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Original poster

What to do with money saved by my DM for her grand children (now young adults)?

33 replies

LindorDoubleChoc · 14/10/2023 19:38

My DM has been incredibly kind and generous and saved about £14,000 for each of her two grand children (both my children). They are her onlies and she won't have any more.

She's been putting money away since they were born.

They are both now over 18 and so the money is theirs. But I worry if I just transfer it to their bank accounts it will get frittered away. Atm neither of them need £14,000. One has just this month started Uni and me and DH are supporting him with rent, one is working abroad and earning enough to pay rent and live reasonably comfortably.

So - with their agreement - it would be great to save this towards something meaningful, possibly a property deposit. If they agree, where can we put this money for maximum benefit over maybe 3 to 5 years?

And also, would you want to do something similar with this nest egg for them or would you just let them have it with no restrictions? Given their circumstances?

OP posts:
flutterby1 · 14/10/2023 19:42

I think the most sensible thing is a house deposit, they may not see this as very exciting now but as they grow older they will be super grateful for this, why not 12 k into a house deposit and give them 2k for travelling. That's what I'd do.

CaptainMyCaptain · 14/10/2023 19:43

Its theirs you have to give it to them. Talk to them about using it sensibly.

RedHelenB · 14/10/2023 19:45

CaptainMyCaptain · 14/10/2023 19:43

Its theirs you have to give it to them. Talk to them about using it sensibly.

This Mine haven't frittered any money they've been given away.

Frodedendron · 14/10/2023 19:51

I think you're being a bit presumptuous - there's a big space between frittering it away and putting it towards a house deposit. I inherited a similar amount at that age and used some towards a Masters and the rest on traveling the world, one of the best experiences of my life and one that always makes me think of my grandmother when I remember it. Maybe your kids aren't interested in that specifically but it's their money and telling them it ought to go towards a house deposit is not your place imo.

SisterMichaelsHabit · 14/10/2023 19:52

CaptainMyCaptain · 14/10/2023 19:43

Its theirs you have to give it to them. Talk to them about using it sensibly.

This. It's not your money to decide what to do with and unless you're a proper Financial Advisor (who wouldn't be getting investment advice off MN hopefully) you shouldn't be giving them advice on where to invest it.

theduchessofspork · 14/10/2023 19:53

Research sensible ways of putting it away and put it to them. Ideally something that takes 3 months to get out.

Alstroemeria123 · 14/10/2023 19:56

If they definitely want to use it for a house deposit look at moving the money into a LISA over a few years (max you can put in is £4,000 per year), as they’d get an extra 25% on anything saved.

CarpetLady · 14/10/2023 19:58

If they want to save for deposits, I’d get them to open a LIsA. Put the money into a high interest account then move £4k across a year.

Myhusbandearns150k · 14/10/2023 19:59

Have a discussion. Maybe they could have some to buy a nice big treat and then save the rest.

You know they’ll regret it when they’re older if they waste it.

Moveoverdarlin · 14/10/2023 19:59

I wouldn’t let them have it. I would say ‘when it’s time to buy a house, Gran has put aside a bit of money for you. It’s about 10k’. I wouldn’t let them think there was an option to dip in to it for anything but a first house.

Definitely invest it in an ISA though, if one is only at uni , buying a house could be 10 years off and 14k could be as much as 20k by then if you are savvy.

GoodVibesHere · 14/10/2023 20:04

Moveoverdarlin · 14/10/2023 19:59

I wouldn’t let them have it. I would say ‘when it’s time to buy a house, Gran has put aside a bit of money for you. It’s about 10k’. I wouldn’t let them think there was an option to dip in to it for anything but a first house.

Definitely invest it in an ISA though, if one is only at uni , buying a house could be 10 years off and 14k could be as much as 20k by then if you are savvy.

