Can someone explain declaring a child's savings account to DWP

[SleepySeaCucumber]

My mother (my son's grandma) has a savings account in his name with £8000. She's had it for him since he was a baby and he's almost 8 years old now.

She has retired last year and now claims housing benefit.

Last week her bank wrote to her telling her they're changing all children's accounts to be in the adults name. This has worried her as she said she's not declared that account on any forms before as she didn't even think she had to as it's not her money. It's all in my son's name where she is the trustee until he's 18.

As she is so worried about the account going into her name and confusing things with her housing benefit as they may think it's her money she now wants to close the account and give the money to me to open an account in my son's name and be the trustee.

I am also in receipt of Universal Credit and have savings under the £6000 limit.

I'm confused about whether if I open this account for my son if I have to declare it and also if it will affect my entitlement?

Surely it shouldn't as it's not my money, it's for my son when he becomes an adult.

Can anyone explain this to me? The whole thing is stressing me out and I can't seem to get a clear answer anywhere.

I'm not fully up to speed on how banks designate accounts so I'll keep to the benefits side.

You and your Mum need advice tailored to your circs. but the underlying principle is that the name on the account, the legal interest, is not necessarily the same thing as who has a beneficial interest in the money.

I think your mum is confused. It would be illegal for a bank to unilaterally change the holder of an asset in the name of person A to be actually held for person B without consent.

But plenty of banks allow children's savings account so if there's something dodgy about the status of the account your mum openned, simply open a new account in your child's name with another bank and transfer the money into that.

unless you mum is part of your household you have nothing to worry about. Her financial arrangements are down to her.

We need more information about the bank and what exactly they are changing.

I understand it's become much more difficult to set up a 'designated' account. By designate I mean in a format along the lines of Jane Doe as Attorney for John Doe i.e. where John is mentally incapable and Jane is his Attorney under an LPA.

Is that the situation here with an account in the name of the OP's Mum and designated as trustee for her grandson?

You might want to re-read the OP. The issue is that OP's mum is concerned that the child account of which she is a trustee will count against her in her (the mum's) benefits claims.

@LaerealSilverhand that was my take. OP's Mum is concerned that the £8k she holds for her grandson might be seen as hers.

If she's holding it for him then while she may have a legal interest as account holder the money beneficially belongs to the grandson. The beneficial interest is what counts for benefits but a lot of people, including people in councils etc who should know better don't get this stuff.

If the bank has removed a designator from the account for what I guess are regulatory reasons then I think Mum needs to approach the Council, declaring the account's existence, but asserting that beneficially it's her grandson's.

She might want to take advice first though from (eg) Citizens Advice.

Should have added to the above that if OP takes over as trustee they should declare the funds to UC but make crystal clear, using the words beneficial interest, that she holds it for her son.

This is the problem for people on benefits. Any money put aside for the children is at risk of being wasted in the child's sole name, but the parents can be penalised if they keep it safe in their name.

I think if you stick it in an investment account ( child trust fund type thing) it can not be withdrawn or accessed till the child turns 18. Then it’s not accessible funds. I’d be looking to see if she can just change the account.

I think you may need to put it in a Junior ISA if you don't want the money to count against either of you for the purposes of benefits. The money is then locked away until the child is 18.

Instead of changing the account to her name only can she change it to the child's name only? Or put it in another child account or premium bonds.

This ^

No, no, no.

You can put it in a Junior ISA and that will probably be more than enough to cover the legal/beneficial test for UC or HB.

If there might be a need to use money for the child's needs sooner then it's perfectly possible to do so without it being seen as Mum's or Gran's by DWP.

Hello everyone. Thanks for the replies. I went with my mum to the bank today and she closed the account she had for my son (her grandson) and the bank made the cheque payable to me so I have paid it into my bank account and have an appointment to open a junior ISA tomorrow which should be fine as they told me it can't be accessed until my son turns 18 which I think is best all round.

I've googled and it says I don't have to declare a junior ISA as its not accessible by me.

@SleepySeaCucumber if the ISA solution works for you/your circs that's fine.

I get a bit cross when people say it's that way or the highway with DWP treating cash as being that of the parents.

@Bromptotoo Well I am more comfortable with not having any access to the money as I don't ever want to be in a position where I use it to fall back on or anything. I want it as savings for my DS.

I must say I do worry about accounts and the DWP as there is so much conflicting information out there about what is allowed and what isn't.

Will moving the money to an isa be seen as deprivation as capital? My friend is in exactly the same position at the moment