Inheritance for (very) young adults

[starsorwater]

My dcs (Over 18 but not yet reached the stage of reason) are due to inherit a sum of between 5K and 10K from gps. The money actually comes to me and dh, but we were asked to split it between dcs and of course we will. Don't want it in our accounts- it's not ours in any sense but name. How can we put it in their names for 5 years time? And could this possibly be done without them knowing? Can you buy bonds? Shares? Gold?
If they have it now it will vanish on bits and pieces and booze and parties. In a few years it might be really useful. Please, any advice?

Jng1 No, haven't paid into our ISAs for years, you are right, that's where it should go for the time being.

denver I have often heard that repaying student loans with a lump sum is not really sensible- better to use for a house deposit or something like that. I don't know if that's true. I just thought I'd mention it and you could check it out.

stars - the general thinking is it is not worth using a lump sum to pay for uni unless the student also has additional means to pay for a house deposit. So if there is enough to pay for uni and a deposit, fine, but otherwise saving the money for a deposit seems wise, else the deposit can take years to build.

The repayments on loans are 9% of salary above 21k, which could change I know, but is basically equal to about £70/month on a salary of 30k.

Say the child uses the lump sum for uni, so has no debts. S/he will be better off by £810/yr with no loan repayments on the above salary. But even if that is put straight into a deposit fund, how many years will it then take to build up a decent deposit? 10+ yrs for 10k, assuming no other spare money.

Given that a mortgage is generally cheaper than renting, esp with a decent deposit, it seems a no brainer for the lump sum to be used for a deposit and the loan to be repaid.

This is the stance we are taking with our DC and their inheritences, I would rather see them settled in their own homes at a young age, rather than renting for years. Even if it does mean they also have student loans to pay off.

Obviously if the terms of student loans change considerably, we may re-consider that stance, or help them reduce them with our own money.

There are many that dont agree with this stance, the HE forum is full of people saying don't take loans out under sny circumstances. But I think most of those must be rich enough to cover the uni costs and provide a house deposit (or DC have latter already).

Our mortgage is more or less paid off - if DC1 was starting uni this year, I would seriously consider increasing our mortgage at the low rates available now and provide him with a low interest parental loan which would be far more favourable than the student Ioan interest rate he would be subject to. Yes, this may not be attractive to many or even an option but it's a significantly cheaper finance option. He can use his funds for a house deposit for his 2nd year (assuming he's studying somewhere not completely extortionate) and rent the spare room/s out. I know a few people on 'normal' household incomes who have done this for their DC in affordable, northern cities. Another alternative could be liberating some pension funds to benefit your DC this way if you were of the right age. Food for thought anyway!