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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:
thamesriviera · 04/12/2021 07:48

THIS!!

Beachbabe1 · 04/12/2021 07:48

Split it equally. They will not understand that 1 of them won that amount and they didn't. There may be resentment and jealousy when they turn 18!

Naughtynovembertree · 04/12/2021 08:00

I agree spilt it and move all the accounts to stocks and shares junior isas.

Pb should really be temporary holding place for money or used as a pot eg I only use it now for tax and car insurance money that I pay into every month.
Seeing the difference between the growth of a few thousand in pb and in my stocks and shares isa its a no brainer.

KeyboardWorriers · 04/12/2021 08:06

@Ihopeyourcakeisshit
it was explained very well on the previous page. I would not be sharing the proceeds without getting legal advice from a trusts lawyer and @mrsm43s has neatly set out what that lawyer is likely to say.

Gladioli23 · 04/12/2021 08:09

@Allywill

One of mine won £1000 when they both were primary school age. I told them that one had won and they had to decide if they wanted the person who won to keep it all or split it between them, of course I didn’t tell them who had won. They both agreed it would be best to split it. To this day they don’t know who won, but it sounds like yours is a much bigger win. I must admit I often pondered what I would do if one won really big and I don’t really have a great answer. I also did check with my dad as he was the one who actually bought them and he said split it.
This seems like the best idea to me?
Magissa · 04/12/2021 08:16

Surely you can check the bonds for prizes. If you share it out between them one day when they are in charge of their own NS&I account they may see what you did and then you will have a problem.
Even though you think now they would share it, sadly things can change as siblings get older.
It seems unfair but don't share it out. As pp said top up to max and get an USA for the rest. Who knows, next month another sibling may win big🤞🏼

Lanique · 04/12/2021 08:33

I'm a bit late to this thread, op, but I do remember thinking that if one of my two happened to win a large amount on the bonds we would split them equally and never tell them who won.

If the figure was a million we would use it to pay off our mortgage (which has luckily never been that big) to enable us to give them a more 'financially liberal' childhood, (and besides, it will all go to them eventually), put a chunk into a Uni fund for them both, pay for one or two amazing family long-haul trips so they'd have memories for ever, start up a pension for them, and then split the rest equally.

Alas, it has never come to pass Smile and they now have access to their own bonds. I'd like to think that if one of them did win big now, that they'd be generous to their sibling.

Lanique · 04/12/2021 08:34

@Allywill what a great idea!

Mindymomo · 04/12/2021 08:40

I fully get everyone’s view, but personally, I would use some of the money on the loft conversion. As a family in a 3 bed semi with 4 adults, in the long term this is going to benefit your family most.

I’m sure the GP would want you to use the money wisely. Speak to DC, don’t tell them which one has won the money and ask them how do feel about using some of the money for the loft conversion.

Hollyhead · 04/12/2021 08:57

You can’t split it, you would be breaking the law.

TheSmallAssassin · 04/12/2021 21:04

@towers14

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.
You do know that the child trust fund will go straight into his name when he is 18, so unless he gives his sister the difference, that's not going to happen!
Embracelife · 04/12/2021 21:50

@Hollyhead

You can’t split it, you would be breaking the law.
Which law?
Hollyhead · 05/12/2021 09:08

It would be some sort of theft wouldn’t it? Taking someone else’s winnings and giving them to someone else.

fakereview · 05/12/2021 09:12

It needs to remain in the name of the child who owns it.
When they are 18 they can make the decision to split it with their siblings if they wish

This.

I also think, as they are all over the age of 7, that they need to sign themselves to access the cash - although that might have changed since I was 7 Grin

fakereview · 05/12/2021 09:14

You can’t split it, you would be breaking the law. Which law

there are laws around trusts and being a trustee - I couldn't tell you which ones but they certainly do exist. It's like having power of attorney, you have to act in the best interests of the person you hold attorney for.

And the OP definitely can't take the money and use it for a loft conversion! It is not hers to use!

