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What to do with this money for DCs?

7 replies

ThePlantKiller · 12/01/2025 08:15

MIL passed away last year and left some money for our DCs to be held in trust until they turn 21, they're ages 10 and 13 atm. The cash (£16k each) is currently sitting in their savings accounts but I'm not sure of the best thing to do with it.
Anyone got any advice or experience?

OP posts:
Clawdy · 12/01/2025 08:21

My first thought was Premium Bonds too. They'll enjoy seeing if they've won each month!

ItsFineReally · 12/01/2025 08:24

Given the time period involved until they access the money then a S&S ISA would be worth considering.

ThePlantKiller · 12/01/2025 09:20

Clawdy · 12/01/2025 08:21

My first thought was Premium Bonds too. They'll enjoy seeing if they've won each month!

We don't plan on telling them they have this money until the oldest turns 21 but will look into PBs thanks

OP posts:
YankeeDad · 12/01/2025 09:40

Premium bonds are simple, tax-free and cost-free, but I believe your children would have direct access to the money from age 16, which is quite young.

However, for that sort of amount, you probably want to prioritise simplicity and avoid any sort of fixed costs, which probably rules out setting up a formal trust.

if the point about age 21 is not cast in stone you might consider a junior ISA as the tax wrapper. I believe this would ensure any earnings are tax free, like with Premium Bonds, and that it would also minimise admin costs, but I believe it would require the money to go to them at age 18.

Alternatively, you may be able to put the money in a separate account in your own name, and leave it to them in your will, as a way to avoid any extra admin costs. However, investment earnings would be taxable (on your tax bill) and if you were to die prematurely, IHT might apply, depending what else you own.

The above comments are all about the structure / tax wrapper. Then comes the question about what to invest in. Given that they are 10 and 13, I agree with a PP who suggested you consider stocks and shares, given that the time horizon is long enough, but only if you feel knowledgeable enough to do that. Otherwise, some sort of fixed term deposit, or premium bonds, or perhaps a pair of gilts maturing in the year of each of their 21st birthdays, might make the most sense.

This is not financial advice since it does not take full account of your circumstances - it’s just a non-comprehensive list of ideas for your further consideration.

ViolinsPlayGentlyOn · 12/01/2025 09:43

Alternatively, you may be able to put the money in a separate account in your own name, and leave it to them in your will

But it’s not OP’s money - it needs to be held separately for the children.

I’d be looking at some kind of stocks and shares account over that time period. As it’s a trust, that lets out some of the suggestions like premium bonds.

WillBeatJanuaryBlues · 12/01/2025 09:57

Without a doubt stocks and shares junior isa into index funds op.

Google index fund investing and I'm sure you can find enough info to feel confident enough to put it into a few index funds. There a global index funds covering a huge amount of the best companies in the world (always dominated by us) or the US index funds or India or UK etc or a mix.

I'd leave maybe 2 grand in normal bank cash isa so they can see for themselves and compare the growth.
. In that time you can also start to educate them on investing and interest.

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