Told I can’t use this premium bonds money for our house deposit as it’s illegal?

[kiav]

We have two premium bonds accounts. One is in my name and one is in DD’s name. We have 50k in mine and 30k in DD’s.

we are now in a position to buy a home. We will need the 50k for a deposit and we also need the 30k for things like stamp duty, new sofa, to do a small bit of work that needs doing in the downstairs etc.

I have been told by a friend it’s illegal to use Dd’s 30k for this? This is money we have saved from our income but now our circumstances have changed we need it. Surely premium bonds should tell you this before you invest??

I can't believe this is still going.

You can object morally all you want, but the way PB has been set up allows a parent full control of the account and that includes withdrawing the money to their own account with no further oversight or restrictions of where it goes. You aren't asked why, you aren't asked to show it's going into another account of your child's, you can withdraw it to your own account in seconds and that's that 🤷‍♀️ I've withdrawn money which I have put into their JISAs but I could equally have kept it in my own account and that would be that.

You can put all the hypothetical scenarios you like into the mix about children suing their parents or whatever, but it was OP's money she put in, not that of a third party, and it is being withdrawn for family expenses after buying a house. There's no feasible ramifications, so it's a purely moral and ethical discussion.

This.

Ffs another daft comment who probably doesn’t have a child with premium bonds under 16.

it’s a bloody option that you can choose within the system 😩

Perhaps you can’t spend it on whatever you want legally (I wouldn’t know), but morally I think they can do whatever they want with it because it was THEIR money. I can save money for my daughter and change my mind about giving it to her — and if it meant the difference between me buying a house or not, I’d have no compunction about doing so.

edited to correct a typo!

OP your only mistake was coming on MN and exposing your family finances to the world.

Just do what you need to do and stop posting about it on the internet!

Pretty sure her daughter will benefit from a secure roof over her head 👍
Only a fool would insist on leaving a load of money in a 5 year olds name rather than using it on something that will enormously benefit the whole family.

This! A million times this…

As this practice is pretty commonplace, I'd be interested to see any legal cases that have come from a parent withdrawing a child's PB many years before they are due to be solely responsible.

It's quite common for parents to cash them in before a child reaches 16 to control access to it for university, etc. and give it back to them in instalments to pay for accommodation, fees etc. as I can't think many parents would want their child having free access to up to £50k when they reach 16. And this is the issue with JISAs. Fine if you have a sensible teenager, but some teenagers given free access to tens of thousands of pounds will blow it. Personally I have enough in their JISAs to give my two a good start at uni but I won't be putting house deposit money or anything like that into an account they can withdraw at 18 as I think that's incredibly risky. And if they do blow the JISAs money, it's not unrecoverable from as I will have money for later life, assuming they change their ways!

This. The fact is as her parents they are trusted to determine the best use of the childs money. I think people are being ridiculous if they don't think the child will benefit from the way her parents intend to spend the money.

I’m pretty sure all the nay sayers don’t even have the type of money you have, whereby you have maxed out your NS and I account by £50k and have money spare to potentially max your child’s account….. because I’m sure if they did they would be doing the same 😜

I can't see anyone answering this. There isn't a 'law' that says this. A lot of English law, particularly in this area isn't codified - it's based on court judgements, often centuries old! Here here will be a bare trust with the 'responsible person' names when the account was opened as the trustee. There is statute around trusts but it's doesn't cover this really (because it's really not a point that is in dispute).

If you need law then @Bettergetthebunker has referenced law that isn't trust law but creates similar obligations on the parent as a trust would. I defer to her on that as it's not my area.

@Bettergetthebunker and I disagree on whether spending on this would be considered to be in the child's benefit. There is debate - particularly on the furniture and if the renovations are cosmetic. In reality it would turn on the facts of the case and we don't know enough. That said, it seems very unlikely this would ever be argued either way - someone would have to actually raise a claim for the money. Not impossible the child might decide to do that later, but honestly the more likely issue is they find out later in life and are upset.

I was a mortgage underwriter for years. You won’t be able to use it as you can’t use funds from an account of someone under 18 for a deposit. You could try transferring the money into your bank account, but usually any transactions over £10000 within a year are investigated as the lender will want to see the audit trail and the source. Could probably get away with it if you transfer now and then buy a house in a year.

Whereas the 18yr old who comes into it will probably blow it on a gap year 🤣

For those who are not quite compos mentis and think it’s fraud that you can withdraw from your child’s premium bonds and that the winnings are paid into the parents accounts. I attached the following screen shots.

One of the most ridiculous things I've read. Yes the op should feel guilt ridden at providing her child with a secure home 🙄fgs some people on here.

Maybe I've missed it, but has anyone said it's fraud to withdraw the money? The OP is absolutely entitled to withdraw the money. The (potential) fraud was depositing it IF (and it hasn't been confirmed) the OP never actually gifted it to her child and it was just done to get around the 50k cap.

Yes, because the parents are the trustees and are trusted to make some decisions about what is in the child's best interests to spend the money on. To purchase a house for her parents would not cut it. If the child was going to get a share of ownership in the house it would be a different matter.

Yes I just highlighted a quote where someone said it was fraud that the winnings/prizes of the child’s premium bonds were going into the parents account was fraud.

my god what is wrong with everyone

Isn’t it subjective on what the money is spent on that benefits the child.

so if you spent their winnings on clothes for them vs a roof over their head?

Ignore the jealous types on here.
We regularly move money in and out of our child's account. We're not blowing the money on stupid things, and making a mental note of how much we've 'borrowed.' It's all come from us anyway. If you were going to spend the money on cocaine fair enough, but on a mortgage that will benefit your child- sounds sensible. Not only will your child benefit from it whilst you are alive, but in the many decades' time when you die, you will have more to leave your child as houses increase in value much more than cash in the bank.
As others have said, just get it into your account/name in good time ready for the purchase. My parents gifted us some cash and the solicitor said it would take longer/cost a little more if my parents paid the solicitor directly, so they paid it to us and we then paid solicitor.

Ah ok. That's obviously bullshit!

I’m baffled that you think you can take money from someone else’s account. Why did you put it in her name in the first place?

Why did you put it in her name if you wanted to be able to take it back?

It's hardly Jim from IT's account though is it, when it's your own small child it's different.

Yes to a degree there are different interpretations of benefiting the child. But that does not mean the parents have complete latitude as to what they consider beneificial - ultimately a court would give a determinative interpretation if challenged. E.g. I couldn't spend my children's money on wine for me on the pretext that wine makes me happy and they benefit from happy parents.

In this case the OP intends to spend the child's money* on the parents' tax liabilty (stamp duty) and a sofa etc. It is diffcult to see that cutting the mustard.

*There has been some discussion on the thread as to whether it is the child's money given it came from parental savings. The transfer of money to a minor child is usually regarded as a gift to them under the presumption of advancement, unless the contrary can be proven.