best place to save large amount for grandchildren

pamelajones

I am the beneficiary of my late daughter's work pension death benefit, to be specifically put into savings or trust for my three grandchildren until aged 21; they are 11, 13, 15.  ISA's only go to 18, trusts seem costly to run, any suggestions on where to save?  it is 40k each.

eskbanker

If the money has to be kept back until they're 21, then a trust will be needed, as any other mechanism will result in the money being accessible to them at 18.

Flugelhorn

I think it will have to be a trust, or else just let them have the money at 18

poseidon1

pamelajones said:

I am the beneficiary of my late daughter's work pension death benefit, to be specifically put into savings or trust for my three grandchildren until aged 21; they are 11, 13, 15.  ISA's only go to 18, trusts seem costly to run, any suggestions on where to save?  it is 40k each.

At £40k each across 3 grandchildren this seemed tailored made for an 18 to 25 trust for minors. 

However, not something you can do yourself, and possibly too  modest a total capital sum to involve the cost of a specialist STEP qualified solicitor to set it up.

Also these trusts have a tax disadvantage, in that income is taxable in the trustees hands at 45% (therefore requiring annual tax returns) , with tax only recoverable by the child when income eventually distributed.

Much as I hate to say it, you may have to fudge the issue, set up JISAs at £9k annual contributions  and hope the children will be responsible when they each take control at age 18 ( which in the case of the oldest is not far away). However this would appear to be a breach of the deceased mother's wishes if age 21 was her stipulation.

xylophone

You say that YOU are the beneficiary.

You then mention the money is specifically for your grandchildren.

Could you clarify the exact position?