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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:
Clappingforjoy · 20/06/2021 18:13

Thats shameful taking your ds money like that

yoyo1234 · 20/06/2021 18:18

£16, 090... Looked at ONS for UK national house prices for April 2009 and April 2021. That is what £10000 in property would have increased to if it followed the national average.

Flatwhitetostayin · 20/06/2021 18:20

Hi op

Late to the party but I put £500 the gov gave me when my son was born at the beginning of 2010 into a HSBC child Trust fund. 11 years later it is worth £527. You definitely made the right call. Having your own bedroom is a haven and he will have benefitted massively from that growing up. Also your dss having his own space when he stayed would have made a huge difference to him. It was win win.

Good luck whatever you decide to do in paying him back.

I think a lot of people here are quite frankly uptight.

Simcat · 20/06/2021 18:22

@ShoebillStork

I’ve done the same and was based on sound financial advice from an advisor. Sim was in a box room 6ft by 7ft at 15yrs old and he was 6ft.
with the money he was given, I extended and he got a huge room and space he desperately needed as I have him the loft room. I also released money when he was 21 and worked out interest from isa rates and added some more.

I had a few comments from people that this was wrong but then again they were also the ones saying he should be in a bigger room as he was 6ft at 15yrs old. I’ll be honest I never told my mil as she believed that adding money to a mortgage you can’t afford is fine as everyone else does it and you can always sell. Angry

tiredofitall99 · 20/06/2021 18:29

I put some money away in a 5year account in 2011. I'm.sure it was about 3%, when came to reinvest after the 5 years I would have been lucky to get 1% and don't think its changed much since then

Toomuchtrouble4me · 20/06/2021 18:30

I think DS had a win win! Great new bedroom, no sharing and he still gets the 10k for his 18th as intended. You’ve done nothing wrong at all as I’m sure DS would agree.
Can’t help you with interest rates but you could pop into a building society and ask the interest rate on youth savings accounts.
You sound like a wise mum.

Wrotten · 20/06/2021 18:33

I don't think the issue here is whether OP was right or wrong to use the money as she did.

OP was told to invest the money as she saw fit. OP invested it in her house.

Now, instead of giving her son 1/3 of the increase in value the property has gained from the loft conversion, OP wants to give her son what he would have received had she done something differently with it. And OP seems to have that figure capped off in her head at about £14/£15K.

That's what seems really unfair about this situation.

Toomuchtrouble4me · 20/06/2021 18:34

@Clappingforjoy

Thats shameful taking your ds money like that
She didn’t take it. She invested it in improved personal space - much needed. It was never intended to be given until he was 18 and he will get it at 18. So he waits in a tiny room that he shares and gets 10k when he’s 18 or he has great space and a cool room and still gets 10k when he’s 18. It’s a no brainier. Well done op.
Toomuchtrouble4me · 20/06/2021 18:37

@Wrotten

I don't think the issue here is whether OP was right or wrong to use the money as she did.

OP was told to invest the money as she saw fit. OP invested it in her house.

Now, instead of giving her son 1/3 of the increase in value the property has gained from the loft conversion, OP wants to give her son what he would have received had she done something differently with it. And OP seems to have that figure capped off in her head at about £14/£15K.

That's what seems really unfair about this situation.

No way! He was gifted 10k plus interest - which he will get. Would DS have preferred to still get the 10k plus interest but stay in a tiny shared room? No! Such ridiculous self righteous posts on here it’s laughable.
Blossomtoes · 20/06/2021 18:37

Completely agree @Wrotten, that’s my contention too. And now even that’s gone down to £3k for a car.

Wrotten · 20/06/2021 18:43

An interest amount that's been plucked from the air instead of the amount he has actually gained from the investment. That's the point. If OP had invested it elsewhere and it was now worth £30K (say), would everyone be saying "give him the original £10,000 plus a couple of grand more and keep the rest yourself"? Of course not. But that's what's happening.

