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Original poster

WWYD premium bonds

196 replies

SmileAndNod · 02/12/2021 15:43

I have 3 DCs. They were all given premium bonds when they were born by grandparents which I hold in trust until they're 18.

One of them has won quite a bit of money (to us). Not a life changing amount, but it would probably be a good heft of a deposit on a house.

Do we split into 3, and do the same if the other 2 ever won anything? And where do we put it? A lovely problem to have but I'm ever so slightly in shock.

OP posts:
Original poster
SmileAndNod · 03/12/2021 06:57

@MollysDolly

You do know the bonds are completely under you control. There's nothing stopping you from cashing the lot out, including the winnings, for yourself.

Whilst that would be a shitty thing to do, I just wanted to point out that you are fully able to do that because you're getting a lot of false information here. So absolutely you can distribute what you wish.

In fact, what you could do, is cash out the lot. Then with the total split in three, purchase new bonds, all equal in monetary value, and the kids will never know who won because those bonds don't exist anymore.

This is a great idea!

I will take advice, but overnight have been wrestling with the fact that I can't not treat the children equally. Maybe gp shouldn't have gone down the pb route but that's where we are.

OP posts:
sashagabadon · 03/12/2021 07:07

I think it’s fair to split anything over say £2k. Otherwise you risk resentment and sibling fall out later. And I actually think ask them but don’t tell them which one has won and see what they all say. They can then answer without knowing if they are the winning child.

Fairyliz · 03/12/2021 07:09

My sister and I (both in our 60’s) were bought premium bonds when we were born.
In 1968 I won £25 and my mum made me share it with my sister, it still feels unfair nowadays!
Think I would be even more cross if it had been a large amount.

MysteriousMonkey · 03/12/2021 07:14

I think there is real potential for resentment and bitterness from the other children when they find out. Split it and reinvest into premium bonds for all of them. Inform the children straight away this is what you will do with any winnings.

towers14 · 03/12/2021 07:21

I'd go with @MollysDolly, great idea.
My ds's child trust fund has done far better than the savings policy for my dd did. He's going to get the same has her and then the excess will be split between them so they will receive the same amount.

ponkydonkey · 03/12/2021 07:35

Personally I'd put it in a savings account or split 3 ways and add to premium bonds

18 year olds are not always sensible when it comes to large amounts of money! Isa will automatically be available to them when they turn 18
Savings accounts can be moved and transferred as can premium bonds.

Have a look at money saving expert.com

He has some great advice on kids savings, university fees etc

fuckyourpronouns · 03/12/2021 07:49

I would cash out too and split between the 3 for a large amount.

I have 2 kids and we had a situation where a family member gave one child a large am amount of money and not the other. I withdrew 50% and put it in the others saving account so it was more even.

I look at it this way: we make the decision to save for our children so when they're older they'll have a deposit for a house or whatever. That means that I get to decide how that money is distributed until they are 18. Smaller PB winnings have just been reinvested into the kids account - I don't need them to be completely even- but if it was a larger win (500+) id split it.

sashagabadon · 03/12/2021 08:37

Re. Splitting equally, premium bonds are luck. Nothing else. The child that won is just lucky to get the winning bond which presumably could equally have gone to the siblings. And then lucky that bond came up. They have not earned the money or bought the winning lottery ticket ( for example) with their pocket money. The bonds were a gift in the first place.
Those reasons would support splitting between the siblings as it could have happened to any of them.

RoastPotatoQueen · 03/12/2021 08:39

I wouldn't. It's the child's who won it.

littlebilliie · 03/12/2021 08:46

I'm sorry Op it belongs to the child. If you try to hide this the summary of prizes will show up.

Invest for the winner and so their Junior ISA and forget about it.

Gearedtoyou · 03/12/2021 08:46

You're children are going to have different luck in life. One might become a millionaire, one might have terrible health or some other circumstance that means they're rarely in work, one might marry someone who's inherited a fortune early.

You can't even it up, as much as you want to and this money belongs to the child who won it.

MollysDolly · 03/12/2021 08:50

You can't even it up, as much as you want to

The whole point, is that actually OP can even it up if she wants too. Because she can make that decision for her children.

