Kids savings

[thefunnybones]

So I'm saving up for my kids futures as my parents done with me. I have 2 kids. One has about 2k in there and one has about 1.5k. My dilemma is I'm on UC. I work and so does hubby but we still get help as renting and wages aren't massively high

I don't want to put their savings in an account they can access at 18 as I blew all mine at 18 and my husband was equally useless with money.. I feel 18 is too young for lots of adults to have large sums of money. So I currently have it in my bank under accounts in my name but then with UC anything over 6k u have to declare

But this money isn't for me to spend it's for kids but no way I could prove this to UC

Any ideas? Is there an account to access when 21 instead? I'm with natwest if that helps

Premium bonds in the kids names. You can still access the money until a certain age, can't remember if it's 16 or 18, so just before they reach that age you can withdraw all the money into your own account for them so they don't have free access to it. And set it up so that any winnings are automatically reinvested in more bonds

I'm sure UC asks about premium bonds as well

1. Long term savings - Start a low cost pension in your name or your husband's (or both have one) and invest. You can access it for them when you reach 57. Pension contributions are 100% disregard for UC.
2. Very long term savings....Start pensions in their name and show them how to add to it as they start to earn and learn about investing.
3. Buy gold sovereign coins as gifts, to build a collection for them. They will have a resale value.

...more about pensions in your own name....

It will be topped up by the government 20% tax relief.

In most cases the amount you contribute to a pension is disregarded as income by UC, so you may well find that the amount you can claim will increase.

I'm not really clued up on pensions and bonds and would rather use a bank account but I was hoping there would be one they could access a bit later in life. Or maybe I take it out just before they turn 18

My kids have money in their names which they would technically have access to at 18. But, if they don’t know about it, how would they spend it?
By that, I mean that I’ve not told them about it and they don’t have access to it - with an online account how would they ever know?

@blametheparents I guess I thought they would receive a letter in the post about it age 18 telling them it's now accessible? I think I'll go to the bank at some point and have a chat with them

You'll have to put it into their names. Like you say the UC have no idea what you're going to spend it on. There's also the argument that if you can afford to save for them to the extent they would stop your benefits then perhaps you don't need the benefits.

@duckpancakes ok so if I put it into their names can I withdraw it just before they turn 18? To stop them spending it

It will depend on the account - ns&I premium bonds yes. Junior isa - no

@thefunnybones - I’d hide / lose the letter!
What they don’t know about, they can’t spend!

This would be very unwise - what if the OP's children needed to claim UC themselves at 18 and had to declare their savings?

OP - it would be up to a UC decision maker as to whether children's savings are counted as part of your own savings.They will look for patterns of contributions to the savings to see if it appears you have moved capital to lower your the amount you hold in your name.

Well, of course if that was the situ then I’d tell them! I wouldn’t let them commit fraud!

Firstly - there's no guarantee this strategy would work in terms of protecting the OP's level of UC entitlement. It's at the discretion of a decision maker

Secondly - the DC could well make a UC claim past 18 and not disclose this to their parent, particularly if it was not obvious - such as supplementing a low or irregular seasonal wage.

Thirdly - DC might accrue savings themselves and cross their personal savings allowance for tax purposes without realising it, if there are secret funds.

Fourthly - banks will update HMRC on interest on savings in the DC names, and this could become apparent on the DC own records.

Too many things could scupper the benefit of the savings with this approach.

I'm pretty sure that savings in kids names are disregarded by UC

Ok so I've googled and junior isa are ok for UC as they can't be touched. Looks like a good approach

You won't be able to access the money unless your child is diagnosed with a terminal illness. But yes this is the way to go as its basically your children's money.

@thefunnybones 'I don't want to put their savings in an account they can access at 18 as I blew all mine at 18 and my husband was equally useless with money.. I feel 18 is too young for lots of adults to have large sums of money.'

Unfortunately, this is exactly what they can do at 18 with a Junior ISA in their names!

Premium Bonds transfer to the child at 16 not 18. And they'll do it without writing to you!

Yes but that's what OP wants isn't it? I don't think you can put something in someone else's name then get it all put before they can access it? Can you?

The OP says she doesn't want her DC to have access to any accounts at 18 in case they blow it all (as she did at that age). Unfortunately, a Junior ISA will not prevent this happening.
It is the main reason that many savvy and cautious parents don't use it as a savings vehicle.

Don't put it in Premium Bonds OP. The chances of your children winning anything significant are very low. That's a lot of interest that they could lose in that time.
You could put it in a junior ISA and when they are older strongly encourage them to put the savings into a LISA.

But they will access it at 18 in junior isa?

Did you think about why you spent money at 18 and ask dh why he did?. Where you educated about money? Did you have other income at the time?

Why not look at investing for them in stocks and shares junior isa?

Or spilt it, one for cash junior isa they can spend at 18 and bigger savings in junior stocks and shares?

Ok thanks for all advice but as stated previously I'm going to go and have a chat with my bank soon

OP - I just thought I should draw your attention to this scheme that you may not have heard of. https://www.moneysavingexpert.com/savings/help-to-save/#:~:text=The%20Help%20to%20Save%20scheme,here%27s%20how%20the%20account%20works.