Kids savings account v overpaying mortgage

Terry_Towelling

muhandis wrote: »

The way I see it, it would be better to open an account in my 18 month old daughters name and use it to hold any cash that I would otherwise use to overpay my mortgage. I get a slightly better return and better yet still have access to that cash in case I need it.
K

Yes, @Wanttoretireearly, we may be reading more into it but it is always useful to debate stuff and get a broad range of viewpoints.

As far as OP is concerned, I infer that he only said he wouldn't break the law to shut us all up. His original post was quite unequivocal though. He may claim he hasn't implied anything but all of us reading it will have inferred the same. I've highlighted the pertinent text above.

However, when all is said and done, and nothwithstanding the law/account conditions, I can see that even if he were to make irregular use of the cash (which was his to start with) nobody would actually be harmed or lose out - except the bank by a few quid in interest. And, before you all jump on me, I'm not advocating anything improper here, just highlighting a point.

muhandis

Finally got an authoritative answer from an accountant.

- As a Trustee for my children all I need to do is ensure that any funds held in my childrens' names are used for their benefit and that can range from a share of the rent/mortgage, any and all expenses incurred for them (nappies, baby food, travel costs, etc etc). Any day to day expenses that can be reasonably apportioned are fine. As long as any money I withdraw from their accounts is covered by those costs, there is no problem at all.

- As long as I satisfy the above, it's up to me where to put the money, absolutely nothing illegal about putting it in children's accounts for the interest (as long as I pay the tax due on it) and withdrawing when necessary as long as it is offset by money spent on the children.

He did say that I am really overthinking this.

My needs fit perfectly well with the above. Lots of great saving rates for children's accounts - NW 3.5% (5k/child), Barclays reg saver (3.5%), Halifax reg saver (4.5%), Santander 3% (2k/child), etc. I stooze quite a bit and that works well. Won't have to change any of that.

Thanks for all the comments, it was good to get to the bottom of this.

Warm regards,

K