Long Term Savings 17 Year Old

ld123098

Hi all,
My son has a reasonable amount of money that my wife and I have been saving for him since birth, hopefully which will be used as a house deposit. He is currently at college and will hopefully then go on to University, so he doesn't yet need the money. Is there any way that he can take advantage of the decent 5 year fixed rates available at present, as he's only 17 and the ones I've looked at only seem to be available to 18 year olds? By the time he's 18 (October) the rates may very well have dropped. Any advice on his best options are much appreciated.....

xylophone

Is this money in his account or yours?

In a CTF/JISA?

ld123098

xylophone said:

Is this money in his account or yours?

In a CTF/JISA?

It's in his account, a child saver but the rates are really poor. 

friolento

There are some children's accounts with quite decent rates, though these would only help for the next year or so. https://moneyfactscompare.co.uk/savings-accounts/childrens-savings-accounts/

Until April 6 this year, he can also open an adult ISA but obviously all he can put into it is max £20k by then. From April 6, the rules change, and he needs to be 18 to open another adult ISA.

ld123098

JamesRobinson48 said:

Wouldn't some of this money come in handy at Uni?  Might he want to buy a car before the next 5 years is up?

It seems a shame to irrevocably lock up your son's money, for many years, shortly before he turns 18.  Unless you think he is likely to rush around spending it imprudently.  But you haven't indicated such concerns.

If a 5 year fix is a must, I'm unsure why you believe that being under 18 is a constraint here.  Granted, the market rates for 5 years are unappealing and certainly far below those available for 1 or 2 years tenor.  But if it has to be 5 years, currently some of the better rates are from Mansfield BS (4.50%, no min age stated) and Cambridge BS (4.25%, min age 16).  If a large, high street name is preferred, there's always Nationwide BS (4%, min age 16).

Hi,

We can fund his University, are paying for his lessons and will buy him a car when needed. I don't think he will spend the money imprudently, he is well aware of what we wanted him to use it for and is comfortable with that and sensible. As he doesn't need it, the idea of a 5 year fixed is just to maximise it whilst the rates are good, nothing more, so that when he does come to buy a property he has the biggest deposit possible. The ones I looked at had a minimum age of 18, but I'll take a look at Mansfield BS. Thanks

Newbie_John

You can always open Premium Bonds for your child - about 4% return and then when he turns 18 revise the decision.

Bizzywizard

Hi,
My daughter is also 17. She has been in a saturday job since 16 and saved every sigle penny. She poped £4k in a 3 year bond paying 5.2% with Nationwide and will avaible in May 2025. She also has a Santander account with a savings account attached paying £200 a month for a year think this is 8%, she has a Nationwide saver to paying 5.2%. She is well on her way to having 2 sets of £4k money to pay into a LISA once she is 18 (£4k will turn into £5k). I think the second set of money can go into the LISA after april (4k will turn into £5) if not it will go in on her 19th birthday. So she will have a 10k deposit just as she starts Uni (if she goes). She also has other pots of money and will keep her saturday job/work in the holidays as its transferable to another store. My daughter is a fitness freak (runs for fun!) so is not into drinking etc and it going down the healthy route (unlike me) I'm sure this may change if she goes to Uni, but she has always been very money minded, hence locking the money away. Hope this helps.

xylophone

You say that you (parents) gifted the capital for the account. The account is not a CTF/JISA. Is there a reason why not?

Are you aware of the £100 (per parent) rule (does not apply to CTF/JISA).

You say that the rate is poor  (but the capital could be be enough to generate a sum of interest on which  you are taxable).

https://www.gov.uk/savings-for-children

https://webarchive.nationalarchives.gov.uk/ukgwa/+/http://www.hmrc.gov.uk/families/babsi.htm     

is pre interest paid gross/personal savings allowance but explains the principle.

Albermarle

We can fund his University,

Not sure if you are aware but for the large majority of students ( and their parents) it makes financial sense to use Student Loans to fund tuition fees, and some of the maintenance/spending money. Then the latter can be topped up with family money if necessary.

There are a few reasons, but the main one is that unlike real loans this one may well not have to be repaid.

ld123098

Albermarle said:

We can fund his University,

Not sure if you are aware but for the large majority of students ( and their parents) it makes financial sense to use Student Loans to fund tuition fees, and some of the maintenance/spending money. Then the latter can be topped up with family money if necessary.

There are a few reasons, but the main one is that unlike real loans this one may well not have to be repaid.

Apologies, I wasn't clear. His tuition fees would definitely come from a student loan, and possibly some of his living expenses. We would happily plug the gaps, so what I was saying was that he wouldn't need his savings for University..

ld123098

xylophone said:

You say that you (parents) gifted the capital for the account. The account is not a CTF/JISA. Is there a reason why not?

Are you aware of the £100 (per parent) rule (does not apply to CTF/JISA).

You say that the rate is poor  (but the capital could be be enough to generate a sum of interest on which  you are taxable).

https://www.gov.uk/savings-for-children

https://webarchive.nationalarchives.gov.uk/ukgwa/+/http://www.hmrc.gov.uk/families/babsi.htm     

is pre interest paid gross/personal savings allowance but explains the principle.

Yes, we've put the money in his account over a period of years. It's a child saver, I don't recall why that account was chosen. Would you mind elaborating on the £100 per parent rule please. thanks