Money Moral Dilemma: Our child won a Premium Bonds prize - should they share it with their sibling?

BadAnnie

One of life's biggest lessons is that life is not fair and does not treat everybody equally. It is a lesson we all have to learn, including you. You were the one that chose to "save" for them in a way that might give them unequal returns. Live with it! They will eventually learn a valuable lesson and if you are saving any more for them I suggest you choose an ISA that will at least give the same returns.

rachel00000000

No it belongs to the child that won 

coxeey

No, they are not your premium bonds. 

Also don’t forget the gift tax if you move money around. 

If you decide to share, then you need to decide how you will share ALL the other things. If one gets more of something than the other then share that. 

Why halve the win of one of them. 

They have perhaps £30k+ each to start with and if you share it now, what happens if there is a big win when they are 16 years old or more?
What amount is big enough to share?
 Would you buy shares for them and split the dividends if one had more than the other?
 

john_evmk

Split the money.

We buy for our three grandchildren - one daughter has two of them. My daughters have agreed that big wins will be split three ways.

Remember it can also work the other way as well - the one that didn't win this time could win the jackpot in the future.

silvercar

This happened to me as a child of about 10. Over 50 years later I still remember the unfairness.

I won £25, an absolute fortune to a 10 year old in the 70s. My parents bought £10 of premium bonds for me and my sister and I was allowed to spend the remaining £5 on a doll's house. I remembering being very annoyed, especially as my (little) sister was also allowed to play with my doll's house.

We then agreed that future wins wouldn't be shared. I don't know if either of us have won with those bonds since. 

Alilock10

Yes, they should share the winnings. They are children and presumably were given the Bonds on an equal basis, with an arbitrary division of numbers, so it’s just luck if one wins - it could have been the other one. If they had chosen the numbers themselves it might be different. I would advise when they become adults the Bonds are definitely divided and they then become individually responsible for keeping, selling or adding to their bonds and any winnings they incur.

spaghettihoop5

For one of them to actually win in Premium Bonds they must have a decent amount in their accounts.

Say for example, they had £6,000 in Premium Bonds. Instead of putting it in there, I would suggest a Junior SIPP. If you had invested £6,000 when they were born, in a low cost Global Index Tracker, e.g. https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-ftse-global-all-cap-index-accumulation, that on average performs with a 10% return (some years higher, some lower), say inflation averaged at 2% resulting in a NET return of 8%, then by the time they are 68 which is the current retirement age, they would have over £1.3 million pounds. You would know then that when they have retired, they would have you to thank for a nice comfortable retirement long after you're gone. Even if they are cursing you until the age of 40 that they don't have access to it...

This is the power of compound interest and the time invested in the stock market for so long. There are plenty of compound interest calculators online that can help you visualise this. It will also be a good lesson for them in investing.

I'd withdraw both divide it up and do the above.

(Note: Junior SIPPs allowance is £3,600 so to get the fund up to £6,000, you would have to make 2 deposits over 2 years. There is also Tax Relief of 20%, so you can put in £2,880 each year and HMRC will top it up to £3,600. They also will be able to have access to it if they decide to retire early at 58, but note from the chart below, it would be half this value)

JayD

Leave everything alone. Each bond belongs to each child and you don't know what the future will bring re Premium Bond prizes for either of them. Time may well even them up. Regardless of this, it's how it is panning out at the moment and you must hope that the children will make the best decisions when they are old enough to.

Jason9091

Tiredofworking said:

No
It's a life lesson.
Sometimes no matter how much you deserve something as much or maybe more than a peer, they get it and you don't, that's life, it isn't fair.
If the child who didn't win learns this at an early age they will be far the wealthier for it

You're right that life often isn't fair. But why would you want to increase the amount of unfairness in the world? Deliberately choosing to increase the unfairness for your own child is cruel.

Jason9091

BadAnnie said:

One of life's biggest lessons is that life is not fair and does not treat everybody equally. It is a lesson we all have to learn, including you. You were the one that chose to "save" for them in a way that might give them unequal returns. Live with it! They will eventually learn a valuable lesson and if you are saving any more for them I suggest you choose an ISA that will at least give the same returns.

You write that as if this it's the only way to teach a child that lesson. You also seem unforgiving when the quesion asker no doubt at this point realises that they've made a mistake.