OP was never meant to gain anything from that money, yet she's played it so she's gained more than her son. And is trying to justify it by saying he will gain when (or more likely, if) he inherits.

niknac1 · 20/06/2021 18:53

The money I put into my child’s Isa has gone up and down but not increased much. His money was likely safer in your lift conversion. Just pop a bit of interest on and don’t worry.

Soulstirring · 20/06/2021 18:56

You do you OP, ignore those that have being over giddy (envious). As if 10k paid for a loft conversion…it went toward.

If you have the funds to return then there’s no issue. I perhaps even think 3% interest is generous given recent interest rates but it would be fair.

Theo1756 · 20/06/2021 18:57

I’m not sure I would be factoring in the final value of the house at some point in the future in how much the 10k is worth today. I would look at a range of values including general inflation, the current value of your house as a result of the building work, how much isas (both cash and stocks) have paid in the last 12 years (compounded). Also make sure you factor in Premium bonds as a good baseline for low risk. I think they have a yield of around 2% on average so I would expect the absolute minimum you should give is c£12,700.

JuneJustRains · 20/06/2021 19:01

OP was told to invest the money as she saw fit.

Not exactly. She was asked to invest it somewhere low risk. I would have taken that to mean a modest interest rate savings account, not stocks and shares. Clearly others would differ.

Original poster
ShoebillStork · 20/06/2021 19:02

I feel so sorry for your son

Don't be a twerp. A boy in less need of pity you could not find.

God I sound like Yoda Grin

OP posts:
JuneJustRains · 20/06/2021 19:03

Who knows what the giver actually had in mind? Maybe he should have invested it himself on behalf of his favoured grandchild.

Wrotten · 20/06/2021 19:05

@JuneJustRains

OP was told to invest the money as she saw fit.

Not exactly. She was asked to invest it somewhere low risk. I would have taken that to mean a modest interest rate savings account, not stocks and shares. Clearly others would differ.

I was trying to not get into my feelings on how OP used the money because I actually think what's happening now is worse.

I agree with you BTW.

Clappingforjoy · 20/06/2021 19:07

I couldn't have done it myself it would have been put straight aside for my ds It just wouldnt feel right with me to have done otherwise.

fakeplantsdontlookreal · 20/06/2021 19:10

I don't see a problem with what you did OP, you invested the money in property, gave DS a lovely bedroom when he needed it, and now he gets the money back with bells on.

I was going to say it should be a minimum of £12-£13K going by some of the calculators, but I think if you can do £15K then that allows for a very decent rate of interest and won't cost you a fortune in a re-mortgage.

CellyBee · 20/06/2021 19:11

I would round it up to 15k but it's a real shame you have to borrow and haven't saved up this money over the years Confused

Bard6817 · 20/06/2021 19:16

Kinda shocked here at the appropriation of funds.

On basic investment return terms you should gb doubling the investment every 5 to 7 years, although Covid has meant that the last 5 have been incredibly profitable. The return should be abouts £30k.

You can present it as you see fit, but i consider what you did theft. Shocked that a parent would do this to their child. It’s not the first time i’ve seen it, won’t be the last, but it still shocks me every time.

Original poster
ShoebillStork · 20/06/2021 19:17

@Simcat - looks like you made the right call for your DS!

OP posts:
Blossomtoes · 20/06/2021 19:21

ignore those that have being over giddy (envious)

Oh please! No envy whatsoever, quite the reverse. I’m so pleased that behaving like this towards my child would never enter my mind. My issue isn’t how the money was used, it’s with the complete insouciance of the attempt to add as little as possible to the £10k now it has to be returned.

It’s quite sickening how many people think profiting from your child is a perfectly reasonable thing to do.

HollyGoLoudly1 · 20/06/2021 19:21

£15k seems totally reasonable to me.

I'm absolutely gobsmacked at posters saying you should give him a % of the house value or similar! I'm 100% with you on this one OP. This has been an eye-opening and entertaining thread Grin

Your son sounds like a lucky kid. Crack on I say Smile

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