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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:
TheRebelle · 19/06/2021 19:56

I’ve never read so many Pearl clutching replies on one thread! Fraud 🤣🤣🤣

I used to work in a bank and loads of people “borrow” money from their kids accounts and I’m sure most of it never makes it’s way back. It makes sense to use cash that would otherwise being getting a paltry rate of interest rather than taking out a loan.

OP I’d give him £15k which is about £500 interest per year, you can always top it up later on if you’re feeling generous.

Eleoura · 19/06/2021 19:56

And no snippy answers required as I've not researched it fully yet!

You've only had 12 years to research this!!! Hmm

DrManhattan · 19/06/2021 19:56

How long until this gets removed lol

SwimBaby · 19/06/2021 19:57

Deffo Daily Fail

CandyLeBonBon · 19/06/2021 19:58

@DrManhattan

How long until this gets removed lol
For being 'outing'? 😂
burritofan · 19/06/2021 19:58

Hang on, so simultaneously you’re admitting that putting his money in your house was a “savvy investment” that has paid off, but “no way” is he seeing the proceeds of that investment?!

You can’t just invest someone else’s money in one thing, then invent an entirely different investment and pay them that result instead. You chose to invest £10k in the house. The house is now worth X, a % of which is your son’s. You pay him that percentage. Fucking hell.

sst1234 · 19/06/2021 19:58

@ShoebillStork

Thanks for link Candy but I don't know what interest rate to put in.

And can you lot stop trying to make out I've nicked DS's money. He got a cool bedroom (his words), will get £10k plus interest and will inherit the lot when I croak. Which will be very soon if FIL finds out ...

You’re missing the point. You spent it on you, not him. At least own it. If you had invested in a fund, say, that had tech stocks in it, or gold equities, do you realize how much he would have today, way more than any paltry interest he would have earned that you now intend to make up with mortgage borrowing. And yes there are low risk funds out there.
quizqueen · 19/06/2021 20:00

Well, there's hardly been any interest since the crash of 2008/9. ISAs have been as low as 1/4% per annum!! I don't think you'll owe him much more than the original gift amount, to be honest, plus he's gained a lot from his living situation so I don't think you did that bad a thing. Personally, I would have bought Premium Bonds.

sweeneytoddsrazor · 19/06/2021 20:00

If I had POA for a relative would it be ok for me to take £10k for home improvement as I am going to inherit one day?

Original poster
ShoebillStork · 19/06/2021 20:01

if you invested in a cas ISA it would be worth over £16k and if invested in a stocks and shares ISA over £33k. If you want to be really fair you should either aim to give him the higher amount or at least something in the middle as an average of the 2 so £24 - £25,000

Stocks & shares would not - in FIL's opinion - be the low risk investment that he specified. No way is he getting £20k plus. I'm going to be supporting him through uni!

OP posts:
Weirdlynormal · 19/06/2021 20:01

God I've read some crap on this site in the past but some of these posts are just ridiculous.

Give him the money plus inflation and he's in exactly the same position. Most probably ahead of a bank account. Job done,

Gazelda · 19/06/2021 20:05

Did DSS get £10k too?

GappyValley · 19/06/2021 20:06

@sweeneytoddsrazor

If I had POA for a relative would it be ok for me to take £10k for home improvement as I am going to inherit one day?
Not a remotely comparable situation
SeaToSki · 19/06/2021 20:06

www.whatinvestment.co.uk/junior-isas-2617066/

Junior ISA

Lump sum investment in investment companies

£1,000 lump sum investment 10 years ago
Overall weighted average investment company ex VCTs & 3i £2,968

So according to which investment, if you have chosen the best performing Junior ISA you would owe him 29,680

The magic of compound interest and not having to pay tax on the income 😁

Original poster
ShoebillStork · 19/06/2021 20:10

@meadowbreeze

I'm impressed you managed to do a loft conversion for 10k
I wish! Like I said, I put it towards a loft conversion.
OP posts:
sst1234 · 19/06/2021 20:12

OP has decided that she is no way giving him more than a certain amount. So that’s that. OP had no intention of doing what’s best for the son, but more for herself.

