: »

so it is basically investment, either unwrapped or in adult 's isa earmarked for a child, is not it ?

I don't really understand the question but the link I gave is for a very low cost children's investment plan where you can choose a range of investments. It's not an ISA. Some investment trusts also provide documents to create a bear trust for a child but we've not used that.