Premium Bonds for Second Child

mstevo

Morning,

Our first child was kindly gifted money into premium bonds, and we have invested other money in stocks.

Our second child has also received money to invest in stocks but not in premium bonds. There is quite a difference in total amounts for both children. We don't expect the second child to be gifted the same so would like to split the current money in the bonds equally.

When logging into the account we manage for our first born we have the option to 'cash out'

Other than ethical questions would it be ok cashing out half and open a second account for the youngest or would this be seen as us in effect stealing money from the first born? the grandparents who have gifted the money have no issue it been split and I hope our oldest would understand when he is old enough and just be happy with the kind gifts he has recieved.

refluxer

Legally speaking, I don't think this is your decision to make because the bonds belong to the child and you're just the named contact on the account while they're under 16.

From https://www.thisismoney.co.uk/money/experts/article-2193046/Can-I-22k-Premium-Bonds-I-bought-estranged-son.html

"When Bonds are purchased for a child they do legally belong to the child. The responsible parent is only authorised to manage them on behalf of the child while he is under 16."

I guess there will be certain circumstances in which selling the bonds would be both legally and morally acceptable (death, serious illness or severe financial hardship etc) but, in the case you're describing, the ethical circumstances would be hard to ignore for me, personally - taking money that was gifted to the first child and giving it to the second would be wrong, IMO. If the grandparents have over-stretched themselves giving to the first child then that's unfortunate, but I personally think that the onus should be on them to remedy the situation if it bothers them and hopefully they could find a fairer way than the solution you're proposing.

I hope this doesn't come across as too harsh. Even when kids are treated equally, they're bound to end up with differing amounts of savings for various reasons - the different stocks or funds you're invested in (and at different times), the amounts given to each child by friends and relatives simply increasing or decreasing over time etc. I've even had the odd situation where I suspect that a relative has simply forgotten how much they gave for one child's birthday and has given the other a different amount unintentionally. It's just the way things work out and I wouldn't get too hung up about it. 

IanManc

mstevo said:

Morning,

Our first child was kindly gifted money into premium bonds, and we have invested other money in stocks.

Our second child has also received money to invest in stocks but not in premium bonds. There is quite a difference in total amounts for both children. We don't expect the second child to be gifted the same so would like to split the current money in the bonds equally.

When logging into the account we manage for our first born we have the option to 'cash out'

Other than ethical questions would it be ok cashing out half and open a second account for the youngest or would this be seen as us in effect stealing money from the first born? the grandparents who have gifted the money have no issue it been split and I hope our oldest would understand when he is old enough and just be happy with the kind gifts he has recieved.

It wouldn't be "seen as" or "effectively". It would be theft of money belonging to one child and giving it to another. 

You are the trustee for the older child. You have to act in that child's best interests while you are trustee. Appropriating their money with the intention of permanently depriving them of it isn't in their best interests.

The grandparents' view is irrelevant. It is the child's property not theirs. That's what happens when you give gifts.