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Original poster

5 figure sum

13 replies

Littlehomebird · 11/04/2015 15:44

D's will come into a 5 figure sum in a few weeks on his 18 th birthday. He knows it's coming but is not interested in being able to access it as he doesn't need it because he's still at home with us. What should he do with it? Where's the best place for it?

OP posts:
purplemurple1 · 11/04/2015 20:55

When will he need it and what level of risk is he willing to take?

JeanSeberg · 11/04/2015 20:56

Nearer to 10k or 99k?

Original poster
Littlehomebird · 12/04/2015 16:03

It's more than 10 but less than 20. He starts uni course in sept but is able to carry on living here with us. I don't imagine he'll need to access it until he thinks about buying his own property or gets married which is several years away. Obviously we'd like it to do a bit of work before he ever needs to use it. Perhaps it could be used as a deposit in the future. Any advice appreciated.

OP posts:
Sunseed · 12/04/2015 16:10

He can park up to £15k in a NISA where it may benefit from tax efficient investment growth. As above, think about timescale and attitude to risk/capacity for loss when considering what underlying investments to choose, also his tax status.

Original poster
Littlehomebird · 12/04/2015 16:19

He has an isa with around £3k in it so he might want to top that up to £15k, I wasn't sure how much one could have in an Isa. He has mentioned gifting some (don't know how much to his younger sister 16)She should definitely have no access at the moment or it would be gone in a flash.

OP posts:
Crossfitmyarse · 12/04/2015 16:24

He can set up a Santander 123 account (think that's what it's called) where providing you move money back and forth regularly from another account (can set up a direct debit for this) the interest paid out is waaaay above anything he'll get anywhere else.

You could set up an account for his sister as well (just tell her she's not legally entitled to touch the money until she's 21 and she'll believe you) he could earn her some interest as well but make sure she cannot access the money until it's appropriate.

JeanSeberg · 12/04/2015 16:25

The limit is £15,240 (when he's 18).

This is one of the best at the moment:

www.coventrybuildingsociety.co.uk/savings-accounts/cash-isa.aspx

However, Santander pays 3% interest on balances up to £20,000 if he can be trusted not to spend it.

Personally I would do ISA and rest in Santander.

senua · 12/04/2015 16:30

The ISA figure people are mentioning is how much you can put in per tax year so he can put in £15,240 now (in addition to the £3K already there) and the balance next year - if he wants to.

Original poster
Littlehomebird · 12/04/2015 16:40

He can be trusted not to spend it, he's not terribly interested in it at the moment. (Sad story).

OP posts:
JeanSeberg · 12/04/2015 16:53

Def Santander then.

Original poster
Littlehomebird · 12/04/2015 17:28

Thank you.

OP posts:
SecretSquirrels · 12/04/2015 17:56

ISAs may be tax free but the interest is rubbish.
The Santander 123 is the best around for up to £20k but you do have to jump through some hoops.

FWIW I set one up last week over the phone it took hours much better than going into branch.

specialsubject · 12/04/2015 18:34

perhaps use some of it to start a pension; obviously that means locking it up until he is 55 but it has a long time to grow.

with savings rates so bad, it is very difficult to stay ahead of real inflation. Stock market also high so perhaps wait until the post election crash. Meantime Santander 123 as mentioned.

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