Premium bonds - is this really dodgy?

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Ok so I think this is really dodgy but Dh is adamant that we can use our child's premium bond account to store money until we need it
Doesn't sit right with me

For what purpose?

Why not use your own premium bonds account?

For somewhere to keep money until we want to spend it ( when our premium bonds accounts are maxed out)
Actually sounds illegal to me

What's dodgy about it? I did that with my DC until they were 18. At that point it was a good return-the monthly prizes much better than the interest available on deposit. The Gordon Brown reduced the prize rate so it was less attractive.

Technically it would be a gift to them, but unless you are trying to avoid tax on that amount I don’t see it as dodgy as such. Maybe a bit of a grey area? The fact you are using their account rather than one of your own is the dodgy bit.

X post with your accounts being at the limit.

I don't think it's illegal. We have some money in our Ds's savings account as it still has a fairly good interest rate.

Why do you think it might be dodgy? If you were using a child's account to hide your savings from any declaration of savings when applying for means tested benefit or from ill gotten gains then yes dodgy. But if you're not why is it dodgy.

In all honesty I was planning on drawing it all out before child is 16 anyway and putting it somewhere else . As once they reach 16 I can't touch it anymore . Then planned on giving it to them when they were old enough to use it wisely. As what if child is totally wreckless with money and I change my mind and it was stuck in their premium bond account

Perhaps it isn't dodgy . The money wouldn't be in there very long. Maybe only 6 months

If you were to move money to a child so that you as an adult could claim Universal Credit, then I expect it would be seen as a Deprivation of Capital.

If you were doing it to avoid Capital Gains Tax due to being a higher rate tax payer, then that might be an issue.

If you are just giving your child a gift. Then deciding later on to take it back again, I don't think that is a problem... morally may not be right but legally it's family money and you will be most likely using the money for a purpose from which the child benefits - such as them being fed.

Ok . It's not to avoid tax or to fiddle benefits .
It's money to buy a new family home which will be coming from inheritance (under tax threshold)

I use my DC's premium bond accounts to store two years' school fees for them. The basis for this is that I earn no interest anyway, it will be spent on them and if I put it into their bank account I would still have to declare the interest on my tax return (prizes are tax free) - makes my life easier.

People do this all the time

Can’t see why it would be dodgy then. I store excess savings in my Premium Bonds because it’s easy and although the odds are incredibly low it might give me a big win while it’s there. Already given me a few small wins that are at least equal to the woeful savings rate.

Just open your own PB account? Takes minutes.

Oh I see, they're maxed out.

I don't see any issues - you're not actually giving them the money, it's just storing it for something else. It's not like you are giving it as a gift and then taking it back.

It isn't dodgy if it's just a place to store money and you're not trying to hide assets as others have said.

When interest rates were better we stored a lump sum in our child's savings account and split the interest with them. If I put my money in a child's premium bonds account I think I'd feel we had to split any winnings with them from a moral standpoint.

Are you talking about National Savings premium bonds? Your terminology is confusing, it's not like each person has an account sitting waiting to be used, you don't store money.

As the maximum investment is £50k and you say yours will be maxed out your seriously need some proper advice from someone who has all your information.

Well, technically, if you give or put money in your children's bank account the first £100 of interest is tax free - the rest is taxable at the parents' marginal tax rate. That's why we use premium bonds.

Well, technically, if you give or put money in your children's bank account the first £100 of interest is tax free - the rest is taxable at the parents' marginal tax rate. That's why we use premium bonds.

That’s not correct. If the annual interest is more than £100, all of it (including the £100) is taxable as if it were the parent’s.

Premium Bonds are a perfectly legitimate way to park your money. How many children earn their own money to save £50k - of course it comes from the parents.