Can Bare Trust savings be transferred to different providers?

nw2425

As new grandparents we are looking to save regular small amounts for our grandson and have been advised a Bare Trust is our best option (so he can access the money when he turns 18).


However I have always been one to move any savings around in search of the best rates/returns.


If the savings are in a Bare Trust can we (as grandparents/trustees) still move the money to a different provider as rates change?


Have searched forums and the internet and found very little information on Bare Trusts let alone moving them around.
Thanks in advance

cloud_dog

A Bare Trust is merely a notation for creating the trust (for want of a word). None of us are able to transfer a savings account from building society A to building society B, even within an ISA you cannot transfer the account, merely the funds retained within the ISA wrapper.

So, in your scenario every time you transfer to a new account you would need to close the old one and open a new one (JISAs are treated the same as ISAs for tranfers).

Why not deposit money in to your GC JISA or save some money in your own name (for the GC); tax considerations permitting.

Reaper

Given you are investing small amounts regularly over a long period of time have you considered investing it instead of saving it?

xylophone

As new grandparents we are looking to save regular small amounts for our grandson and have been advised a Bare Trust is our best option (so he can access the money when he turns 18).

If you wish to gift the money to your grandchild now, the account would be held in his name in bare trust.

It would be possible to hold several accounts in bare trust - for example, a Virgin Child account, a Halifax child account, an investment account etc.

However, for regular small amounts this would hardly be practical.

It might be most convenient for the family if one of the child's parents were to open a JISA for him and for you to contribute.

A JISA can be all stocks/shares or all cash or a mixture of the two.

If the child is very young now, stocks and shares are likely to give the best return over the long term.

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

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

IanSt

I expect you will want to do the same for any future grandchildren that come along, so it may prove easier for you to evenly distribute the amounts out at a suitable time by just saving under your own names rather than in each of them.

As these are long term then might I also suggest that you put at least the first 10 years of contributions into investments rather than savings.

nw2425

Thanks cloud_dog for the reply.


We had considered a JISA but his parents have already opened one for him and I believe there is a linit of one per child (and we want our funds kept separate).


I think you may still have answered my intended question with your explanation about opening and closing accounts - we would want to be able to do this to move the funds around for the best return.


You've also got me thinking about whether there is any benefit to using a Bare trust rather than just keeping the funds in our name as you suggest. Do you know of any benefits to make a Bare trust worthwile As we are only talking about £500 a year I don't think there'll be any real tax implications.

nw2425

Reaper wrote: »

Given you are investing small amounts regularly over a long period of time have you considered investing it instead of saving it?

Thanks Reaper for your thoughts.


Yes, investing is also a consideration. My poor use of terminolgy there I'm afraid. Saving or investing are both options.



I'd still value any thoughts on whether, once set up, the funds can be moved to get better returns.
Thanks

nw2425

Thanks xylophone for the reply.


We had considered a JISA but his parents have already opened one for him and I believe there is a linit of one per child (and we want our funds kept separate).


Investing in stocks and shares (or any other investments) is certainly an option. My question would still apply though, once set -up with one provider could we still switch the funds if we feel better returns are available elsewhere?


Thanks

nw2425

IanSt wrote: »

I expect you will want to do the same for any future grandchildren that come along, so it may prove easier for you to evenly distribute the amounts out at a suitable time by just saving under your own names rather than in each of them.

As these are long term then might I also suggest that you put at least the first 10 years of contributions into investments rather than savings.

Thanks IanSt for your reply.


Yes, we will also be looking at investing rather than saving (my poor use of terminology I'm afraid). My question of being able to move the funds still applies though.


As with one of the other respondents, you now have me thinking about whether there would be any benefit to using a Bare trust rather than just keepign the funds in our names. Woul dyou know?


Thanks

xylophone

As with one of the other respondents, you now have me thinking about whether there would be any benefit to using a Bare trust rather than just keepign the funds in our names. Woul dyou know?

You might wish to think of your own ISAs (or other savings/investments) as "earmarked" for your grandchild and just make gifts from them at a time of your choosing

You would make specific mention of a gift in your will so that the money would go to the child should you predecease him.

Otherwise, if you wish to invest for a child outside a JISA, then you can open an investment account held in bare Trust for a child.

https://www.hl.co.uk/news/articles/archive/bare-trusts-tax-efficient-investing-for-a-grandchild

https://www.youinvest.co.uk/investing-for-children/dealing-accounts-for-children

https://monevator.com/low-cost-index-trackers/

https://monevator.com/using-vanguard-lifestrategy-funds-life/

Reaper

nw2425 wrote: »

As with one of the other respondents, you now have me thinking about whether there would be any benefit to using a Bare trust rather than just keepign the funds in our names. Woul dyou know?

As with everything there are pros and cons. The main benefits are tax. You may have used up your tax limits (interest, capital gains etc) whereas it is highly unlikely the child has made use of them and this allows them to do so.

Also if they are in your name and you do not survive until the day you planned to hand it over there may be inheritance tax to pay, but unlikely in a Bare Trust.

You must also remember to put that part of your savings/investments in your will so the money actually goes to them, not a problem with a Bare Trust as the child already owns it.

nw2425 wrote: »

I'd still value any thoughts on whether, once set up, the funds can be moved to get better returns.

I'll give an example of a Bare Trust you could do. BMO are an investment trust company. They will set up the Bare Trust for free if you want when you open a Junior Investment Account https://www.bmogam.com/gb-en/retail/plans-explained/jia/
They will charge you £25 + VATpa to run the account so consider how much you are investing to check it is worth it.

You can switch between 10 funds whenever you want, paying just the standard trading fees (the choice includes the famous F&C IT, the first ever fund still going today).

It's not a recommendation as I don't know your circumstances but something like that might be what you are after.