What to do with money left to my kids?
Discussion
My two teenage kids have been left £10k each from a relative and it's currently just sat in my bank account.
The kids are 17 and 15 and I know if i just transfer the money to them, a lot of it would be wasted in no time. They don't know they have it yet and I want to do something with this money to benefit them later in life - help towards a house deposit, etc.
When it comes to investments, ISAs, etc I have no clue, so i'm hoping someone can point me in the right direction to get the most out of it.
Thanks
The kids are 17 and 15 and I know if i just transfer the money to them, a lot of it would be wasted in no time. They don't know they have it yet and I want to do something with this money to benefit them later in life - help towards a house deposit, etc.
When it comes to investments, ISAs, etc I have no clue, so i'm hoping someone can point me in the right direction to get the most out of it.
Thanks
Stick it in Premium Bond accounts for them, it keeps the original amount safe.
Set it up to send them any winnings, rather than reinvesting.
Imagine the excitement for them every month as they check to see if they are about to get a windfall, however small it might be!
So every month that inheritance will be in their mind, and mean a lot to them.
Whilst keeping the capital safe for a house deposit.
Only downside is it will be susceptible to inflation, but we are not talking big amounts, and I am sure the fun would outweigh doing something more boring!
Set it up to send them any winnings, rather than reinvesting.
Imagine the excitement for them every month as they check to see if they are about to get a windfall, however small it might be!
So every month that inheritance will be in their mind, and mean a lot to them.
Whilst keeping the capital safe for a house deposit.
Only downside is it will be susceptible to inflation, but we are not talking big amounts, and I am sure the fun would outweigh doing something more boring!
My 3 children were left a similar amount each albeit maybe 20 years ago.
For each of them I set up Investment Trust accounts with 50%, with the balance equally into PB’s and a high interest cash account.
The youngest ( now 25 ) still has all 3 of these accounts still in place.
He wins the occasional PB prize but the IT account is roughly x4 of the original investment.
Stocks and Shares ISA would be another alternative.
For each of them I set up Investment Trust accounts with 50%, with the balance equally into PB’s and a high interest cash account.
The youngest ( now 25 ) still has all 3 of these accounts still in place.
He wins the occasional PB prize but the IT account is roughly x4 of the original investment.
Stocks and Shares ISA would be another alternative.
Stupot123 said:
Stick it in Premium Bond accounts for them, it keeps the original amount safe.
Set it up to send them any winnings, rather than reinvesting.
Imagine the excitement for them every month as they check to see if they are about to get a windfall, however small it might be!
So every month that inheritance will be in their mind, and mean a lot to them.
Whilst keeping the capital safe for a house deposit.
Only downside is it will be susceptible to inflation, but we are not talking big amounts, and I am sure the fun would outweigh doing something more boring!
Possible second downside. How would that work if one of them won a significant amount? Child 1 is significantly richer than child 2, and possibly the parents, but couldn't be trusted not to blow 10k in the first place. Now they have multiples of this.Set it up to send them any winnings, rather than reinvesting.
Imagine the excitement for them every month as they check to see if they are about to get a windfall, however small it might be!
So every month that inheritance will be in their mind, and mean a lot to them.
Whilst keeping the capital safe for a house deposit.
Only downside is it will be susceptible to inflation, but we are not talking big amounts, and I am sure the fun would outweigh doing something more boring!
Moulder said:
Possible second downside. How would that work if one of them won a significant amount? Child 1 is significantly richer than child 2, and possibly the parents, but couldn't be trusted not to blow 10k in the first place. Now they have multiples of this.
This is a valid downside. My brother and I were fortunate enough to recieve similar amounts from my parents upon turning 18, and I'm sure there probably would have been a few arguments if one of us ended up with a fair amount more haha. Anyway we got the money which had just been invested in Cash ISA's for years, then put it in a Lifetime ISA to buy a house (would be help to buy now, I think?) Suppose you could also just do the premium bonds thing and split any winnings evenly, still get the kind of excitement but its even.
If you don’t use your own ISA allowance in full which it sounds like you don’t (you also have a wife you can use) - I’d set up an investment in a fairly simple stocks and shares product - then in 10-15 years time it will likely have increased significantly and can be used for a deposit on a property or whatever else.
This way they don’t need to know about it, and it is accessible unlike if you did a junior ISA which they would control from 18.
Premium bonds and cash accounts would be a non starter for me. Waste of time.
This way they don’t need to know about it, and it is accessible unlike if you did a junior ISA which they would control from 18.
Premium bonds and cash accounts would be a non starter for me. Waste of time.
My trust fund was locked from me until I turned 25, I’m 34 now, and I can honestly say that it was the best decision the family made. I was never reckless but those few extra years of me maturing, and the money growing, were invaluable.
I’d avoid premium bonds, stick it in a few funds through somewhere like AJ Bell and sit on it until they’re each 25.
I’d avoid premium bonds, stick it in a few funds through somewhere like AJ Bell and sit on it until they’re each 25.
Big Worm 1 said:
The kids are 17 and 15 and I know if i just transfer the money to them, a lot of it would be wasted in no time. They don't know they have it yet and I want to do something with this money to benefit them later in life - help towards a house deposit, etc.
They're not actually entitled to receive their inheritance until they're 18. In the meantime, the money should be held in trust on their behalf.This explains how it should work: https://www.thegazette.co.uk/all-notices/content/1...
C69 said:
Big Worm 1 said:
The kids are 17 and 15 and I know if i just transfer the money to them, a lot of it would be wasted in no time. They don't know they have it yet and I want to do something with this money to benefit them later in life - help towards a house deposit, etc.
They're not actually entitled to receive their inheritance until they're 18. In the meantime, the money should be held in trust on their behalf.This explains how it should work: https://www.thegazette.co.uk/all-notices/content/1...
Juan B said:
Suppose you could also just do the premium bonds thing and split any winnings evenly, still get the kind of excitement but its even.
I match any winnings from one account into the other so they're always the same. Bulk of the kids savings is in a S&S ISA though as PBs are a safe bit of fun but the ISA should actually make a decent amount of money over circa 25 years.
Big Worm 1 said:
It's not inheritance, it was in bank accounts that were in the kids names but also in the relatives name (if that makes sense), as she set the accounts up and put money in there for the kids. Once she passed away, the accounts had to be closed so the money came to me to deal with.
What did the will say? Or were these join accounts with the kids?2880 in to a JISA in a global tracker, Gov tops it to £3600. Do it again post April. That'll be £7200 in a pension from the off, 4 months from now.
The remainder in premium bonds. For all the reasons and minor risks noted above, and you can withdraw some or all of them ("cash them in") if they have any short term needs, like driving lessons, or year 1 car insurance.
Family/ you can contribute to either in later years if you wish.
10k will take a long time to grow to something meaningful for a house, so unless you are able to add to it significantly in the near term, I'd park that idea myself.
The remainder in premium bonds. For all the reasons and minor risks noted above, and you can withdraw some or all of them ("cash them in") if they have any short term needs, like driving lessons, or year 1 car insurance.
Family/ you can contribute to either in later years if you wish.
10k will take a long time to grow to something meaningful for a house, so unless you are able to add to it significantly in the near term, I'd park that idea myself.
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