Saving for children who have lost their Mum

dreammcostume

Hi, my lovely friend passed away last week leaving 2 sons without parents (their dad isn’t in their lives). I set up a gofundme (for the boys who lost their mum) and it’s climbing nicely. They’re currently with their elderly grandparents who are not very tech savvy, so I’d need to be able to do it myself. I’d like to put the money in bank accounts for them when they get older, but to be accessible before they reach 18 if necessary. Obviously I don’t want anyone but the boys to be able to access it. Which banks with good interest should I approach please?

Sea_Shell

What a lovely thing to have done.

Although I don't think you'll be able to open the accounts for them.   Possibly only their legal guardians can.   But you could sit with them while they do.

Someone else hopefully will advise the best accounts, possibly ISAs.

Sea_Shell

Also, how do gofundme actually release the money?  To you directly, on trust, that you'll pass it on?

xylophone

It seems to me that you ( the grandparents) will need to set up an account held in bare trust for each of the boys.
Example https://www.bathbuildingsociety.co.uk/savings/personal-savings/Junior Saver

You will then be able to release funds for the benefit of each child as the need arises.
If the boys have JISAs, it could be a good idea to make contributions to them so that money is available to them and university age.

tacpot12

Yes, well done for helping them in this way. 

You might want to check whether the grandparents have life insurance that would pay out enough that other members of the family would not be financially stretched if anything happened to the grandparents and they took on the two boys. The grandparents may need to adjust their wills; something to be done as soon as the raw grief of losing their daughter has abated. It would be wise to put in place alternative arrangement to look after the boys if anything happens to the grandparents. 

You might also check whether the father is paying child maintenance. They may be good reasons why your friend was not receiving child maintenance from the father, but if there weren't or the reasons have changed, it might be worth exploring the idea of the father paying some child maintenance to the grandparents, or asking the Child Maintenance Service to chase him for this. 

It will be worth discussing the fund and its value with the boys. The sooner they learn about this money the better. They also need to understand that the money will have been given in sympathy, and will not be re-donated if they fritter it away. Over the coming years, you need to prepare them to receive the money and spend it wisely. 

Sea_Shell

How old are they currently, both the kids and the grandparents?

Albermarle

Which banks with good interest should I approach please?

Interest rates are very low at the moment and will probably stay like that for a while . Some accounts pay a little more than others but it would not make a huge difference one way or another, and following some of the advice above would be more of a priority.

However here is a comparison website , maybe useful for future reference .

https://moneyfacts.co.uk/

jsmith9

do not put it in a bank or savings account - inflation will reduce its value. how old are the children?

dreammcostume

The boys are 10 and 13.
what’s the best thing to do to protect the money?

Newly_retired

Who are the legal guardians of the children? That may or may not be the grandparents, as it is possible to make someone guardian in your will but for practical purposes the children may be better living with someone else. Did their mum leave a will and name guardians?
As you set up this fund I presume you are the Trustee of it, but I suggest consulting the guardians/ grandparents/ children. It may be that you need some legal advice to make sure the terms of this Trust are agreed and understood.
Meanwhile it needs to be in a financial institution which has full FSCS protection up to £85,000.

Eco_Miser

jsmith9 said:

do not put it in a bank or savings account - inflation will reduce its value.

Inflation will reduce its value wherever you put it. Fortunately inflation is low at the moment and Children's Saving Accounts will pay more in interest than it loses to inflation.

Investments in equity funds will likely pay even more but carry the risk of capital loss (theoretically up to 100%, but 50% is more likely maximum, 5% swings are common).

If the guardians or children are interested in investing, there is much on this forum to help.