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Best saving account for 16 year old but still managed by parent?

noitsnotme
noitsnotme Posts: 1,203 Forumite
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edited 1 July 2020 at 11:20AM in Savings & investments
We've been putting money every month in to a Halifax Kids Monthly Saver for the last few years.  Every anniversary that gets transferred into a Kids Everyday Saver.  The child has now turned 16 so is no longer eligible for the Monthly Saver and the Everyday Saver is now only paying 0.01%.

There's about £4k in total that I want to find a new saving product for.  While the child is very sensible and does have his own bank accounts, this is money we would like to keep back and surprise him with later in life, perhaps towards a car.

Are there any suitable products for a 16 - 18 year old that we as parents can open in his name but keep it as a surprise for later in life?  I would prefer not to put it in to a child ISA as I want us to have the ability to perhaps use it to buy a car as a surprise rather than it automatically become his when he's 18.


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  • eskbanker
    eskbanker Posts: 35,223 Forumite
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    Are there any suitable products for a 16 - 18 year old that we as parents can open in his name but keep it as a surprise for later in life?  I would prefer not to put it in to a child ISA as I want us to have the ability to perhaps use it to buy a car as a surprise rather than it automatically become his when he's 18.
    Just to be clear, a child automatically has the right to access money in any account in their name at 18, that's not just a JISA characteristic....
  • xylophone
    xylophone Posts: 45,426 Forumite
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    This money actually belongs to your child now.
    Once a child reaches 18 (16 in Scotland), he has the right to access and control of any money held  for him in bare trust.
    And it would be your duty as Trustee to let him know about the existence of the account as he becomes responsible for his own tax affairs.
    I would prefer not to put it in to a child ISA 

    Does your child already have a CTF/JISA?

  • noitsnotme
    noitsnotme Posts: 1,203 Forumite
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    eskbanker said:
    Just to be clear, a child automatically has the right to access money in any account in their name at 18, that's not just a JISA characteristic....
    Yes I understand that.  My thoughts are it would be easier for us to access the money to buy him something as a surprise if the account was still in trust.  My understanding was that if it is put in a JISA then we no longer have any access at all.  It may well end up that we hand him the account anyway but I just wanted to keep the options open.

    We have other money invested longer term that is earmarked for our children, the money currently in Halifax is just fun money really and I just like the idea of perhaps for his 18th birthday being able to do something more fun with it for him than just handing him an account number.
  • Malthusian
    Malthusian Posts: 11,053 Forumite
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    Yes I understand that.  My thoughts are it would be easier for us to access the money to buy him something as a surprise if the account was still in trust.
    You can't buy someone a present with their own money!
    When he turns 18 you need to hand the money over to him and let him make his own decisions. If you handed him a car and said "surprise, we spent your trust fund on a car lulz" he could sue you for the money (minus the second-hand value of the car) if he wasn't happy. Which he'd have every right to be as he may not have wanted a car, or may have preferred to spend a grand or two on an old banger and keep the other £3k as a starting point for a house deposit.
    Trustees do have the power to spend minor beneficiaries' money for their sole benefit (the classic example being education), but spending their money on a car isn't an appropriate use of this power if you don't know whether the beneficiary wants it or not. (And it's shaky ground if they do.)
    If you want to "surprise him" you need to use money that he doesn't already own, e.g. the longer term money you have "earmarked" for him, assuming you are still the legal owner and the "earmarking" is only mental.
  • noitsnotme
    noitsnotme Posts: 1,203 Forumite
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    edited 1 July 2020 at 2:21PM
    Fair enough and thanks for the info, I wasn't aware of that.  In that case I guess the JISA is the best option for the money in the Halifax accounts between now and him turning 18 (he doesn't already have one)?
  • noitsnotme
    noitsnotme Posts: 1,203 Forumite
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    xylophone said:
    (he doesn't already have one)?

    Does he have a CTF? He can't have both a CTF and a JISA.

    A CTF can be transferred into a JISA.

    I forgot about that, yes he does.  It only has the initial government contribution so that would need to be transferred to the JISA first.
  • wmb194
    wmb194 Posts: 4,274 Forumite
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    You can keep Barclays children's accounts in bare trust until they are 18. Lloyds Banking Group, which includes Halifax, always wants to pass them over at 16, which apparently is the law in Scotland but not England. The difference in domicile might explain the difference between the two banks: Barclays is domiciled in England whilst LBG, since the merger with HBOS, is domiciled in Scotland.
  • noitsnotme
    noitsnotme Posts: 1,203 Forumite
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    wmb194 said:
    You can keep Barclays children's accounts in bare trust until they are 18. Lloyds Banking Group, which includes Halifax, always wants to pass them over at 16, which apparently is the law in Scotland but not England. The difference in domicile might explain the difference between the two banks: Barclays is domiciled in England whilst LBG, since the merger with HBOS, is domiciled in Scotland.
    The letter from Halifax says we can carry on saving in trust past his 16th birthday if we wish, there is just no incentive to do so with only a 0.01% interest rate.  We are in England.
  • wmb194
    wmb194 Posts: 4,274 Forumite
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    edited 2 July 2020 at 3:59PM
    wmb194 said:
    You can keep Barclays children's accounts in bare trust until they are 18. Lloyds Banking Group, which includes Halifax, always wants to pass them over at 16, which apparently is the law in Scotland but not England. The difference in domicile might explain the difference between the two banks: Barclays is domiciled in England whilst LBG, since the merger with HBOS, is domiciled in Scotland.
    The letter from Halifax says we can carry on saving in trust past his 16th birthday if we wish, there is just no incentive to do so with only a 0.01% interest rate.  We are in England.
    Ah, okay, I see it now, that's good. LBG employees I've spoken with and the terms I looked at gave me a different impression: probably to do with all of the, 'we will contact the child at 16' stuff. From Halifax's website, "...before the child’s 16th birthday we’ll write to you to tell you that the account will change to an Everyday Saver account, which currently has an interest rate of 0.01%. You will hold this in trust for the child.' 
    You could try Barclays. Its child account currently pays 2%, falling to 1.5% at the end of the month. It also has a £100pm, 3.5% children's regular saver.
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