Children inherited money

RiderOnTheStorm

Hi,

My children (16 and 12) have inherited around £8500 each from their grandpaents.

The both currently have several Halifax savings accounts and I am looking for recommendations of what to do with this inheritance.

Put it all in stock and shares isas? or split it between a S&S ISA and cash ISA?

Or split it 3 ways between the ISAs and open up a pension for them. We could move the Halifax money across to whichever avenue we go down.

Any advice would be grealty appreciated.

Enzo_L

I would rule out pension for a start.

They become entitled to do what they want with the money at 18 in England, Wales and Northern Ireland and at 16 in Scotland, so I don't think they'd thank you for locking it in a pension that they can't access until they're 57 years old.

LHW99

Do they have JISA's? If so, maybe some in that and some in their savings accounts. Does depend on how well they are likely to handle it, as once 18 anything in their own accounts is theirs to do with as they will.

The advantage of a pension is they can't get it till mid-late 50's - the disadvantage of a pension is the same!

IMO the 16yo is old enough to take part in a conversation about it. The younger one may be, or may not yet

Vitor

I'd say £250 spending money, £1000 into premium bonds, balance into S&S JISA for 12yo and 2 year fixed savings account for 16 yo

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82127901#Comment_82127901

Quite a good plan, but normally with Premium Bonds it is best to hold larger sums than that. With just a £1000, they may well not get any prizes for a long time.

Eco_Miser

Further disadvantages of pension - over 40+ years it would be easy to lose track of the pension, and it be lost forever.

When they're short of £8k for a house deposit (or to furnish the home, or other sensible spending) they will hate you for locking that money away.

Some future chancellor could bring back limits on a pension fund, and this pension prevent them saving tax on their future contributions. Remote but possible.

silvercar

have they inherited it directly or is there a stipulation in the will that they shouldn’t have it until a certain age?

Baldytyke88

I did put £500 in a pension for my daughter, she was 25, so 40+ years to grow and it will help her to learn about investing. She is presently thinking about putting the £1k+ into a UK unit trust.

If you are going to put it into their savings accounts, you are losing control and influence over when and what they spend it on.

dunstonh

Before you decide anything, you need to clarify if this is an inheritance from an estate based on instructions in a Will. Or it is a pre-death "inheritance" gift?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82128367#Comment_82128367

But it's their money, and their right to decide what to do with it - obviously it's reasonable (and usually necessary) for a parent to take certain decisions on their behalf while they're still under 18, but when they reach that age they're entitled to use their own money as they see fit, and the parents have no right to control it from then, and shouldn't do anything that impedes that choice.

Your discretionary donation of money to your daughter is an entirely different scenario from the inheritance one that the thread is about…

xylophone

You say that this is an inheritance from their grandparents.

Do you mean that a widowed grandparent who inherited the estate of a late spouse has recently died and left a bequest to each child?

The bequests are immediate and unconditional?

If so, the monies belong to each child absolutely.

Does each of them have a JISA?