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.

IANAL, but it seems likely that you could set up a trust fund for your child. I believe that you could be a trustee, ie someone who says what that money could be paid for. But it would no longer be your money.

That would also ringfence the money were you to die - your child couldn't spend it all on drugs, or whatever. Obvs you would need at least one other trustee.

You need to see a suitable solicitor, I shouldn't think it's very complicated.

But it isn't OK to have savings in an account for your child then take that money away from them again because you want to spend it on something. Just because you think that's in their best interest isn't the point. It's either their money in which case you can't touch it or it's yours in which case you can't try to hide it away.

@Crikeyalmighty i suppose I think it’s different as the schools fees are clearly for my child and are of no benefit to me.

If the money is on trust for the child I suspect it wouldn't count for UC purposes, but you would want to check this. No judgment from me.

They are a benefit to you though. Alternatively spend the money and buy a house with good schools locally then you will have no capital, no need for fees and you can legitimately claim UC. But I suspect you're just on a fishing exercise.

Maybe I should set up a holiday fund to ensure that I can take my children on at least a couple of holidays abroad each year for say the next 13 years.

Seeing as holidays are a priority to us I wouldn't want this money to have to go on anything else.

You never know in life. I wouldn't like the thought of this money not going on the travel I had originally planned and have to use it for day to day stuff. Obviously I don't envisage ever needing UC, but on the off chance, I think it's unreasonable that my children may end up not having experienced the world just because I was responsible enough to save this money up front!!!😆

I don't think there is any legal way of doing this - you can look into the trust idea but it will be quite complicated. Not judging you at all as the system is unfair - millions of people on long term benefits that could be working while those that have paid tax their whole lives given no 'grace period' or short term access to UC if they lose their job if they have savings, so I can see why you want to do this. Hopefully if you lose your job you'd be able to find a new one relatively quickly so you don't have to deplete too much of your school fee savings but unfortunately if you find yourself in a position of needing to rely on UC long term, you won't be able to continue to send your DC to private school.

And they're clearly optional. It's like saying you want to ringfence your money to buy a Porsche to drive your kids around in and it's fine because it's beneficial to them.

Plenty of self-employed people had to spend all their savings during covid - money they'd saved for their kids' weddings, university, whatever it was.

You're asking how to commit benefit fraud.

In your opinion. What if you wanted to use it to send her on a year long holiday at 18? That would be for her benefit too. Or a deposit for a flat for her? No different.

@Freakydeak how are school fees a benefit to me….?

So you're currently employed, and have a preschool age child, and you're saving your income with the intention of private education once they reach school age, but you're concerned about losing your job and having to spend that money on living expenses as you'd be ineligible for UC?

I think you need to take a step back - if you lost your job in the next two years, you'd presumably look for another job, so even if you did need to use your savings to cover your living expenses, it would be for a short period of time, and wouldn't use all the money you have saved. Investigate income protection insurance, speak to a financial advisor to make sure the money you have saved is invested well, and try to get some perspective.

@DappledThings school fees and house deposit are of no benefit to me. A holiday would be. Surely that’s obvious.

If someone loses their job and has to claim benefits those benefits are there quite rightly to enable them to live. I sincerely hope there's no legal way for you to squirrel money away to fund the luxury of private education and claim from the state to live.

Either pay the fees upfront (risky, as the school might go under and you lose your fees). Also what if you need to move for work, or fall out with the school. Or set up a trust in your child's name that is only to be spent on education. That would make it your child's money - so whatever happened, you could never spend it on yourself. You should see a lawyer about that though.

If your financial circumstances change for the worse, you will have to change your spending plans, like anyone else.

@MotherWol yes that’s true. I guess as a single parent there’s always that extra worry

The OP didn't say that. She wants to ring-fence money set aside for her child, her money.

Op, there must be a way. I will google and see what I can find out but you can do the same and ask around. Somebody else on here may have the answer.

How do Trust Funds work?

Obviously, we all hope you don't face unemployment but it doesn't hurt to be prepared.

Good luck.

@LewishamMumNow thanks, it seems a trust fund is the way forward as I’m not keen on handing it all to the school

They're a benefit to you because they're a luxury you want your child to have. Fine as long as you don't expect the state to fund you at the same time.

@LBFseBrom thank you. I anticipated some nasty comments on the thread so I was prepared but all I am trying to do is the best for my child and have absolutely no intention of sitting back on UC, I would hate that.

Yep.

@ilovesooty a benefit to me would be spending 200k however I please. Not handing it to a school that I do not attend.

@sorrythetruthhurts indeed- I don't mean to sound harsh but I know people who lost all their savings and some their businesses during lockdown and had to claim for the first time ever in their 50s - several had to sell their houses - so I get really annoyed when people try and play the system - private school isa choice - it's not compulsory nor a necessity in the vast majority of cases -

Not if it's a holiday just for her as i wrote. And now you do want to retain it maybe for a deposit on property too? How about a car?

The benefit comes from the taxpayer supporting you with UC whilst you spend money you should have been using to support yourself on school fees.

Effectively- taxpayer subsidising your school fees.