To ask how I can successfully ringfence this money? (Please don’t post for moral judgement)

[Jaalp]

I am a single parent to a 3 year old who will start school in the next two years. I have saved up a significant amount of money for schools fees. As a single parent I am constantly worried about job loss or anything else that could affect things. I am aware that if for some reason I was made redundant, for example, if I have more than a certain amount in savings then I would be expected to use this before claiming universal credit etc.

I have no intention of claiming universal credit but life happens and I have to be conscious of the potential things that could happen.

My question is, is there any way to put this money in an account for my child that would be protected as theirs and not counted in an assessment for universal credit etc should that ever happen?

Please don’t make this is a private school bashing thread or about playing the system etc. I’ve worked hard all my life and intend to continue to do so. Thanks.

Two suggestions here, I haven't RT (whole) FT so this may already have been mentioned.

Likely the easiest course is to take out accident, sickness and unemployment (ASU) insurance. This will pay out up to 70% of your income for up to 12 months if you are made redundant.

Alternatively, specific child savings accounts are disregarded for Universal Credit purposes. Since children can't open a bank account, a child's savings account is a trust where the child is the beneficiary and the parent is the trustee.

It is important to make sure that you open a specific child savings account as this will be a trust.

See this guidance from the DWP in a pdf:

ADM Chapter H1: Capital (publishing.service.gov.uk)

Ownership of capital of a child or young person

H1077 Capital owned either legally or beneficially by a dependent child or qualifying young person is not to be included in the capital of the claimant. However, the DM may still need to make enquiries about such capital if it appears to be owned by the claimant but is actually beneficially owned by a child or young person for whom they are responsible.

H1078 Children and young people may not be the legal owners of the capital of which they are the beneficial owners. This is because businesses, such as banks, will not enter into a contract with them. If they are the beneficial owners and not the legal owners their capital will be held on trust by another person.

However, Universal Credit Decision Makers (DMs) will look at the overall situation to see if you have done anything that may be described as "deprivation of capital".

If, all of a sudden, you open a child savings account just as you are made redundant and transfer all your savings into it then they will likely count that as deprivation.

In contrast, if you were to open a child savings account today and regularly pay money in to the account each year then, if you did go onto Universal Credit in a few year times, and you paid a similar amount into your child's savings account at that time then you have not changed your regular behaviour so it would be difficult for them to prove that it was done for the purpose of claiming benefits.

But any money that goes into the child's savings account is held on trust for the child. If you wish to take money from the account then it must be used for the benefit of the child. This can certainly included things like paying for private education.

A trust fund for your child, with you as trustee. It’s actually quite straightforward to establish, but do use a solicitor with experience in trusts.

You would be playing the system though. You can’t just tell people to not tell you the things you don’t want to hear. Why should you get to claim Universal Credit when you’ve got thousands of pounds available? Make sure you keep your job and you’ll be fine 🤷‍♀️

Imagine a poor woman saying let me stay and claim UC to look after my child and save the government paying out the 30 hours funding. Oh yeah only the wealthy can do that.

I think that you misunderstand the situation. The money would be in an account in the child's name (not the OP's) and that is specifically disregarded when it comes to UC

If you get into a situation where you need and qualify for UC your main priority will be putting food on the table and keeping a roof over your head. Private school won't even make it onto your priorities list.

OP, I haven't read the full thread - I've read your posts and got about half way through the others.

I don't agree with what you are thinking about doing - I don't agree with private school - but I do get that anxiety as a single parent. Everything is on you and it can feel quite overwhelming.

That anxiety does lessen as your children get older. When they are small you feel very responsible. As they get more independent, and as you overcome challenges, you will probably start to feel less anxious.

As far as I can see, you aren't planning on claiming UC, you're catastrophising - what if something terrible happens? - and trying to problem-solve it. Actually, if you lost your job, you'd have enough money saved that you'd live off it and pay school feels for a while, and then find another job and make the savings back up. Or you'd come up with another plan. If you've managed to save enough money from working while also being a single parent, you are clearly resourceful.

I suspect she has never struggled so it wouldn't be top of her list.

Because they have the assets to manage.

Neither a poor nor ‘wealthy’ woman would be supported to remain voluntarily unemployed whilst claiming benefits. They would be expected to fund that choice themselves.

But if you have a mortgage, universal credit isn't really going to be useful to you anyway - you won't get any help with your mortgage, so you'd have a choice in those circumstances between not having the ability to pay your own mortgage and having the money to send your child to private school. So actually in those circumstances you might end up really wishing you hadn't ring fenced the cash, because while I understand your desire to prioritise education, if you had done that you then might be in a position where you could lose your home - and surely you'd rather your child was in a state school than lost their home?

I think you'd be better off taking out some whopping critical illness cover and income protection insurance.

How depressing.

A children's premium bonds account is an easy option, depending on the amount you want to save

@IhateSPSS overpaying your mortgage so you clear it, then potentially later having to claim UC is exactly what I am doing with wanting to save the extra money I have for my child’s education. You presumably don’t want to see that as what I’m doing is a sacrifice for my child, what you are doing is purely to better your overall prospects (which your dc may also benefit from down the line, but not exclusively).

Again I ask why not state?

OP your post says "I'm considerably wealthier than most of you reading this because of my high income. Should I lose that income, I'm unwilling to give up my rich person trappings. How can I hide my money from you, the taxpayer, so that if I lose that income the taxpayer will continue to pay for my luxury of choice. Please tell me how to cheat the system like this, but absolutely no comments on my morals."

Yup! Morals of an alley cat some people have… people with money tend to protect it…

I'm sure you've never paid anyone cash in had to avoid being charged VAT, right?

That would be illegal lol

Lol, it’s hardly cheating the system when she’s using the rules of the system. She can do this perfectly legally, regardless of your distaste.

I somehow managed to miss this update earlier but this is without a shadow of a doubt the most galling and grandiose statement I have ever read in my life. Millions of single parents scrape the bottom of the barrel every month, some without two pennies to rub together or often going without the ability to pay essential bills and not knowing where their next meal is coming from and you sit there and have the audacity to say that with 200k in your bank?! People like you are why the country is on its knees trying to create a contingency plan to fleece the tax payer if needed as if you’re entitled to their money and they’re all peasants. Try raising a child on your own, on a minimum wage, zero hour contract without any luxury of a nest egg. This has to either be fake or you are the definition of the term narcissist.

Took the words from my brain!!

im asking if there is a way to protect my child’s school fees. It’s not playing the system, I have no intention of using the system at all. I hope to never have to. that in itself is fine, so an isa or bond might work except the reasoning is to hide it as saving for uc. It is unlikely paying fees in advance, especially when dc has yet to start, is feasible and you will not avoid a vat increase by doing so,

No you can't and that's absolutely as it should be. It's not up to people like me to fund this.

Can't you just open a bank account in the child's name? I opened savers accounts for both my kids the month that they were born. Would the DWP take that into consideration if an application for UC was made in your name?

There is a way to protect the school fees money, OP. That way is not going on Universal Credit.
It's not like UC is automatically applied if you lose your job and they force you to spend your savings. Instead, you can get another job, make cutbacks, move to a smaller house. Or you can preplan by having income protection insurance or critical illness insurance or both or overpaying your mortgage so your future costs will be lower. You can release equity, take a lodger. Send your child to live with family and become street homeless.

You can protect the fees money above all else if that's what you really want to do - you just can't protect the fees money while claiming a benefit that does not allow savings over £16,000. So if it comes to it, find another way.