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Grandparents' savings and grandchildren

(13 Posts)
BreconBeBuggered Thu 26-Oct-17 10:05:29

For many years, MIL has been saving from her meagre earnings for a house deposit for her grandson. Now said grandson has graduated and working full-time, but he lives in the south-east, where he'd need about 3 times as much to put down a deposit, assuming he earned enough to get a mortgage in that part of the country and was ready to buy, neither of which applies.
ILs, meanwhile, are beginning to get anxious about this pot of money. They could hand it over to the grandson, but don't want to, in case it gets frittered away. But they don't want to hang on to it either, in case their health suddenly goes down the toilet and everything is clawed back to pay for care home fees.
Any ideas about where to stow it away safely, other than under the bed? Right now I can't look after it myself, in case I need to claim benefits.

Ecclesiastes Thu 26-Oct-17 10:07:01

But they don't want to hang on to it either, in case their health suddenly goes down the toilet and everything is clawed back to pay for care home fees.

Tell them to spend it all on scratchcards. It's no more than they deserve.

Applesandpears23 Thu 26-Oct-17 10:10:30

You can buy special savings accounts that lock the money away for 3 or 5 years. Obviously your son would have to open it in his name but it would put the money beyond frittering away access.

FruitBadger Thu 26-Oct-17 10:17:45

Pay it into a Lifetime ISA in the grandchild's name (assuming they feel comfortable with it being in his name?) The limit is £4,000 investment per annum, so they could do that much now, and the same the other side of April. The grandchild would then also benefit for the 25% government bonus when the funds are withdrawn as a house deposit. Alternatively, they could open a pension in his name and invest in that.

Up to £3,000 per annum would be disregarded for IHT, about on excess would be subject to the 7 year rule.

Worth talking to someone like Age Concern regarding any potential implications for Deprivation of Assets re Care Home fees.

BreconBeBuggered Thu 26-Oct-17 10:31:52

Very helpful suggestions, thanks. I don't think the shop carries that many scratchcards. Unlikely their estate would be subject to IHT at current rates even if they hung on to every last penny. House is worth considerably less than £200,000.
Contacting Age Concern is a great plan. I've seen people get away with murder giving assets away, but ILs are the kind of people who'd get caught out.

Viviennemary Thu 26-Oct-17 20:39:20

Heaven forbid that having a nice sum of money stashed away should prevent you from claiming benefits. Tell them to donate it to charity.

Ttbb Thu 26-Oct-17 20:47:01

Or you could do the socially responsible thing and not defraud the government?

Mosaic123 Thu 26-Oct-17 20:52:50

See a lawyer and set up some kind of Trust for the Grandson. It's very kind of them.

BreconBeBuggered Fri 27-Oct-17 00:33:35

Thanks to those who offered sincere advice, which I shall pass on.

I didn't realise goady fuckery extended out to these parts of the board. It's not my money to spend or have any say over. I was just wondering if there was some way of easing their minds.

Babyroobs Fri 27-Oct-17 10:47:47

Could she open up one of those house buying ISA's for them where the government give another 20% or something?

MinnowAndTheBear Fri 27-Oct-17 10:51:46

She could give it to her grandson in a trust fund, only to be used for x reason. Eg house deposit, wedding. You could act as trustee.
If grandson ever needed to claim benefits himself, this money would not be taken into account because it has been specified that it is not to be used for daily living expenses.

SilverySurfer Mon 30-Oct-17 19:54:42

Depends if the GPs want to be put in a council paid home smelling of cabbages and pee, or use their money to ensure they lived in a modicum of comfort. Their choice of course. I shall choose the latter if my time comes and use the money from the sale of my home.

BreconBeBuggered Wed 01-Nov-17 00:04:04

I don't think the money they have saved up for their DGS would pay for more than a couple of months each in any decent local care home. I only mentioned their house in relation to their assets falling short of IHT thresholds; of course they're keeping hold of that plus their own savings to meet their future needs.

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