Their luck as adults is different.

Gearedtoyou · 03/12/2021 08:54

@MollysDolly

You can't even it up, as much as you want to

The whole point, is that actually OP can even it up if she wants too. Because she can make that decision for her children.

Their luck as adults is different.

No she can't. She's obliged to act in the children's interest and giving away their money doesn't do that. The only way she could even it up is if she were in a position to give the other DC similar.
MollysDolly · 03/12/2021 08:59

But she can. Whether she should comes down to personal opinion. But whether she can, isn't up for debate.

Premium bonds are set up so parents can do just this.

KineticSand · 03/12/2021 09:05

There was a thread on here a while ago from someone who's primary age son inherited a chunk of money and she was told to invest it on his behalf until he was 18. She invested it in extending the family house and the son got a brilliant big bedroom and the value of the house went up. When he turned 18 she calculated the return on "his" investment and paid into his savings.

She got slated on the thread but it wasn't illegal and gave the boy and the family a much nicer house to live in and made money on the house value!

sashagabadon · 03/12/2021 09:06

@MollysDolly

You can't even it up, as much as you want to

The whole point, is that actually OP can even it up if she wants too. Because she can make that decision for her children.

Their luck as adults is different.

Agreed. Adults make their own “luck”but this luck is entirely arbitrary. The winning bond could have gone to any child. If it had been a cash prize the child had won throug their own endeavours the argument would be different but this isn’t. I’d ask the children ( without telling them who had won) and suggest splitting so they know what you are doing and why. Don’t keep it a secret.
Gearedtoyou · 03/12/2021 09:06

@MollysDolly

But she can. Whether she should comes down to personal opinion. But whether she can, isn't up for debate.

Premium bonds are set up so parents can do just this.

No they're not. They're held in trust so the parents can operate them, but parents still have to make decisions in the best interest of the bond holder.

It would be possible to move the money, but not legally. Highly unlikely anyone would know perhaps, but it would be an abuse of the power.

KineticSand · 03/12/2021 09:08

Also, posters who are saying PBs are not a trust they are actually within parental control are right. They do not have the strict trust style rules around them am all.

The new Jonathan Franzen novel Crossroads has a storyline in it where 1 sibling inherits from an aunt and the other 3 don't, the impact of what the parents decide to do is huge. It's a good exploration of this type of dilemma.

Gearedtoyou · 03/12/2021 09:12

I've always thought PBs were a good idea for GPs to give to children, especially with savings interest so low. I'd never thought about the can of worms they could open.

123ZYX · 03/12/2021 09:15

If, for example, it's the 8 year old who had the win and you split it, what happens if the 14 year old gets a big win when she's 19? At that point, she will have gained from the 8 year old's win and won't be under any obligation to share her own. At what point does the sharing stop? Will they still have to share wins when they're all adults?

Gearedtoyou · 03/12/2021 09:20

I had a (slightly) similar hypothetical discussion with my dad.

I have a large PB holding, accumulated over a lifetime of saving. If I get a big win (you never know!) should he adjust his will so DSis gets more? Alternatively, DSis is married to the only child of wealthy parents, so perhaps Dad's will should be adjusted for that?. I was widdowed young etc etc

CliffsofMohair · 03/12/2021 09:31

@Kezzie200

It's hard but I think you hold it on trust so, in theory, the losing party could complain, even legally, if they were to ever know.

It's hard though. My kids had an informal agreement between them that anything 500 plus they'd split. They were never lucky enough to test it.

Once they got to 18 they were put in their own names so they wouldn't now.

Christ imagine being the child who realised you won enough to put down a deposit etc and your mother and given 2/3 away.
KineticSand · 03/12/2021 09:36

@CliffsofMohair You should read Crossroads that I mentioned just now! It unpicks this exact dilemma so well!

KineticSand · 03/12/2021 09:37

I am now thinking that families should open one PB account, say in the mum's name, and have that as the family account and everyone agrees all winnings split from the word go.

CavernousScream · 03/12/2021 09:41

Premium bonds are not a trust. Stop giving the OP made up advice. There is no legal direction at all on what she should do with that money. It’s a moral dilemma precisely because there is no law to tell her what to do.