Delaying access to savings for 16 year old

lemur32

We have been saving regularly for our son since he was born, and there is now over £30k in Lloyds and Halifax children's accounts, to which only we (parents) have access. He turns 16 next month and if we do nothing the accounts would change to his name only, but we don't feel he is mature enough yet to use the money wisely. I would be grateful for any suggestions as to how we can keep the money 'safe' until he has a genuine need for it (university, car etc).

xylophone

You could open a JISA for him but that will only take £4080 this tax year.

The balance could be moved to an account which you can hold in bare trust for him until he is 18 (when he becomes absolutely entitled to access and control)- you could move the maximum from this account into the JISA in 17-18 and 18-19 tax years.

Example http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

Incidentally,if interest arises on a child's account ( outside tax privileged accounts like JISA) where the capital has been provided by a parent, the "£100 rule" (per parent) still applies as in previous year).

https://www.gov.uk/savings-for-children

http://moneyfacts.co.uk/guides/savings/savings-accounts-for-children050412/

realaledrinker

My daughter turns 18 next week and I have always managed 'her' accounts on line and/or kept the pass books in a 'safe' place, so the question has never arisen.

duchy

Does he know the account exists ?

lemur32

No. don't think he is aware of them.

unimaginative_user_name

Transfer the sum to a fixed interest bond before he's sixteen. The best rates are listed on the main site under 'banking and saving'. You could even split the £30000 into a one year, a two year and a three year account so that he can only access a third of it each year and then this would help him through university. The downside of this is that interest rates could rise over the next few years and if you lock the money in he could be stuck on lower rates for a while but at least he wouldn't be able to spend it all at once.

Once he is sixteen he can open a help to buy ISA as well which would help after university if and when he wants to buy a house.

Having said all this it's also time he started to be more involved in his financial affairs and he should be included in the discussions. It's not easy but he's soon going to be an adult and needs to learn some money management skills sooner or later. I sympathise with
you not wanting him to waste the money you've been saving for him all his life as I am the mother of a sixteen year old and we are facing similar dilemmas.

silver145

16/18/21, none of these ages mean "they will be financially mature" i personally would keep it in my own name until i deem they are mature enough for it.

"I would be grateful for any suggestions as to how we can keep the money 'safe' until he has a genuine need for it (university, car etc). "

Is it possible to withdraw the cash and put it into an account with your name. Take away his ownership until until you decide because ones he comes of age, legally that money is his and if he finds out through credit history search etc then you can not stop him

cloud_dog

silver145 wrote: »

16/18/21, none of these ages mean "they will be financially mature" i personally would keep it in my own name until i deem they are mature enough for it.

Too late for that.

silver145 wrote: »

Is it possible to withdraw the cash and put it into an account with your name. Take away his ownership until until you decide because ones he comes of age, legally that money is his and if he finds out through credit history search etc then you can not stop him

Isn't that fraud? As you rightly point out the money is actually, legally owned by the child. Also, Mr Taxman might have something to say about it.

The best the OP can do at this point in time is to look to lock the money away in fixed rate / access account (as has been mentioned) and / or add some in to a Help to Buy ISA (which can only be used under limited rules).