MollysDolly · 05/12/2021 09:16

@fakereview

You can’t split it, you would be breaking the law. Which law

there are laws around trusts and being a trustee - I couldn't tell you which ones but they certainly do exist. It's like having power of attorney, you have to act in the best interests of the person you hold attorney for.

And the OP definitely can't take the money and use it for a loft conversion! It is not hers to use!

Premium bonds are not a trust.
fakereview · 05/12/2021 09:16

@MollysDolly

Premium bonds are not a trust.
No but if the parent takes money that belongs to the child, they are acting as a trustee of sorts.

When my son has won prizes (very small ones) he's received a cheque in his name. I am surprised that N&I would send a cheque for a big sum to the parents.

Embracelife · 05/12/2021 09:25

@fakereview

You can’t split it, you would be breaking the law. Which law

there are laws around trusts and being a trustee - I couldn't tell you which ones but they certainly do exist. It's like having power of attorney, you have to act in the best interests of the person you hold attorney for.

And the OP definitely can't take the money and use it for a loft conversion! It is not hers to use!

It could be in best interests to provide individual bedrooms for growing children. Perfectly justified.
Original poster
SmileAndNod · 05/12/2021 09:59

I'm bowing out as this situation has caused me sleepless nights and my anxiety has flared to the point that I'm having panic attacks.

Have spoken hypothetically to the children and the one in question said without hesitation they'd share it with the family. However we're re investing to max out their account until we can find somewhere else to put the money.

And to PP, they bank transfer (or warrant) is paid directly to me. Not the child. Bonds are not in trust so legally no idea what the implications of that are. Clearly morally it would be wrong to use it.

Saying that, if we were again in a situation whereby we were facing homelessness I'd have no hesitation in using money to keep my children from the awfulness of that.

But for now, it's being re invested in their name for them to do as they decide.

OP posts:
campion · 05/12/2021 10:16

Honestly OP, what child in a family of 3 children wouldn't say they'd share it with the family? That's why they're not deemed capable of making financial decisions!

It's solely that child's money though. Premium bonds are a lottery and your child got lucky in the lottery. Your other children haven't lost anything because they never had it in the first place.

Just put the money in a trust / get some independent financial advice.

ElfontheShelfisLookingatYou · 05/12/2021 10:42

Well keep it re invested in pb then because if you put it into isa stock and shares you will out strip the others even worse.

Honestly this wouldn't sweat many pp on here and if you opened up junior isa and brought up some s and p funds which apparently (are on sale) at the moment.. You will give them all thousands to all have a great life start!

Their money should not be in pb anyway unless you want to curtail their money.
One has won great but I bet whatever is in pb would have done so so much better invested in junior isas.

Bunnycat101 · 05/12/2021 11:04

I would split them but depends on the wording of the will. My children inherited but the will was written in a way that we had absolute discretion about how to use the money. The terms of premium bonds are looser than other investments like trusts etc. if you are holding them in a formal trust then you might not have that ability to split so you may need to take legal advice if it is a life changing sum.

Bunnycat101 · 05/12/2021 11:06

And yes prize money for children’s premium bonds go direct to the parents if not reinvested.

Ana27 · 05/12/2021 11:23

OP I am sorry that this is causing you such stress when it should be giving such joy. You are doing exactly the right thing (legally and morally) keeping it for the winning child. If they want to split it when they are an adult and they understand what the money means for them then that will be their decision. I can understand why you are worrying about it but actually the law is really clear, it is their money and the only decision for you is where you keep it until they become an adult.

Ana27 · 05/12/2021 11:29

On the law. It's already been posted upthread but there still seems to be a lot of confusion. The position is the one that I posted earlier. A parent/guardian with parental responsibility can 'receive or recover in [their] own name, for the benefit of the child, property of whatever description and wherever situated which the child is entitled to receive or recover.' This is found in section 3(3) Children Act 1989 here So a parent can receive the child's money in their own name but hold it for the benefit of the child. I assume that this is partly why NS and I insist that it is parents who manage the child's premium bonds and not other relatives. That makes it very clear that the OP holds the winnings for the child's benefit and can't choose to use them for any other purpose.