AIBU -50k - NS&I

There is no way that will be policed.

If one child wins a lot that is going to cause a lot of problems. It will be their money, not yours or their siblings

What kind of stupid would you have to be to keep £150k in an account that pays no interest (or has a chance of winning PB prizes)?

If you put the money in today it couldn't win until the 1May draw, that's 6 weeks of no interest. If you take money out late in the month, you will lose out then too. But there's a small chance you could beat the interest earned by a considerable margin.

The amount of interest earned would depend on the rate and how much you would be taxed, which would depend on what you earn and what other savings you have.

But its perfectly legal to buy PBs for your DC and its probably not illegal to 'forget' to tell them you've done it, then change your mind about the gift in a few months time, so they won't know to object when you cash in the bonds.

Yes, I agree if OP puts the £150k in an account in her name that pays no interest, there is no interest to tax.

I think it's properly better if OP keeps the money in an account in her name, interest paying or not, - rather than tries to open accounts in her children's names whilst knowing it's purpose of to pay off the mortgage.

I use PB for short term deposits if large amounts regularly - the returns are shite but you might just win the big one.

No it isn't!

Why not just invest it yourself? Put it in an easy access accounts at the highest rates you can find. Legally you can't gift money even to your children and then take it back, that's stealing, so a bit more than morally wrong.

And she can honestly tell them.

When she pays off her mortgage the mortgage provider will want to know where the lump sum came from.

But she doesn't legally have to do that.

@limeandwateryes I’m suggesting OP should put it in normal savings and pay any tax due.

But you would still be up wouldn't you?

The tax saving could be a few hundred pounds depending on the individual circumstances. At a 4% annual rate, £150,000 earns £2,000 interest over 4 months. A higher-rate taxpayer has a personal saving allowance of £500 so that leaves £1,500 taxable. At 40% tax, you pay £600. So it’s not necessarily just a few pounds.

Agree - if she outs them in a PB she earns no interest anyway so it would just be the issue of any winnings (unlikely) whereas even if she has to pay interest on the interest earned on the £150000, she’s still be better off. Plus it’s not fraud.

@PhilosophicalCheeseSandwich if you transfer/extend your existing mortgage on a new property (ie if it is portable) you might not need to pay it off and incur the penalty anyway. Have you spoken to your mortgage provider to check? We have an offset mortgage (so savings reduce the interest due and thus the monthly payment) and it is fully portable to another property. Perhaps speak to your lender and see if they will waive/reduce the penalty charge if you remain with them but switch to a new product?

But she would have done nothing wrong!

If you owe someone money and don't pay it, there's interest to pay, regardless of whether you actually gained interest yourself.

And I've no idea but there's a lot of advances over the years, there's a good chance anyone can do a request for historical account details.

Look at the advances in ai and DNA and all the rest, there's every chance financial data would be more easily accessible in future

Yes it’s fraud if you’re pretending the money is theirs when it’s actually yours, in order to benefit from the additional allowance. It’s also potentially an AML breach.

It’s also completely pointless as you are likely to make more in cash ISAs and instant access savings in your own name.

You could put that £150k into a savings account and earn 4.5% on that for five months. Even if you pay tax on it that is likely to be better than the "winnings" on your lottery ticket (aka premium bond)

What interest? None paid on premium bonds

And how would they even know about it?

We are in exactly the same situation

£100k which will cover balance of mortgage. Mortgage finishes in August and is about 1.2% interest but big £4000 early redemption. No point in paying it off.

We put £20k in myself and my partners Isa for last year. Both accounts are paying about £70 per month interest.
We put £60k in a similar interest level savings account for me, but non ISA, until the new tax year starts and we will move £20k each into new ISA's.

If we are getting approx £70 per £20k thats about £350 per month interest. We put most of it in my accounts as i would pay less tax if we do get near any limits.

Its quite nice seeing the £70's add up. I think it will pay for a holiday for the 2 of us by the time we need to use it as its been in since mid last year.

How do you gift money to your children, only to take it out again to spend on what you want? Unless I don't understand your intentions or the rules with premium bonds.

Why else would op say her own savings are her children's?

I wouldn't do what op suggests. Not for any moral reason particularly, but because the hassle involved would outweigh the potential gain. NS&I can be quite clunky in their processes, and the thought of opening and then closing three holder accounts is not my idea of time well spent. I'd suck up any potential tax liability (may not be relevant depending on where the money is kept and what other savings op has) and make life easy for myself.

It's not really above board so it will rule out any future career as a politician or MP, as if it comes out in the papers your career will be over. But in reality it's probably low down on the scale of tax evasion.
I guess there's also a small chance your children might claim the 50k plus interest back in future, on the basis that you were taking money you had technically given them back again. Maybe you can write a loan agreement on the back of an envelope to cover yourself! The cost of legal advice would be more than any saving.

What fees are you being subjected to?