Premium bonds for kids

eskbanker

Ozzig said:

Interesting comments about withdrawing their funds though, I think (we've never needed to) we can withdraw money from their accounts so why would NS&I be any different? 

As above, money in accounts in children's names legally belongs to them and it has been known that institutions ask questions about what any withdrawals would be used for if there is any suspicion that parents are abusing their position, an extreme example of which was covered here:

https://forums.moneysavingexpert.com/discussion/6369801/bank-need-meeting-to-transfer-money/p1

daveyjp

bis5 said:

We saved for our son in premium bonds and wish we didn’t as above posters say your child will have control at 16 which we are not happy about as we wanted to build a nest egg but he is drawing it out when he wants the latest  game etc and has stopped reinvesting any winnings.
It’s  to young to give them the responsibility can they vote or take out loans at 16 no so why the law lets them do this.

At 16 children can also get very well paid jobs.  They then earn money and whilst working they aren't spending!

refluxer

bis5 said:

We saved for our son in premium bonds and wish we didn’t as above posters say your child will have control at 16 which we are not happy about as we wanted to build a nest egg but he is drawing it out when he wants the latest  game etc and has stopped reinvesting any winnings.
It’s  to young to give them the responsibility can they vote or take out loans at 16 no so why the law lets them do this.

To be fair though, kids get access to any savings in their name by the time they get to 18 anyway (and sometimes as young as 16) so do you think it's likely his view on spending would change dramatically in the next few years ? 

Ozzig

eskbanker said:

Ozzig said:

Interesting comments about withdrawing their funds though, I think (we've never needed to) we can withdraw money from their accounts so why would NS&I be any different? 

As above, money in accounts in children's names legally belongs to them and it has been known that institutions ask questions about what any withdrawals would be used for if there is any suspicion that parents are abusing their position, an extreme example of which was covered here:

https://forums.moneysavingexpert.com/discussion/6369801/bank-need-meeting-to-transfer-money/p1

Wow, I missed that thread. 

Now I don't know whether to keep their Premium Bonds or shift them to their ISAs.

eskbanker

Ozzig said:

eskbanker said:

Ozzig said:

Interesting comments about withdrawing their funds though, I think (we've never needed to) we can withdraw money from their accounts so why would NS&I be any different? 

As above, money in accounts in children's names legally belongs to them and it has been known that institutions ask questions about what any withdrawals would be used for if there is any suspicion that parents are abusing their position, an extreme example of which was covered here:

https://forums.moneysavingexpert.com/discussion/6369801/bank-need-meeting-to-transfer-money/p1

Wow, I missed that thread. 

Now I don't know whether to keep their Premium Bonds or shift them to their ISAs.

Up to you but the key thing is to ensure that any withdrawals made are for their direct benefit, although obviously money in Junior ISAs can't be withdrawn until 18 anyway, so if you feel that they may need some accessible cash during childhood then JISAs wouldn't be a suitable vehicle for that....

Ozzig

eskbanker said:

Ozzig said:

eskbanker said:

Ozzig said:

Interesting comments about withdrawing their funds though, I think (we've never needed to) we can withdraw money from their accounts so why would NS&I be any different? 

As above, money in accounts in children's names legally belongs to them and it has been known that institutions ask questions about what any withdrawals would be used for if there is any suspicion that parents are abusing their position, an extreme example of which was covered here:

https://forums.moneysavingexpert.com/discussion/6369801/bank-need-meeting-to-transfer-money/p1

Wow, I missed that thread. 

Now I don't know whether to keep their Premium Bonds or shift them to their ISAs.

Up to you but the key thing is to ensure that any withdrawals made are for their direct benefit, although obviously money in Junior ISAs can't be withdrawn until 18 anyway, so if you feel that they may need some accessible cash during childhood then JISAs wouldn't be a suitable vehicle for that....

The plan is definitely nothing gets spent until they're at least 18.
The money doesn't need to be in Premium Bonds, at the time I thought it'd be a bit of fun, but now I'm worried about one of them winning £1m!  Maybe I should just take a long hard look at myself  

Exodi

Ozzig said:

The plan is definitely nothing gets spent until they're at least 18.
The money doesn't need to be in Premium Bonds, at the time I thought it'd be a bit of fun, but now I'm worried about one of them winning £1m!  Maybe I should just take a long hard look at myself  

Haha sorry about that, but it's genuinely the reason I wouldn't consider premium bonds, despite the infinitesimally small odds of it happening. While we jest about the million pound win, any difference would be difficult to explain to children.

I don't have children yet (next year) but what I'm likely to do is ringfence a part of my own investment account to share with them at a later age - e.g. buy VWRL or something (a share which I don't currently hold in my investment account) knowing that this will be the investment I'll share with them when they reach maturity.

It offers the flexibility of reclaiming the money in an emergency (but of course replacing it) and vary the amount you pay out so it's fair. I just don't think it would be fair on the kids to receive a different amount of money depending on their luck on premium bond draws, or investment performance, or even the luck in timing purchases of investments.

Exodi

bis5 said:

We saved for our son in premium bonds and wish we didn’t as above posters say your child will have control at 16 which we are not happy about as we wanted to build a nest egg but he is drawing it out when he wants the latest  game etc and has stopped reinvesting any winnings.
It’s  to young to give them the responsibility can they vote or take out loans at 16 no so why the law lets them do this.

This story is unfortunately old as time. Unfortunately they would have unlikely had an ephiphany on their 18th birthday and suddenly starting focusing on their long term financial horizons so it would have made virtually no difference if they couldn't cash these in until they were 18.

These forums are full of parents thinking their kids would have spent the money on driving lessons, saving for a house deposit or getting a kickstart with their pensions - when in reality the money goes up the wall in a matter of months on monster energy drinks, takeaways, nights out and lootboxes in computer games.

Again, another reason why I currently intend to maintain ownership of the money in my above comments.

I'd rather pay for their driving lessons than beg and plead they don't drop thousands of pounds on the current 'game of the month'.