Children with savings, will parents benefits be impacted

UnsureAboutthis

If grandparents were to gift cash amounts to their grandchildren of several thousand each, and parents were on or went on to benefits, would their benefits be reduced?

I've read about 'Housing Benefits' may be impacted depending on the child's/children's incomes (talking about children sub 18 age) (Not sure if house owners can get 'housing benefits.'
The parents are in the process of buying their place and have 22 years left on the 30-year mortgage.

The money would be paid into possibly an ISA for the children or a Children's Building Society cash account

Both parents struggle with their job due to back problems and trying to seek alternative work/training while they are still working but it is difficult.

Keep_pedalling

The money will belong to the children so will not affect any means tested benefits. It would be different if the money was coming from you rather than grand parents. JISAs are probably the best option especially if they are very young where S&Ss JISAs are a good option. 

Only parents and guardians can set up JISAs but one in place the GPs can pay into them directly. 

HillStreetBlues

As Keep_pedalling stated it's the children's money and isn't counted as household capital.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1163111/admh1.pdf

H1077 Capital owned either legally or beneficially by a dependent child or qualifying young person is not to be included in the capital of the claimant1 . However, the DM may still need to make enquiries about such capital if it appears to be owned by the claimant but is actually beneficially owned by a child or young person for whom they are responsible. 1 WR Act 12, s 5

Try to make sure any payments are direct from the GPs to the children, and you keep a clear paper trail, as they might what to check.

BoGoF

HillStreetBlues said:

Try to make sure any payments are direct from the GPs to the children, and you keep a clear paper trail, as they might what to check

This is important for Income Tax purposes as well as any intetest over £100 on money contributed by parents becomes taxable on the parent.

TELLIT01

As long as the money is paid into an account which is clearly that of the child/children there shouldn't be any problems.  The problems arise when money for grandchildren is paid to the parents account.

UnsureAboutthis

Very helpful!
My understanding now is:

Keep paper/electronic trail
Pay directly into childs account or set up one and pay into that
Any interest over 100 pounds as it stands atm, parent/s pay tax on it

The above gift/s will not affect the parent's benefits if they are claiming any.
I will read up more and again, thank you as your write-ups are much easier to follow.
FYI, we are not gifting a few quid intil a few weeks and will keep on reading. Hopefully, the parents are able to keep jobs/move etc and never have to claim benefits but if they do, then their children's money is there for the children at 18.

Spoonie_Turtle

UnsureAboutthis said:

I've read about 'Housing Benefits' may be impacted depending on the child's/children's incomes (talking about children sub 18 age) (Not sure if house owners can get 'housing benefits.'
The parents are in the process of buying their place and have 22 years left on the 30-year mortgage.

Just to answer this point, Housing Benefit has been replaced by Universal Credit, and if the couple claiming own their home then they won't get any help to pay the mortgage.  There are some housing costs that homeowners can claim help for if they live in a leasehold property, but otherwise no.
https://www.gov.uk/housing-and-universal-credit/property-you-own

Entitlement to UC is based on the parents' financial circumstances.

Yamor

BoGoF said:

HillStreetBlues said:

Try to make sure any payments are direct from the GPs to the children, and you keep a clear paper trail, as they might what to check

This is important for Income Tax purposes as well as any intetest over £100 on money contributed by parents becomes taxable on the parent.

And, as an aside, will also count as 'unearned income' for UC purposes, so will reduce their award £-for-£.