Help son has too much money...what to do

[breeze]

My son's grandparents opened up a bank account for him at woolwich, they opened it with a token amount and have been contributing regularly, i recently got the book made up and found that several other members of the family are putting regular monthly payments in. So far we has over 2 thousand, and i have worked it out that by the time he is 16 he will have at least 15 thousand.

It is a woolwich account and i am not sure when you can withdrawl the money (12 has been suggested). I am unsure as to keep this from him until he really needs it, ie car, house deposit, university, etc etc.

I am also concerned about the amount people are putting in as one member has ms and her husband doesn't work to look after her, they monthly donate 25.00. i am sure that they wouldn't do it unless they could afford it.

I was never given this kind of opportunity as my parents always made me value money, and had to save for anything i wanted, and we feel as though i should not tell him until he needs it, but it was suggested he might not thank me for it.

He has just turned 3 so i do have a while before i need to worry, but your advice would be appreciated. Thanks

breeze, what a wonderful family you have. Your son is very lucky.

If I were in this position I would definitely - given the news about university fees etc this week - leave the money in the account until he was 18 and deciding whether or not to go to university. Do not let him get his sticky little mitts on it before then! (Don't even let him know about it if you can manage it.)

If you are concerned about the MS couple, could you have a word with the grandparents just to check it's not a burden for them?

Could you maybe transfer it to an account where he cannot get at it until he is 18 or 21 (if that was your age worry). My children all have children's bonus bonds with the post office. These pay an annual bonus then additional bonuses each 5 years and a final bonus when the child reaches 21 and the bonds have to be cashed in. Bonds can be bought in multiples of £25 but I don't know how their performance rates with normal bank/b.s. accounts.

I'd keep it from him until he's 21 - he'll have graduated from university by then if he goes and maybe be looking to move out () He'll also, perhaps, be better placed to use it wisely.

Should something come up before then when he needs the money, then there's always the option to give it to him then.

Why would he not thank you for such a wonderful "surprise"??

I suppose its because with me being a sahm, it is not my money that i putting so, but other family members.

Don't tell him.
I got £15k when I was 18 from an inheritance from my mother. I had known about it since I was smal, and once I got to about 14 had a constant refrain whenever having an argument with stepmother of "When I get my money I'm moving out" I then blew it all within about 6 months courtesy of an arsehole of a boyfriend and a brief flirtation with narcotics. I would wait until he needs it -and you get to decide what his needs are.

Think of the university fees or a deposit on a house. I agree, put it in an account where he cannot get his hands on it without your permission until he's 21. By then he would have either spent it on fees, or be ready for a few years travelling or a house deposit.

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robin, when they reach a certain age (older than 7 though I think) they are allowed to sign for themselves, but it is not compulsory and it is up to the parent to decide whether to sign over or not. Not sure when parent has to hand over - may not be till 18? (However with our B Soc the correspondence comes addressed to the child anyway.)

The minimum age may be 12...can't remember - I didn't allow the DDs to change until older than that but let DS1 change sooner because I was fed up with trailing along to the building society every time he wanted a fiver for something! (Mind you their accounts barely reached 100s, never mind 1000s.)

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Breeze - I understand your mixed feelings, I too am a SAHM & my parents have set up accounts for all their grandchildren (3 of them) & put £1K away each year, they are 'wealthy' & like to do this for the children's future & it is also a way of them avoiding tax issues; I have mixed feelings & my DH is very anti (in fact won't have anything to do with it, I am one of the trustees) it is some form of long term savings account & DS won't have any access to it until he is 21 - but it can be used with the trustee's discretion for education).

We also have a building society account for his birthday & Christmas gifts which I guess he will be allowed access to (under supervision!) when he is older. With his child benefit we have started a stakeholder pension!! He should therefore be well provided for in the future but I agree it is essential to teach the value of working & earning money from an early age.

My parents did the same about the trust till 21 thing, I think the trustees can release some money. For example, if there was an educational trip abroad that you could not afford.
I know my parents took advice on this, and were told that lots of young people blow money, if you don't safeguard it.

The way things are going, our children are going to need savings like these to pay their way through university or to put a deposit on a house. If relatives can afford to give this money over and feel happy doing it, then nobody should feel guilty for accepting it. If they keep it in their own accounts until they reach old age they will no doubt lose most of it anyway when they have to pay for care home accommodation or nursing care. I wish someone could have done it for me, we ended up right at the bottom of the property ladder and due to the upward trend in house prices we have never been able to progress very far up that ladder. When I was 21, even £2000 would have paid for a decent wedding reception plus all the trimmings instead of the village hall and buffet that we had or it would have been a substantial deposit on a nice little semi. We got into debt to find the £875 needed as our 5% deposit on our little one up one down terraced house.

Breeze, make sure that ds knows that his relatives love him and want to help him along in life but don't let him fritter away this nest egg in his teenage years. Dh's nephew was forever in debt and when his mother and grandmother died both left money in their wills with the proviso that he couldn't touch it until he was 25 (he had shown no maturity at 21). Unfortunately he hadn't learned the value of money and he still wasted what was left to him, but at least they had tried.

You should, however, be aware that if you ever need to claim state benefits (assuming you are in the UK) DS's savings will be classed as your savings in most cases and may work against you. Perhaps a good accountant or financial adviser can find a way of getting round this just in case the need ever arises.

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