savings and studying....
Discussion
Afternoon All, I’m after a bit of help from the PH hive mind. I’ve decided I’m going to go back in to education at the ripe old age of 30. I’ve finally got rid of any notions about buying a GTV and bombing around Europe….sad, but the education is for long term propects.
My questions are: I have a maxed out ISA with NS&I, and I also have a chunk of savings I’ve been building to see me through with rent during the first year I need to do at college with no financial help. I was thinking of transferring the ISA to my mum to hold on to, so I don’t get tempted to touch it & I’ll still have it once the studies have finished.
Regarding the savings I have to see me through the first year; I was also thinking of transferring this to her too and her setting up a d/d from it to me so I can pay my rent.
Are there any legal points regarding this plan I should be aware of?
My questions are: I have a maxed out ISA with NS&I, and I also have a chunk of savings I’ve been building to see me through with rent during the first year I need to do at college with no financial help. I was thinking of transferring the ISA to my mum to hold on to, so I don’t get tempted to touch it & I’ll still have it once the studies have finished.
Regarding the savings I have to see me through the first year; I was also thinking of transferring this to her too and her setting up a d/d from it to me so I can pay my rent.
Are there any legal points regarding this plan I should be aware of?
As implied by the I in ISA, it's an individual account and cannot be transferred to another person. You could move the funds within the ISA to somebody else, but you'd lose the tax wrapper.
I'm not sure what you're hoping to gain by transferring funds to your mother, just to drip feed them back? If you're not earning, savings in your name are likely to be paid gross, whereas her savings subject to tax?
Is it a cash ISA? Why not 'lock away' for 3-5 years to get a better interest rate?
Legally anything you transfer to her will become her's. It may also be worth considering inheritance tax issues should the worst happen... there's a chance you would end up paying 40% tax to get your own money back.
Are any student loans available for your study? It may be worth using this rather than personal savings (eg you could earn more interest on your savings than you pay on the loan).
I'm not sure what you're hoping to gain by transferring funds to your mother, just to drip feed them back? If you're not earning, savings in your name are likely to be paid gross, whereas her savings subject to tax?
Is it a cash ISA? Why not 'lock away' for 3-5 years to get a better interest rate?
Legally anything you transfer to her will become her's. It may also be worth considering inheritance tax issues should the worst happen... there's a chance you would end up paying 40% tax to get your own money back.
Are any student loans available for your study? It may be worth using this rather than personal savings (eg you could earn more interest on your savings than you pay on the loan).
Edited by onedsla on Monday 5th December 13:15
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