Any implications?

carl310166

My son is moving back home for about a year so that he can save instead of paying rent etc.

Would there be any implications with him setting up a standing order to my savings account?

He banks with Barclays,and i have suggested that if he saved £1000 a month,it would be a lot better off by getting 5%+ (before tax) than 0.1% in his current account.

The idea is,he transfers money to me each month,then i transfer/write him a cheque in 12 months time.

But i don't want to get caught out with something i am unaware of !

Thanks in advance.

grumbler

There is nothing wrong in doing this unless you are a higher rate taxpayer. However:
1. Barclays have E-savings account paying 4.33%. Yes, this is less than 5%+, but still more than 0.1%
2. For regular savings it is better to use regular saving accounts. Halifax have one with 7%, but monthly amount is limited by £250 per account. You can open 2 accounts and use them for saving £500 per month. Derbyshire BS Regular Saver pays 5.85% and you can save up to £1000 p.m.
3. Both of you can put up to £3000 every tax year into tax-efficient cash ISAs.