AIBU to keep my six-year-old's savings in my name?

[tnorfotkcab]

my dd is 6 and has savings of around £30 k though various donators - like she was given money when she was born, for early birthdays, because her cousin was given £1000 (for driving lessons), as nan and pops gave her the same (Wheatever they give one GV they give the other). etc but mostly me and DH putting into her savings.

All of this, except around £500 is in my name - all in separate accounts, some invested long term, some in premium bonds etc the £500 is in her name in her child bank account. The money from inheritance was actually

My reasoning is that, i don't want her to have immediate access to over £30K+ the day she turns 18. She will now about the savings, but my plan is to transfer to her when appropriate -e g she needs/wants it for house buying etc

or should it all be in her name?

It should all be in her name and in higher interest accounts for children. The current set up means you are likely to have to pay tax on it.

You don't have to give it to her aged 18. Open discussions around money work ime.

She won’t pay tax on the interest, I’d put it in her account. Put it in a long term savings account.

You do have to give it to her when she is 18 if it's in her name.

OP - it depends how much other savings you have and if having this £30k means you can't save as efficiently.

I am a big believer in children not having access to loads of money when they turn 18. I don’t think their brains are developed enough to make sensible decisions.

I would forgo the higher interest payments and keep it neatly somewhere in your name. I’d let them know at 18 that it exists. And then you can support them in how to use in. It will no doubt be easily £100k by that time and that’s just not money to be tasking a teenager with managing.

We have our children's money from us in my name but they also have money from grandparents in their name. I don't currently pay tax on savings as I'm not in employment. My eldest is 5 and have found that most of the best children's accounts are from 7+. Once they get older we will start moving it in their own names at a pace that's sensible for their age. I'm getting better interest rates on the money than the children's accounts currently so that is also a consideration.

Not so much on gifts, but I think you are in very murky legal territory if your motivation is to withhold inheritance from her post 18 unless there was stipulation in the will itself.

on the inheritance you also have a responsibility to make sure it works hard, by not putting it in a high interest/tax efficient vehicle you are failing there.

if you ever need benefits or UC these savings with put you over the threshold to claim. If on the other hand you have a chunk of savings it may not be tax efficient.

The money she inherited you must give her when she's 18 unless the terms of the will entitle you as trustee to hold it on trust for longer. (My will specifies that if I die before my kids are 25 then any sums they are entitled to under my will will be held in trust until they are 25.) Otherwise you can't just decide to keep it until you feel like it. Same with any monetary gifts from others unless given on the understanding of an implied trust. Sums that you have been saving for her yourself are different because you can be the trustee of those on your own terms.

I do agree that it's not a good idea for 18 year old to come into a lot of money suddenly but you need to keep on the right side of the law too.

You/she may be missing out of the benefits of child savings/investment accounts too.

Our DC savings were in their own high interest accounts with us named on the account. They were on my online banking app as I had an account in the same bank. They weren’t aware of the savings until around the time they started driving lessons. I controlled the money and gave 2 DC a few thousand for cars when they psssed their driving test. They bought cheap runarounds & taxed & insured them. They were both 19 at this point. A few months later I gave them the rest of their savings which they put in a LISA. DC 1 had no need of a car & used his to pay for postgrad study & some into a LISA. They are all fairly sensible & not the type to just party/fritter it away.

My DC have premium bonds in their names, but if at 16 they’re not sensible types I’ll move it out in to our accounts. We will spend the money only on them but it’s for house deposits, university, further study and maybe a bit for weddings etc, not frittering.

They know we save for them but don’t know how much. We don’t come from wealthy families, so if they blow it then it’s all gone for good; I can’t risk that.

Like the OP the money is mostly just birthday and Christmas money, plus money from us and a small amount I inherited which I passed straight on to them.

We started a pension for our DD. It is not actively managed as we don’t pay into it monthly. We just add a chunk when we can. We started her pension when she was 10. She also has a significant chunk in her savings but having the pension as well gave us a bit of comfort knowing that if she goes on a spending spree with her savings at least the pension is protected.

What you save for her us up to you. What others give her is a bit more ambiguous. Some people would not want to gift a child and have the parent put the money in their name, so if she has recieved considerable sums this way, a conversation should have been had with the giver.

Anything your DC was gifted should be in her own name as the gift was made to her. If you want to save for her too then you could keep that in your name. If she has inheritance I'd invest it for her in a stocks and shares ISA putting in max limits each tax year until it was all used up. At 18 DC will have a tidy sum. If you bring DC up well with good values they will want to use it sensibly. My DC had money from inheritance but all used it towards house deposit so no frittering it away. They knew that was what their dgp had intended it for them.

Sorry to clarify the inheritance was technically mine as dad died without a will. But we know his wishes were it went to the grandchildren.

It had to go through us first.

I put it all in her name in her child's bank account.... And have moved it for now into a ISA in mine

Well, no, technically I couldn't give it to her if it's in her name at 18, it's hers to take!

I just worry that it will get "wasted" like her cousins. He spent his inheritance (he was 19) and life savings going out and drinking.

You should put gifts into her account but you can save into your own account for her. An isa would avoid you paying tax on it and you could hand it over when you want.

Yanbu. Better to lose a few quid in tax under your name than she fritters it in her name.

Although if you ever have to move to universal credit it'll have to be loved to her name and you'll have to cross your fingers she doesn't waste it.

Definitely keep it in your name but separate. However well you teach them, you can't guarantee having 3ok at 18 won't go to their head. You could check with some of the givers of bigger amounts what they'd prefer maybe.