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Childs Inheritence Saving

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HI,

Just after a bit of advice on what is best. My Father died just over a year ago and left £20,000 each for my two children. (Now 14 and 15). He left this with the intention of going to help fund their further education if they go to college/university. Son is taking his GCSE's this year.
Currently I have the money sitting in my current account, but not really knowing what the best thing to do is. I'm not too keen on risk so would it be best just to put the money into a savings account in their name? Is it even beneficial to go to paying their student loans?

Thanks in advance
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  • MyOnlyPost
    MyOnlyPost Posts: 1,562 Forumite
    edited 27 January 2017 at 11:24AM
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    You can't tie it up too long as they need it soon. Best option would probably be a junior ISA which they can withdraw from only once they are 18

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

    If you open it before April you can put some in in this tax year and some in on or after April 6th to get maximum amount in shortest period of time. Shop around for best rates, I think 3.25% is achievable
    It may sometimes seem like I can't spell, I can, I just can't type
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    Dean123 wrote: »
    Just after a bit of advice on what is best. My Father died just over a year ago and left £20,000 each for my two children. (Now 14 and 15).

    He left this with the intention of going to help fund their further education if they go to college/university.

    Does the will specifically say that they can only inherit if the money is used for their education?

    If not, the money belongs to them once they reach and you can't legally stop them receiving it. It's up to them then what they spend it on.
  • Dean123
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    Thanks for the replies, no it doesn't say specifically and I am aware that they can do what they want with it when they reach 18. I just wanted to give some context. I have read that it may be better to accrue a student loan debt rather than pay it off.

    Junior ISA looks a good option, thank you.
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    Dean123 wrote: »
    Thanks for the replies, no it doesn't say specifically and I am aware that they can do what they want with it when they reach 18. I just wanted to give some context. I have read that it may be better to accrue a student loan debt rather than pay it off.

    I hope they wouldn't use their inheritance instead of getting a student loan!
  • Dean123
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    Yes, this is what we are looking into, my father never had any loan other than a Mortgage and finance for a car after the gave him a better deal with finance (He then put the money he had saved into a separate account and paid off the finance from that!). Me and my partner have only ever had a Mortgage, neither of us had further education so are totally green with regards to student loans. It seems is better to have the loan as it may not need paying back etc. We have only just started looking into it so would be interested if there are any links that explain in plain English!
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

    As it will be a few years before your children go to uni, keep up-to-date with changes - the advice may be different in the future.
  • Dean123
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    That's great, thank you very much
  • Dean123
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    MyOnlyPost wrote: »
    You can't tie it up too long as they need it soon. Best option would probably be a junior ISA which they can withdraw from only once they are 18


    If you open it before April you can put some in in this tax year and some in on or after April 6th to get maximum amount in shortest period of time. Shop around for best rates, I think 3.25% is achievable

    Do you have any suggestions where I could place the balance once I've invested some in the Junior ISA's? It's in my current account at the moment and I would prefer to put it somewhere else as I'd like it to be "tidy"
  • Mojisola
    Mojisola Posts: 35,559 Forumite
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    Dean123 wrote: »
    It's in my current account at the moment and I would prefer to put it somewhere else as I'd like it to be "tidy"

    It's rather more important than that - you have a legal duty to look after the children's inheritance. Having their money in your account is not acceptable.
  • Dean123
    Dean123 Posts: 7 Forumite
    edited 27 January 2017 at 12:41PM
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    I put it in there as a stop gap while I find out where to put it, never realised it was not allowed. I thought I was looking after it! So should I open current accounts in their names, transfer the money to it, then invest in the Junior ISA's from there? Sorry but don't really know much about these things (as you can tell!!)
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