To ask for help with financial pickle

[ShoebillStork]

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?

The fair thing to do is to work out what the house was worth 12 years ago before the loft conversion and what it's worth now. So if it was worth, I dunno, 300K 12 years ago, and it's worth 400K now, then it has gone up by 25%. SO you give your DS 10K plus 25% of 10K, that is 125K

Rightio, will do.

Oh wait ...

You took his 10 k and invested it in property (which to be fair is relatively low risk) so the return needs to reflect that. You can’t just decide to give him interest based on opening a low risk savings account because that’s not what you did (and as this thread shows the outcomes could be significantly different depending on the type of account you chose). If you want to re coup money for him having a cool room you can charge him rent….

@TatianaBis

OP does need to rectify the inequity between the 2 boys.

Personally I’d give them half each.

That really would be dishonest.

That really would be dishonest.

Seriously? You should have tackled FIL at the time and said half to each boy or you wouldn’t accept the money.

You and DP have condoned the most horrible favouritism that will be deeply upsetting and divisive between the boys.

If anything is dishonest it is washing your hands of responsibility for this inequitable situation. You and DP are complicit.

Why would OP take half the money for her son and give it to her step son? Obviously if that’s what the FIL had wanted but he didn’t so you can’t really expect her to take from her own child to give to someone else’s!

What was your house worth in 2009 and now. This is what you hand over.

@ShoebillStork

I didn't see a problem with you investing the money in the house because you're paying it back. So there would be no problem. But wow, it's rich to say that splitting the money between the two boys would be dishonest.

I'm starting to think this a troll. Your comments about bedroom's haven't added up. WHy would they need to share in a 3 bed house?

@ShoebillStork

You need to work out the value of the house before and after the loft conversion, calculate the change in value, work out the proportionate value allocated to the 10k and then add 12 years interest on top

God no, he's not getting that much! The value of the house has sky rocketted! I just need to work out how much it would be worth if I'd bunged it in a Junior ISA or something lame!

It only sky rocketed because you used his money. Actually, you invested his money in property. And now you're releasing that investment. Why you wouldn't do that properly and work it out in the way suggested I've no idea. I would in your shoes and find it odd you wouldn't want to act fairly towards your own child. But then I wouldnt have used my child's money as you did in the first place

@TheRebelle

Why would OP take half the money for her son and give it to her step son? Obviously if that’s what the FIL had wanted but he didn’t so you can’t really expect her to take from her own child to give to someone else’s!

Or maybe the OP’s DH - you know the father of the two children - should have told his own father where to shove his money.

But no instead him and the OP decided to do up their house rather than think of the impact that obvious favouritism would have on two kids

I'm really sad for the stepson if this is real.

His grandfather can't stand him through no fault of his own and nobody stood up for him.

@thegreylady

I don’t think investment in property is wrong in any way. Ds will get an appropriate return as his grandfather intended. My only quibble is the exclusion of dss as it is presumably his grandfather too. I think the parents should try to create some funding for him too.

I agree his grandfather should have done the same, but the OP isn't the mother of her step child, so it's nothing to do with her. It's up to her partner to sort that out with his dad.

My daughter’s Junior ISA rate was a pretty solid 3.25% over that period, OP.

I wish someone had told me about all these savings accounts paying 5% over the past 10 years. Right now you can barely get 0.5%. Even in an ISA, you'd be lucky to get 1%.

Very impressed with the way you've handled this thread with good humour and rational responses, OP.

@squeaver

I wish someone had told me about all these savings accounts paying 5% over the past 10 years. Right now you can barely get 0.5%. Even in an ISA, you'd be lucky to get 1%.

Very impressed with the way you've handled this thread with good humour and rational responses, OP.

Look Up junior ISAs. Google is very forthcoming on the matter!

Do you know what, having read every single post I've earned to you OP and get your humour now :) the £15k someone suggested I think is fair. I do think Dad should get SS to a similar sum for parity, but I agree that's not for you to do it's for him.

Earned?! Warmed!!

I’ve checked the results of 10k at 3.25% for 12 years, and it’s £14,678.

So I’d say you owe him ballpark 14-15k.

You could rectify the inequity between the two boys by specifying that your dss is to receive the same amount as you decide to give your son, from your estate,@ShoebillStork, before the rest goes to your son.

That would rectify the unfairness of your FIL giving £10,000 to your son but not to your step son. Though it does also look unfair that your son gets 75% of your estate and your dp’s estates combined (as in, your son gets all of your estate plus half of your dp’s) - unless you are balancing things so that your dss’s share will have the same financial value as what your son will receive.

Thing is, you didn’t invest it in an isa etc, you invested in a property and that has increased the value so that it what should be paid rather than some bizarre fictional calculation of a less good investment so you can fleece him. Totally fine to have invested it in the house but the increased value and difference between the value with and without the conversion is your ds’ true investment amount owed.

Seriously? You should have tackled FIL at the time and said half to each boy or you wouldn’t accept the money

It's not my place to refuse money given to my son. Now if DS wanted to split the £10k (plus interest) with DSS when he reaches 18 then that would be his decision.

DP and FIL don't speak. FiL gave me the money to invest. I'm not in the least bit intimidated by him, my comment suggesting he would kill me was lighthearted!

DSS is utterly spoilt by his maternal grandparents. That doesn't mitigate FIL's dreadful attitude of course but some of you are hurt on his behalf so that might make you feel a bit better.

Right, off to give DS and his mates a lift home from a party ... because I'm such a dreadful mum who doesn't care about him ...

Oh crap, this thread has reminded me that I nicked £90 out of DS3s bank account about two years ago to pay towards Windows. I better work out the % value of the house that was.... Probably owe him a few thousand by now, according to half the posters on here. 😂

I think you’ve been clever with the money OP.

It might be nice to add a bit more to the original lump sum than the appreciation according to the low interest rates though - a good faith bonus so to speak. Because it could have gone wrong with DS’s money.

It's not my place to refuse money given to my son.

Of course it is you’re his mum and step mum to another child. You didn’t have to refuse the money - just inform GF that you would be splitting it equally.

How SS’s maternal grandparents treat him is irrelevant. I’d imagine DS’s maternal GPs aren’t averse to him if they’re around.

You have 2 boys with 1 shared GP who’s treated them very differently. And you’ve condoned it.

I’ve defended your investment of DS’s money in the house through the thread, but I do think that’s a bit off.

@Waterfallgirl

I’m quite shocked that you took the money given in good faith and spent it. And I’m even more shocked that you are quite proud of the fact you did it. And my final 😱 is that even when posters have advised you what it might be worth ( had you invested as you were asked to ) that you are wanting to keep what you handover to DS at the very lowest level you can get away with —because you are paying for university—

I’m thinking that 12 years down the line you are realising how wrong this was.

Why do you all assume her DS will feel 'cheated'?

I don't think I'd give a rat's arse if my parents (who fucking raised me) withheld a grand or whatever from me. Especially if my parents were then going to fork out up to 9k a year for my uni fees.

Those of you crying foul in this thread need to get a serious grip.

I'm starting to think this a troll. Your comments about bedroom's haven't added up. WHy would they need to share in a 3 bed house?

Let me spell it out for you:
3 bedroom =
1 for DP & me
1 for DP office - he works from home and has a lot of equipment
1 for DS which DSS used to share before I committed fraud/stole from my son and did a loft conversion.

Right I'm in the car ...