Active discussions

Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask for help with financial pickle

880 replies

ShoebillStork · 19/06/2021 18:11

In 2009 FIL had a win on the Premium Bonds. He gave us £10,000 to invest for DS (at low risk) and the money to be given to DS when he's 18.

I put the money towards a loft conversion. DS is 18 soon and I'm due to remortgage for a better rate. How much do I need to release for him so he gets the £10k plus what it might have gained in interest since 2009.

And should I encourage DS to get a Help to Buy ISA with it?

OP posts:
HotChocolateLover · 19/06/2021 21:55

I’d give him £12k. Reason being the £2k extra includes interest and a bonus for increasing the value on your house. I doubt the £10k would have gone up by £2k in 12 years so it’s a nice compromise.

MouseholeCat · 19/06/2021 21:55

I think you need to do the work to determine what the investment return from increasing bedroom space in your property has been. That's what you actually invested the money in, after all. Comparing it to ISA or any similar product at this stage is really doing him out of money.

GappyValley · 19/06/2021 21:56

@Mpsister

You effectively stole his money. OK, so you intend to pay it back, but your behaviour is inexcusable
I don’t think you know what ‘effectively’ or ‘stole’ mean Confused
NashvilleQueen · 19/06/2021 21:56

You effectively stole his money.

No she didn't. Look up the definition of theft before you throw any silly allegations about. Theft requires an intention to permanently deprive. The fact she's now releasing the money to give it to him - plus interest- completely contradicts this.

maddening · 19/06/2021 21:57

How much has the house increased in value?

DoubleTweenQueen · 19/06/2021 21:58

@GappyValley Equally, on what basis do you define it as a loan rather than an investment?

NashvilleQueen · 19/06/2021 21:58

Why is that relevant? All it needs to have increased by is the amount she needs to give to her son.

LaLaFlottes · 19/06/2021 22:00

Can’t help with how much to give but in terms of what to do with it I agree about the LISA and would put the rest in premium bonds for him - then moving the max amount from premium bonds into the LISA each year maybe?

DD did this with the money from her junior isa when she turned 18.

Tiredteacherxxx · 19/06/2021 22:01

@SmallPrawnEnergy

It’s not the fact op “invested” this money in the house (which could have gone tits up but that’s another post) it’s the sheer contempt in the way she talks about paying him back “get his grubby little hands on it” “he’s not getting that much!!!” “I’ll round it down and take a few as management”. HIS money has enabled you to gain a significant difference in living situation, added interest on your property and it seems like she’s almost resentful in the fact that she has to add interest onto the money she “invested” and annoyed that it’s coming out of her pocket. Add onto the “he’s sat on his arse playing x box for years while I payed the mortgage” comment, it doesn’t even sound like she likes her son.

Maybe he should use whatever crumbs you throw at him to get the fuck away from your toxicity.

But she knows her own child best. She is commenting like this based on her knowledge of her own child.

Let's be totally honest here - some kids are lazy chancers at age 18 (not saying that your boy is this OP!) and it is entirely fair to view them as only wanting to get their grubby hands on it. She has said this because she knows HER child. You don't know her boy or his maturity levels, views, capabilities. There is, I suspect, also some tongue firmly in cheek here from the OP...

She seems to be wanting to give him the money in the fairest way possible - fair to both her and her son.

Why should children not have a responsibility and the capability to contribute to to their household, whether this is financially or in other ways. This cash has not just benefitted the OP - it has benefitted her son too. She made a decision as a parent for the betterment of all of her family - good on her.

DoubleTweenQueen · 19/06/2021 22:01

Who is set to gain, ultimately, in the gain in value of the property, if the op is not intending to realise it? I haven’t read every single post, so it may have already been covered, and if DS will inherit, then sorted?

SunshineCake · 19/06/2021 22:02

His "grubby hands"?Hmm.

BryonyG · 19/06/2021 22:03

Some of these replies are hilarious.

OP, your son didn't invest in your house, he invested by loaning you money which you are now repaying with interest, the same as you would repay a bank. What you used that loan for is actually irrelevant. You wouldn't repay a bank loan based on the increase in your house value. I think repaying with the interest accrued since the time you used the money is perfectly fine.

maddening · 19/06/2021 22:04

If the.£10k had earned 3% for 12 years it would be worth £14k now.

But if the house was worth 100k before the renovation the money paid for and the renovation and increase in value over time meant the house was now worth £150k then the £10k investment could be seen to be worth £15k now.

Tiredteacherxxx · 19/06/2021 22:06

@Twintwix

Why didn't you ask FIL at the time it it was OK to do this? If you knew it would not go down well, it seems really dodgy that you took his money and did what you wanted with it! The money wasn't for you to do what you wantedConfused
The grandfather asked her to invest it how she saw fit??? Why did she need to check with him if he was happy with the route she chose?