Thisisus909 · 19/06/2021 20:15

@MysteriousMonkey

Unlike some others on this thread I 100% think you did the right thing! You bettered DS life by making him his own room and basically made the money work. Now you can pay it back, as you suggested, with the interest it would have got in an ISA and everyone is more than happy. Am so bewildered by some people!

My children inherited a bit of money a few years ago which we needed. They were a little older (8 up) but were more than happy for me to borrow it. As with yours, it helped make everyone's lives at home a bit better!

Totally agree. Such drama over something where no one has lost out in anyway (except maybe poor SS who didn’t get any inheritance despite being equally related to OP’s FIL). I’d be tempted to split the money equally to be honest, but that’s a whole other thread...
Bananahana · 19/06/2021 20:16

You clearly don’t want to give him much, 5k or so, regardless of what that money might have earnt.

It’s irrelevant whether you’re supporting him through Uni, that he had his own bedroom, or that he’ll inherit. You’re the mother that’s what you do. This was his money, not yours.

Either be more honest with yourself: or with your DS and FIL.

Mywingshurt · 19/06/2021 20:18

I'm just piping up to say I think you made a really wise choice doing what you did! Everyone's a winner!

ViewFromTheSteeple · 19/06/2021 20:18

I see it that your son benefited from his money when he got the loft conversion and he also benefits from the initial sum plus interest. He hasn't lost out. This wasn't a will, it was a gift of money to be given at 18. He is still getting that money.

We also did something similar which was a great grandparent gifting money just for the children, nothing specific was mentioned for the future or uni or whatever just "use it for the boys" and we had our very sloped garden re-landscaped so the boys could play on it ie football without it constantly rolling down the garden and put in a climbing frame and swing. We did, as OP is doing, refunded back the money as they were only 8 and 5 at the time we did the garden.

Ds is now 18 and has that money in a bank account for him. We are paying for uni as we have savings for it, the money from his great Grandad is his money to do with what he wants.

somersault · 19/06/2021 20:19

@Howdidigetsoold

How much was the house worth when you added the 10k?

What percentage of the value was that then?

You should get the house valued and then the same % is what you owe your son for the money you used.

Yep, this sounds reasonable
ViewFromTheSteeple · 19/06/2021 20:20

It’s irrelevant whether you’re supporting him through Uni really? At £5k a year from us to top up his student maintenance loan I think that £15k or £20k is quite a lot of money to spend on a dependent adult.

imacuddler · 19/06/2021 20:20

So far we have had fraud and stealing and outrage.

May I now suggest bigamy.

You stated you had three bedrooms before the loft conversion.
So in fact DS didn't really have to share with dss.
Who was using the third bedroom?
Was it your new man?
😂😂😂

ViewFromTheSteeple · 19/06/2021 20:21

Just look at how much interest would have been paid on the initial investment if it had been put into an ISA or savings account, none of this invested in your property crap.

WeBuiltThisBuffetOnSausageRoll · 19/06/2021 20:22

If I had POA for a relative would it be ok for me to take £10k for home improvement as I am going to inherit one day?

POA for a vulnerable adult is completely different from your own juvenile child. If you had POA for another adult and they needed something buying for their daily living or a bill paying, you would use their own money to pay for their purchase/bill on their behalf. Parents don't do that: if their child needs anything (except maybe a small optional treat, if the child gets pocket money), they just pay it themselves.

OP could have invested it in something like ZOPA - lending the money out - but she just loaned it out to herself, making plans to give him his investment and a fair return at the appropriate time.

Some of these replies remind me of the Disney dads who (if they can't otherwise avoid it) make a big play of their supposed generosity with the pittance that they pay to their ex, then complain when their children's mums spend it on the boring but essential elements of providing a home for their children. "I gave you that money for the children, not for you to steal it for yourself" - as if their children somehow don't need their home paid for, heated, electricity, gas and food provided etc.

How would OP's DS really have benefitted more and been happier in retrospect if this money had been sitting in a bank account earning next to nothing and him having to share a bedroom, when OP planned it so that he would have his own amazing bedroom for years and then get the money with the additional interest it could have earned?