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

happenstome

I can't understand why you bought premium bonds for the children in the first place as an ordinary bank account or building society bond would guarantee a steady income, it would also be easier for each child to see how much is going in and out and how much interest is being accrued.  You could get them to look at compound and simple interest and relate it to their savings to make what they are learning in mathematics applicable.
Most children do not have enough money to need to pay tax but if they are over the tax threshold then a Junior ISA would be the answer as it too would show a steady income without any glitches and periods when no money is coming in. If they have been receiving wins on the Premium Bonds regularly that is just luck and it will not necessarily continue.  As you can see someone else who has posted on here has never had a win on it.

badmemory

Why buy a gambling product for a child that is too young to gamble.  Not that I have any right to say this as I have had 2 since 1957, obviously never won.  I wonder how you would feel if, having been bought them as a child but winning as an adult,  the buyer decided they were due a share.

BikingBud

MSE_Laura_F said:

This week's MoneySaver who wants advice asks...

We've bought Premium Bonds in the names of both our children as a way of saving for them. It's been going well, with both children winning small prizes most months. Recently though, one of them won a much bigger prize, so they now have much more saved than the other. Should this be split between both children, or is that our child's decision to make when they're old enough?

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Absolutely not!

How many interventions into random occurrences do you expect to affect during their lives?

If you wanted it to be fair the money should have been placed into identical accounts, with the same exposure to interest rates and returns.   

It wasn't, you decided to place the money into a system with returns that are wholly predicated on chance.

You cannot unpick that now.

BunnyBK

I bought Premium Bonds for my two children also. With a small win, I kept the prize.  Will a larger win I bought more for them both, and shared it equally, with (occasionally)a small gift for myself also. In the end, it was my money until they turned 18, so they didn't get a say in it. The kids won in the end as they had a large sum handed to them on their 18th birthday.

silvercar

BunnyBK said:

I bought Premium Bonds for my two children also. With a small win, I kept the prize.  Will a larger win I bought more for them both, and shared it equally, with (occasionally)a small gift for myself also. In the end, it was my money until they turned 18, so they didn't get a say in it. The kids won in the end as they had a large sum handed to them on their 18th birthday.

Wrong on so many levels. 

Tabieth

Ideally this would have been agreed before buying the bonds but it seems it wasn’t. 

My advice depends on how many bonds each child had originally. If they both have a significant amount, making large wins a fairly regular occurrence, I wouldn’t do anything. Over time the chances are both children will win and so it becomes more equal. (Given the frequency of prices won, this scenario sounds likely). 

If whoever both had a small amount of bonds originally, I’d be more tempted with the sharing option. 

And how old are the children? They are their premium bonds so it’s really up to them what they do with the winnings. They might be very happy to share, they might not be…

69bertie

With a win each month (or nearly each month) we must be talking about a sizeable amount of money - £25grand or so. I win nearly every month (£500 this month's draw) and do have about that sort of money plonked in PB. To me, if Child A's bond won, why on earth would Child A be expected to give anything to Child B? It's either their money to do as they please or its yours. And with average winnings rates, chances are Child B will win more at some time. It's life. Win some, lose some, btw, I lost big in the .com bubble. Spread the risks. Even buy them some Gold - I'm up 100% in 5 years - tax free.

Someone mentioned about having a lot of money at retirement if saved in a JISA. In 40 years time, I suspect even having a million £'s won't buy much. Years ago £6000 would have bought one a sizeable house in London. Now £1.5m will buy you something resembling a rabbit hutch.  

Pollycat

69bertie said:

With a win each month (or nearly each month) we must be talking about a sizeable amount of money - £25grand or so. I win nearly every month (£500 this month's draw) and do have about that sort of money plonked in PB. To me, if Child A's bond won, why on earth would Child A be expected to give anything to Child B? It's either their money to do as they please or its yours. And with average winnings rates, chances are Child B will win more at some time. It's life. Win some, lose some, btw, I lost big in the .com bubble. Spread the risks. Even buy them some Gold - I'm up 100% in 5 years - tax free.

Someone mentioned about having a lot of money at retirement if saved in a JISA. In 40 years time, I suspect even having a million £'s won't buy much. Years ago £6000 would have bought one a sizeable house in London. Now £1.5m will buy you something resembling a rabbit hutch.  

Many, many years ago.

Over 45 years ago, I bought a 2 bed Victorian semi for £6,250.
That was nowhere near London.

Dbellaa_Prospers

Im Team Share, my assumption being that the are younger children

Julia1960

I completely understand why you’re asking this. However, you don’t say how old your children are - I’m guessing they are still very young? I think where you fell down was right from the beginning, when it may have been a good idea to share the money out equally each time one child had a win. It should always have been made clear to them that this was how it was going to work. After all, premium bond wins are based purely on luck and not on any kind of personal effort or achievement. 

Retrospectively I guess it’s going to be a bit more difficult to explain to them why you appear to have “robbed Peter to pay Paul”, but I’m sure as they get older they’ll begin to understand you just wanted to do the best for both of them.