Had he wanted it invested in a specific and defined way, he would have either stated that as a caveat or would have invested it for his grandson himself.

Bonkers.

CandyLeBonBon · 19/06/2021 22:07

Junior Isa would deliver between 15-20k in 12 years using 5-8% as a variable interest rate.

£12-14k is absolutely not enough.

If you aren't going to include a return on the percentage of the increased property value, at least make sure you give the equivalent of a proper investment and not some arbitrary sum that you've plucked out of thin air

Twintwix · 19/06/2021 22:09

A few things here. One - OP is totally dishonest and took the money from her FIL for her son and spent it as she wanted. You can dress it up as son getting it back - to me it's not about the son so much as the dishonesty with the FIL and the utter cheek of it. Secondly - remortgaging your home - and if you were to die during the remortgage period? Life insurance payout to cover the house would then reduces your son's inheritance? I just can't see why you didn't clear this with FIL first and if refused, you just had to accept it was his money and not yours.

Twintwix · 19/06/2021 22:10

@Tiredteacherxxx so why does OP think FIL would be livid if he found out?

Wherearemymarbles · 19/06/2021 22:11

Well we have a child trust fund for our kids - low risk
Since 2009 has more than doubled.

So you owe him 20k

WeBuiltThisBuffetOnSausageRoll · 19/06/2021 22:11

If her FIL is so despicable why accept the money at all?

This whole thread is about the FIL wanting to give money to one of his grandsons, full of people saying that OP had no right to borrow it - mainly to make his own life better too - and now the suggestion that she had the right to simply reject the money completely? Confused

His "grubby hands"?

It's an affectionate turn of phrase - plenty of parents call their children 'little devils', but it doesn't mean they actually believe them to be evil incarnate.

Also, I don't really think the main idea behind 'wealth management' is a low-risk investment of £10K for a 6yo.

WeBuiltThisBuffetOnSausageRoll · 19/06/2021 22:14

A few things here. One - OP is totally dishonest and took the money from her FIL for her son and spent it as she wanted.

Yes - on him, as it happens. And he seems to have been very happy over the years with her choice of purchase with the money that she borrowed from him when he had no need for it and is now repaying with interest ready for when he does.

Original poster
ShoebillStork · 19/06/2021 22:18

I do think you're not as savvy as you'd like to think, given you now have to remortgage to realise that investment

I was being tongue in cheek when I referred to my "savvy investment" but ... I'm remortgaging because my deal is coming to an end and I want an even better rate. And adding £10/15k onto a low mortgage is an efficient way to release cash.

OP posts:
arithanaggerton · 19/06/2021 22:18

@Twintwix What about the utter cheek of the FIL giving one grandson £10k and not even acknowledging the other's existence simply because the DP had him too young? This would 100% make me lose respect for him and yes, I'd be unable to take his wishes seriously. If I was the OP and he found out, I'd tell him that he can shove his wishes up his arse.

It was a fucking horrible, nasty, spiteful move from the FIL and so I fully support OP in using the money her own way as long as she intends to give DS the full amount plus interest back, which she is.

The poor, poor stepson.

Kisskiss · 19/06/2021 22:20

10 year uk govt bond yields in 2009 ranged from 2.9-4.08 pct..
if you use the mid of that , so 3.5 pct.. that compounded for 12 years is 51 pct interest..
you need to give your DS 15k

Gallowayan · 19/06/2021 22:22

Depends on what you mean by a low risk investment surely? Could mean anything from a savings account returning a fraction of one percent to a fund returning 10% or more. What you think is low risk depends on your attitude towards risk. Impossible to say what might have happened to an investment you did not choose or make when you should have done. But please don't give him any financial advice

Bythemillpond · 19/06/2021 22:23

I don’t think you did anything wrong

You always intended to pay him back when he got to 18. He has had a nice bedroom you couldn’t have afforded if the money had been sat in a bank account.
I don’t see what the problem is.
I have used dc’s savings to pay the mortgage when they were younger otherwise they would have lost a lot more. They were quite happy that I used it as that is what it was there for and at the time they didn’t miss it. All paid back as times got better.

In our family we share money and help each other out when we need to. We all lost our jobs because of the first lockdown
I had some savings so helped them out
Now they are helping us out as we haven’t had enough money coming in to pay the bills.
I will pay them back and more when I can (hopefully in the next few weeks).

I really can’t understand the people who say they wouldn’t have given their Ds a room of his own and had him share his room with his step brother when the money was there to make everyone’s lives better. When the result is going to be exactly the same