Child savings account

[nicojo]

I want to put a lump-sum into an account for my 2-year old son & continue to make regular payments. However, I do not want him to be able to access this money until he is 21. All the accounts I have looked into allow access at 16.

Does anyone know of anything appropraite?

[Hawkwalk]

put it in your name and not his. Then you can hand it over when you want to. Or dont tell him you have done this until he is 21.

[kujawski]

totaly agree

[dzug]

I doubt if not telling him will work - at some stage well before he's 21 he's going to get statements addressed to him arrive in the post and you are not going to be able to intercept them reliably before he sees and opens them.

So either in your name or set up a trust - which is expensive and has tax disadvantages.

An endowment policy that matures when he is 21 is another possibility

[CheekyChops]

If you put it in your name, assuming you are a tax payer, then you will have to pay tax on any interest earned on the savings.

[nicojo]

Thanks people. I don't want to put the account in my name. It is complicated, but basically I am unsure of how long I will be around for, so I want to put the lump sum in, & contribute for as long as possible. I need an account that no-one else can have access to, including my boy until he is 21.

Maybe just specifying this in a will is the ideal situation?

Dzug, I know nothing about endowment policies, maybe I should look into this....

[Hammer]

Not really an answer to your question, but have you considered an investment trust? This would invest in stocks and shares and is very likely to be worth more in 20 years time than just a cash account.

[dzug]

If it is in your son's name there is no way (other than deception) you can keep it from him once he is 18, possibly earlier. No account exists that will do otherwise - it would be illegal.

An endowment policy is savings/insurance policy that will pay out at the end of a set period or on earlier death - of either you or your son depending on which you specify. They were fashionable for mortgages in the 80s and 90s but were badly missold - the sum they guaranteed to pay out was set at well less than the mortgage whereas they should have been for a higher (more expensive) figure that was not reliant on unrealistic profit estimates. It would commit you to pay in every month for the full term, so maybe it's not what you are looking for.

So it either needs to be in your name and left to him in your will - even then it would be difficult to ensure he can't have it until he is 21 - or in a trust that you set up for his benefit. This will cost both to set up and run and is only worth while if considerable sums are involved. If it 'matures'after he is 18 there is additional tax to pay I think - not sure of the details but I think this type of trust is one the Chancellor cracked down on last year. You'd need to take advice and double check this.

[angie1981]

i can only find one high street bank that does savings accounts for children but only up to the age of 18. The only other think i can think of is to arrange through your bank an appointment with their financial advisor who can speak to you about trust funds and how to avoid tax implications. they check all banks across the board to find the best product for you. i hope this helps