How much interest do I owe my son? His savings used to offset mortgage

artyboy

https://forums.moneysavingexpert.com/discussion/comment/81875445#Comment_81875445

Although that's all before you deduct the cost of 18 years food and lodgings 😁

Altior

There was a long period where inflation was far beyond typical savings rates.

Discounting all other factors I would pop the individual annual deposits into the BoE inflation calculator, and tot them up. It's imperfect, but shouldn't be significantly materially detrimental (to the 'child').

Bigwheels1111

I see this from your perspective and his.

I was always borrowing money from my Dad.

£100 here and there, at one point it was £1000 a month to pay rent and bills.

I always paid it back, he never asked for any interest.

As I got a head, I would give him any spare cash I had to save for it me.

Then borrow some more off him.

Was the loan his money or mine.

I look at it as it was his money which made me pay it back.

I never thought about getting any interest.

When I had enough for a depost, My Dad found me a nice house, did a great deal.

Delt with everything, paid all the upfront costs etc.

At the solicitors I was asked how much deposit i had, 9k I said.

My Dad said No. 18k he matched my saving, As a gift for turning my life around.

You put a house over your sons head, fed, clothed educated him etc.

How many times has can I borrow a tenner been heard in the house.

Was it ever repaid ?.

Just thinking you should give him any interest over and above this is very magnanimous of yourself.

You are a great Dad.

The amount will not matter its the thought that counts.

Kim_13

Until the child is 18 (or 16 if Premium Bonds) the money is not under their sole control so I don't see it as wrong to borrow it provided the child is returned to the position they would have been in had the money been earning interest all along - the child benefits from the roof over their head and there being more money to do activities etc with as money is not being wasted paying interest to the bank. Of course, if the child is being educated about money and it is known that they are saving for something in particular, then that would be wrong.

The capital plus interest you would have paid to the bank and a bit on top for borrowing it without the child's knowledge and agreement (if this was the case) seems fair enough to me. Adults might have earned more interest in normal savings since 2023, but child savings seemed to be lower in that period so I don't think they've lost interest as a result with those amounts.

Even if the child would now pay tax on their savings interest, the whole sum will fit into a Cash ISA (if that is what they choose) at the moment so no additional tax liability has been created.

boingy

https://forums.moneysavingexpert.com/discussion/comment/81876267#Comment_81876267

Yep, sadly you are on the right forum for judgement!

But there are some useful answers too.