Inheritance, premium bonds, student loan and maybe more!

Lunchmunch

Hello...please could someone advise me?
I have recently inherited around £100k.
I have one child who is 18. While I decide how to use the money I would like to put it in premium bonds.
Can I put half into my childs premium bonds too without any tax worries?
He is applying for a student loan and I am concerned it may affect that, although presume that would only be affected by any winnings (which I imagine would count as 'interest' on the bonds).
I'm wondering if I should seek financial advice for a longer term overview, though am worried it may be expensive.
Thank you

eskbanker

Your 18 year old son is now an adult and as such you can't simply buy PBs in his name anymore, although you can give or loan him the money to buy them, but they'd count as his assets, which would need to be declared as such where applicable (e.g. means-tested benefits, but perhaps not student loans).

El_Torro

As I understand it the means tested Student Loan is dependent on how much his parents earn (ie you). I don't think it's related to how many savings the student (or his parents) has. I am happy to be corrected on this point if I'm wrong.

The bigger issue as I see it is that he is an adult, so you will be effectively giving him £50k to put in Premium Bonds in his own name. Are you sure he won't just spend the money rather than save it?

2unlimited91

If you're not definitely giving your child £50k, putting it in their name might look dodgy.

Another good place to park cash temporarily is NS&I Income Bonds, which have a much higher maximum balance of £1m. So you could put £50k in Premium Bonds and the rest in Income Bonds, all in your own name.

Socajam

I second 2unlimited91.
There is no way I would give or put 50K into a child's name.
Helping him with university is another thing, but once that money is in his name, it belongs to him and you are toast.

zagfles

El_Torro said:

As I understand it the means tested Student Loan is dependent on how much his parents earn (ie you). I don't think it's related to how many savings the student (or his parents) has. I am happy to be corrected on this point if I'm wrong.

The bigger issue as I see it is that he is an adult, so you will be effectively giving him £50k to put in Premium Bonds in his own name. Are you sure he won't just spend the money rather than save it?

Taxable interest and other taxable "unearned" income of the student will count towards the means test, however PB prizes are not taxable so AIUI they won't count at all.