Can anyone answer this premium bonds question because none of the advisors can?!

[Briabal]

I have an account for myself and one for my son. He is 3.

Am I able to use my son’s winnings for whatever I want? Can I withdraw the entire amount and spend it how I want?

I don’t really understand the children’s accounts because isn’t it a back door way of effectively having two accounts for an adult as I can’t see anywhere that the child’s winnings need to be on trust for the child etc? You could just spend it how you want?

so what have the advisors exactly said to this?

No. The winnings are his and should be used for his benefit.

I don't know the answer, but the easiest way around it would be re-invest any winnings back into buying more bonds. It's easy to switch on the website, so it's automatic.

Of course they should be used for him

I mean I guess no one would be checking though would they, if that's what you mean

Depends - if is it money given to him by relatives etc then I would not be comfortable taking the winnings and I would re reinvesting all of it. If it's an account you have set up for him with your money then I don't see a problem with you taking prize money - all of it or reinvesting or half and half.

There are no restrictions on children accounts parents can do what they like with the money should they choose to do so.

Essentially yes, you can spend it how you want. Who checks your bank account and all your receipts? Your son benefits by having all bills paid for, he benefits by having enough food and day trips, a coat, rent paid, he benefits by having a healthy and well nourished mother. So spend it as you wish.

The only caution I would have is who put the money there? If it is a grandparent etc they may have meant it for him when he is older. But if you put it there then do as you wish.

DH and I have bought the maximum amount of bonds in DD’s name (we both have some in ours too) - we bought them with an inheritance (DH’s) plus a lump sum I’d received for something else.

Ultimately our aim is to buy a bigger house, (which DD will benefit from). We will use all the money plus what we are continuing to save now and including ‘DD’s’ bonds. In the meantime any of DD’s winnings get invested in another savings account purely for DD which will remain for DD only.

@coffeenootropics I’ve called three times and been told it’s for the adult to decide, but it doesn’t make sense to me and then when questioned they can’t explain it either?

isn’t that like giving the adult two accounts? And a childless person can only have one? I don’t get it

DH and I have bought the maximum amount of bonds in DD’s name (we both have some in ours too) - we bought them with an inheritance (DH’s) plus a lump sum I’d received for something else.

Ultimately our aim is to buy a bigger house, (which DD will benefit from). We will use all the money plus what we are continuing to save now and including ‘DD’s’ bonds. In the meantime any of DD’s winnings get invested in another savings account purely for DD which will remain for DD only.

@QuickNameChangeforThis1 do you have to invest her winnings for her or could you spend them on… I don’t know, a handbag for yourself though? What are the actual rules? It doesn’t seem right?

It's effectively just another bank account or investment account. See..
https://www.wiselaw.co.uk/parent-take-money-child-bank-account/#:~:text=However%2C%20there%20are%20many%20accounts,funds%20from%20the%20child's%20account.

I tried my best to find this out at the time we did it too - it was DH’s plan and I couldn’t help but feel uncomfortable about it. No rules as far as I can tell - the winnings go into DH’s account and never been any attempt to check or follow up on what we do with them. So yeah, in effect it does seem like a way for an adult to get two accounts?

What I’d like is for us to save enough that we can leave DD’s untouched - which is in part why we haven’t made the move yet. We really have outgrown where we are now though, so not sure whether we’re going to be able to hang on long enough!

I think it's a question of ethics rather than legality.

If your child is given money - in cash, or into an account that you have control of and you spend it on your handbag, I'm not sure legally the child can do anything about it.

Parents can and do raid their children's piggy banks when times get hard - sometimes because they need to feed them. Sometimes because they want a drink/cigarettes.

Equally a parent who had initially put money into premium bonds might then think it's not gaining enough money so put it into a higher interest account.

Ethically I think there is a big difference between money gifted to your child by others and the amount you choose to save yourself.

So you can easily remove her money from Premium bonds and blow it on that handbag - if she's 3 what can she do about it?

There aren't rules about what to do with it.

If the DC win then I just invest it back into more Premium Bonds. If they won thousands or the million then would use to put an extension on the home which would benefit them all.

If one child won quite a lot (say £1000) then I would probably withdraw, divide it between the children and reinvest.

Put it in the stock market. Bonds are a dreadful - and not guaranteed - return.

As far as I know the adult has full control over the account and winnings. If he won and you've stated for the money to go into your account you could spend it on whatever you wanted. You are also able to cash in the bonds and use that money as you wish.

In terms of whether you should that all depends on circumstances and where the money has come from. Yes, it does appear to be a loophole for people to have access to more than one PB account.

Btw it's 16 not 18 that children gain control themselves of the account.

Of course you can withdraw it. DS account is linked to mine. I set it up and decided where the winnings go (invested back in premium bonds). But I could easily get them sent to a bank account or just close the whole account and withdraw the money (so long as I'm the adult which the accounted is connected to).

Morally, totally different question.

We used to put all of our winnings into a holiday fund which would benefit the whole family. I wouldn't feel comfortable sending it on myself, it would have to be something that benefited the child.

Seconding @fufulina on this one - my parents bought me a £10 premium bond when I was born and over 40 years later, my numbers have never come up so I've never won any money. Am very glad they didn't buy more bonds and elected to put my birthday money into guaranteed interest-paying savings accounts instead!

isn’t that like giving the adult two accounts? And a childless person can only have one? I don’t get it

If you view it as an account per member of a household do you get it?

Isn't this a question for yourself?

Are you comfortable taking your child's money or would you rather invest it for their future?

This is also our take on it. We have our DCs accounts set up to pay any winnings into our account and then I spilt it between them and buy more bonds for them. I'll do that until they are 18. Makes it fair if one of them was to have a big win.

This is the reason I got premium bonds in my daughters name. I have control if I decide the money should be invested elsewhere so am free to withdraw the money at any point.

The child's premium bonds belong to the child as do any winnings. As custodian you can move the money or reinvest it as you see fit, but it isn't your money so you can't spend it. Treating it as your money would be a way of getting round the 50K limit per person.

Further to OP's question what about things like claiming UC? Does your child's PBs get taken into account when declaring any capital/savings?