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Disadvantages of putting money in savings account in child's sole name?

(5 Posts)
worriedsick100 Wed 15-Jan-14 22:01:14

I would appreciate your thoughts on this. My son is 8 and I can now open a bank account for him where my name does not need to be on the account with him. He can have an account in his sole name whereas the account he currently has is my name on behalf of him. With the existing account if I die the money would count as mine and form part of my estate for inheritance tax (though in reality it was always his money as it is money he has been given for birthdays etc.) The new account would not count as my money.

Leaving aside the issue of him spending the lot when he knows he has it as I no longer have any say on what he does with it can anyone think of any disadvantages of this where it might prejudice his position? I am thinking for example, applying for student grants for university or something similar that I would not even have thought of as he is only 8? Would it be best to be in his sole name or to leave in my name "for" him. Thanks

CogitoErgoSometimes Thu 16-Jan-14 09:26:55

If he has a lot of personal savings when he hits adulthood it might mean he doesn't qualify for various types of grants or state help. But isn't that the point of giving a young person a nest egg? So that they can be independent?

worriedsick100 Thu 16-Jan-14 13:12:48

I am not talking "loads". As my children are young I am not sure what type of things having any money may affect - for example grants you apply for to live on at university that even having a small amount of money could affect.

Picturesinthefirelight Thu 16-Jan-14 13:16:13

I have accounts in my 10& 12 year kids names due to the high interest rate & tax free they get.

I still have sole control over the account as a signatory. I pay £100 per month into it & withdraw it each year to pay for school/activities fees.

Picturesinthefirelight Thu 16-Jan-14 13:16:34

They are "in trust" accounts.

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