Page 3 | AIBU -50k - NS&I

JessicaRabbit23 · 2026-03-20T12:55:23+00:00

AIBU to put £50k each into a premium bonds account for my 3 kids whilst I wait for August to pay my mortgage off so I don’t get charged fees? Not sure if it’s morally wrong or not.

BoudiccaRuled · 20/03/2026 14:06

You'll make more putting it in a short term savings account, even though you need to pay tax on the interest.

limeandwater · 20/03/2026 14:05

MrsMuggin · 20/03/2026 14:04

Why not? When you open a nominee for account and fund it, you're legally giving the funds to the child. If you then put them back in your own name you're stealing the funds.
I don't understand the rationale for doing this when it could be put in a savings account in the OP's name.
The only reason I can think of is to hide the true owner of the funds or evade tax on interest.

Show quote history

Evade tax on interest?

It would be a few pounds!

MrsMuggin · 20/03/2026 14:04

limeandwater · 20/03/2026 14:00

It really isn't!

Show quote history

Why not? When you open a nominee for account and fund it, you're legally giving the funds to the child. If you then put them back in your own name you're stealing the funds.
I don't understand the rationale for doing this when it could be put in a savings account in the OP's name.
The only reason I can think of is to hide the true owner of the funds or evade tax on interest.

limeandwater · 20/03/2026 14:03

RawBloomers · 20/03/2026 14:02

If you think tax dodging is immoral, then yes, it's immoral.

But it isn't tax dodging!

RawBloomers · 20/03/2026 14:02

If you think tax dodging is immoral, then yes, it's immoral.

limeandwater · 20/03/2026 14:00

MrsMuggin · 20/03/2026 13:59

It's definitely fraud, possibly also theft and money laundering, there is a chance it will be picked up and reported. Why wouldn't you just split it across various savings accounts until August?

It really isn't!

MrsMuggin · 20/03/2026 13:59

It's definitely fraud, possibly also theft and money laundering, there is a chance it will be picked up and reported. Why wouldn't you just split it across various savings accounts until August?

Thechaseison71 · 20/03/2026 13:55

daisychain01 · 20/03/2026 13:05

If your intention is to withdraw the funds from all 3 accounts in August, what's the point. Why does paying £150k into PBs help your situation? You'd only have about 3 months before you have to withdrew the money.

Err might win something. Not going to gain much interest in that time. Nice problem to have though

JustMyView13 · 20/03/2026 13:53

kohlrabislaw · 20/03/2026 13:43

I interpreted the post as putting £50k in for each of her 3 kids so I thought she had £150k which is obviously more than the isa allowance but maybe I misunderstood.

Show quote history

Fair point.
That said, personally I would still utilise a mix of cash ISA & regular interest bearing accounts. The interest can always be paid into a pension pot to ensure a net position of tax free is maintained.

kohlrabislaw · 20/03/2026 13:53

@JessicaRabbit23this article might be a useful read https://www.thisismoney.co.uk/money/saving/article-14189213/Can-max-Premium-Bonds-two-children-boost-chances-winning.html

Winter2020 · 20/03/2026 13:51

JessicaRabbit23 · 20/03/2026 12:58

If I pay my mortgage off now I get charged £4050 ERC. Vs August it’s 50% of that

Show quote history

Have you looked how much interest you are paying on the mortgage each month? The early repayment charge and mortgage interest might cancel each other out. Sounds like you still have to pay a 2k early repayment charge if you wait until August. Might be worth paying it now and start saving on your mortgage payments.

limeandwater · 20/03/2026 13:44

Lilyhatesjaz · 20/03/2026 13:44

If you put it in their names it legally belongs to them this could cause issues when you take it out to pay for your house as the solicitors will ask where your money is from.

Again that's not true.

Lilyhatesjaz · 20/03/2026 13:44

If you put it in their names it legally belongs to them this could cause issues when you take it out to pay for your house as the solicitors will ask where your money is from.

kohlrabislaw · 20/03/2026 13:43

JustMyView13 · 20/03/2026 13:37

Yes, you're overcomplicating things. Just put get an instant access ISA - put £20k in now, another £20k in on the 6th April, and have £10k in a regular instant access savings account. I don't understand why you're bringing your children into it, and also premium bonds is a lottery.

I interpreted the post as putting £50k in for each of her 3 kids so I thought she had £150k which is obviously more than the isa allowance but maybe I misunderstood.

kohlrabislaw · 20/03/2026 13:39

Premium Bonds are tax-free because they don’t pay interest—instead you’re entered into a monthly prize draw, and any winnings are treated like lottery prizes, which aren’t taxed in the UK. The downside is there’s no guaranteed return.

JustMyView13 · 20/03/2026 13:37

Yes, you're overcomplicating things. Just put get an instant access ISA - put £20k in now, another £20k in on the 6th April, and have £10k in a regular instant access savings account. I don't understand why you're bringing your children into it, and also premium bonds is a lottery.

limeandwater · 20/03/2026 13:26

Czerwonitz · 20/03/2026 13:24

Because the money does not belong to her children and her children are not receiving the benefit of it

Show quote history

You can legally withdraw PB you have purchased for your children at anytime you wish.

There is no tax advantage to The OP whatsoever.

TaxBrain · 20/03/2026 13:26

HArderthan1thought · 20/03/2026 13:05

I think it might potentially be fraud, on the basis you'd have to pay tax on the £150k until you use it to pay off your mortgage in August

What tax? She could put it in a non interest bearing account until she needs it.

MidnightPatrol · 20/03/2026 13:26

You aren’t supposed to, but you can.

Maybe put any winnings from those accounts in a JISA for them. Or take them for a nice day out.

Czerwonitz · 20/03/2026 13:24

limeandwater · 20/03/2026 13:13

Why is she fraudulently claiming?

Show quote history

Because the money does not belong to her children and her children are not receiving the benefit of it

WorriedRelative · 20/03/2026 13:23

Have you used your full ISA allowance this year? If not that's the best place for the first £20k, then you get a new isa allowance in April so can put another £20k in there. A cash isa will probably perform better the premium bonds and the interest will still be tax free. If you haven't used your PB limit put £50k in there too.

There are issues with putting the money in your kids names, I would just use a savings account and suck up the small amount of tax on any interest earmed over your allowance.

limeandwater · 20/03/2026 13:17

kohlrabislaw · 20/03/2026 13:16

@limeandwatershe is transferring money to her kids to avoid paying tax on interest. Then taking the money back for herself. Therefore tax avoidance.

It still makes no sense.

She would still be better off by keeping the money in a bank.

kohlrabislaw · 20/03/2026 13:16

@limeandwatershe is transferring money to her kids to avoid paying tax on interest. Then taking the money back for herself. Therefore tax avoidance.

limeandwater · 20/03/2026 13:13

HArderthan1thought · 20/03/2026 13:09

Because interest would be earnt on it, if OP keep it an account in her name, and you pay tax on interest if it's more than £1k. The PB is not directly for the benefit of the children.

Show quote history

That makes no sense.

kohlrabislaw · 20/03/2026 13:13

Honestly I wouldn’t risk it. There will be a paper trail that could come back to bite you. Divide it up and put it in high interest savings instead. As someone else has pointed out you have to wait a full month before the bonds are in the draw anyway so that’s a full month interest lost. Plus there’s a chance you might have lower than average luck with your PBs.