Savings for children

mwilde

Hello

I am after some advice please. I have 2 premium bonds accounts for my children. They both have around 6k (so 12K total). One of them is 12 and one is 8. Between the 2 accounts we had £125 of winnings in the last 12 month period.

I am thinking of moving the money.

There are so many options I am confused. I do not need access to the money for at least 5 years. The money has to be safe. I might want to add extra money to it now and again - but not a lot - max £50 a month at the moment.

Should I combine the money, or should I keep it split. The money is my money to use for them as I see fit. I dont want them to be able to draw it out at 16 and blow it.

thank you

xylophone

https://www.nsandi.com/files/published_files/asset/pdf/premium-bonds-brochure.pdf

You are holding these bonds for your children. They belong to them and not to you.

It follows therefore that if you surrender the bonds, the money is theirs and should be placed in accounts in their individual names - this could be with you as bare trustee but they will have the right to interest and capital at age 18 at the latest.

There is nothing to prevent your regarding an account in your own sole name as money set aside for your children - you can then gift this at a time you see fit.

HappyMJ

mwilde wrote: »

Hello

I am after some advice please. I have 2 premium bonds accounts for my children. They both have around 6k (so 12K total). One of them is 12 and one is 8. Between the 2 accounts we had £125 of winnings in the last 12 month period.

I am thinking of moving the money.

There are so many options I am confused. I do not need access to the money for at least 5 years. The money has to be safe. I might want to add extra money to it now and again - but not a lot - max £50 a month at the moment.

Should I combine the money, or should I keep it split. The money is my money to use for them as I see fit. I dont want them to be able to draw it out at 16 and blow it.

thank you

You would probably be best taking the money back into your own possession and putting into a high interest current accounts and regular savings accounts and earn up to 6% interest.

From April you can earn up to £1,000 a year free of any tax.

xylophone

You would probably be best taking the money back into your own possession

The bonds belong to the children. The OP would be taking what does not belong to her.

xylophone

The children will almost certainly each have a CTF - the OP could redeem the bonds, pay the maximum into the CTFs, transfer the CTFs to JISAs and pay in the balance.

These funds would become available to the children at 18.

For the future, the parent might prefer to make no contributions to these accounts but simply to save in his/her own name so that he/ she can do whatever required with the funds, whether gifting or keeping.

HappyMJ

xylophone wrote: »

The bonds belong to the children. The OP would be taking what does not belong to her.

The OP says "The money is my money to use for them as I see fit."

As you say to make sure it's not going to considered the children's money I would as the OP states spend it on the children.

It'll take just over one year to spend £6,000 housing, clothing and feeding each child and then there will be nothing left.

The £6,000 per child figure is equivalent to what a family would get in child benefits (£20.70/week plus £13.70/week), child tax credits (£2,780/year per child plus £545/year) and additional housing allowances (my area the difference in LHA rates between a 1 bed and a 3 bedroom property is £42/week). It's actually £10,077.80 per year for 2 children.

The OP's earned income can then be saved into a new savings account to replace the money.