I agree with this, personally.

tkwal · 14/10/2023 20:08

I would suggest you set up a trust for them until they are 25. Find a reputable financial advisor and discuss it with them. I wouldn't suggest a bank as they only provide their "in house" products

Icequeen01 · 14/10/2023 20:20

My DS inherited money from my father when he was 14. We locked it in an account until he was 18. When he was 18 he put a deposit down on a flat which he rents out (and he has been,icky enough to have a fab tenant for the last 5 years). He used this money whilst at Uni. We had to go on the mortgage but had a legal document drawn up to say we had no claim to his flat.

kweeble · 14/10/2023 20:51

Let them have it as it’s their money - you can advise but it’s not your decision.

CMOTDibbler · 14/10/2023 20:56

I'd put it into a LISA each over 4 years to get the extra 25% as you won't get anything better as a return, and it is pretty locked away until they buy a property.

silvertoil · 14/10/2023 21:07

Then being 18 is irrelevant (you're still financially supporting the one at uni.) When they need it (for a house deposit or similar), it's theirs. I don't think you need to arbitrarily give it to them now when they've no need for a lump sum of money.

VineRipened · 14/10/2023 21:16

Are they sensible?

I would talk to them about how they would like to make their DGM’s generosity work best for them, and look at the best savings / ISA / LISA deals on MoneySavingExpert.

ZekeZeke · 14/10/2023 21:28

Talk to them.
It's their money.
If they are sensible they will listen to your advice.
I saved for my two adult teens. One used his lump sum to travel to Canada for 3 months. He had an amazing adventure and is delighted he went.

Other hasn't touched his money.

Lifeinlists · 14/10/2023 21:30

If she's still alive it's between your DM and her grandchildren. If not then it's up to them how they use it.
You can have a conversation with them and give advice but you can't control money that's not yours. Or is your DM giving the money to you to distribute?

StormzyintheSW · 14/10/2023 21:33

DH and I wasted our inheritances (all our grandparents died in our first 2 years of Uni!)

We mainly bought clothes, shoes, music, pizza and beer...
And festival tickets. Random flights to random places but not cultural holidays...

We're saving for DC and they get their money at aged 24! 😂

ZekeZeke · 14/10/2023 21:33

Where does the money currently sit? In your mums bank account or in accounts in the adult children's names?

Mari9999 · 15/10/2023 14:40

@LindorDoubleChoc
What was grandma's intended purpose in saving the money? You are essentially trying to make decisions about money that belongs to adults. It is their right to be as wasteful or prudent as they choose to be.

You should give them their money or at a minimum have a discussion about when they would like to receive it. It sounds as though grandma is still living, perhaps she might have some input.

LuisVitton · 15/10/2023 14:45

If you look at money saving expert there is 6% on savings accounts -I make that another £840 a year. If the account is not easy access they are less likely to fritter it.

skyeisthelimit · 15/10/2023 15:02

You need to talk to an IFA for investment advice, but people can give you ideas/suggestions on here. You should talk to both DC sensibly about it and help them to research options, so that they feel involved, but at the end of the day it is their money. I can understand though that it would be awful if they just wasted it all.

They could put it into Premium Bonds. I have a similar amount invested and usually win £100 a month. This is obviously not guaranteed and they could win nothing! Interest rates are good now as well and they could earn guaranteed interest on it every year.

Maybe if there is something that they really want, they could spend a small part of it, say £1-£2K, and then invest the rest for the future.

A lot of how they make their financial decisions, will be based on the way that you have brought them up. I was brought up that you save for something to buy it rather than put it on credit. You don't buy what you can't afford. I am bringing my daughter up the same, so that she doesn't get into debt.

If the money is in your name, then you need to ensure that your will reflects that it should be left to them, and that would only happen if there is enough left after clearing your debts/funeral etc.

Alstroemeria123 · 15/10/2023 15:33

If the money is in your name, then you need to ensure that your will reflects that it should be left to them, and that would only happen if there is enough left after clearing your debts/funeral etc.

Well, that came out of nowhere! They’re likely, in the normal scheme of things, to want the money long before anything happens to OP!