Money in trust for kids

Since any interest over 100 a year on a kids account with money provided by the parents lands up being taxed and regarded as parents liability she will be on a sticky wicket

Actually i thought that Nationwide was the one Bsoc whose kids account pays a decent interest rate unlike Birmingham Midshires who used to be good but is now awful

If she is going to be reliant on state benefits she needs to ensure she has no savings attributed to her

Get a Granparent to open a kids trust account at a B Soc and move the money into that fast

In message , nambucca writes

The child allowance is paid to the parents. It is the parents money. It is intended to assist with the parents' costs of bringing up the child.

If the parent decides to put an amount similar to the Child Allowance into a savings account then this is her choice and she must realise that by doing so she is deliberately depriving herself of capital that she may need in the future. I dont see why the state should have to pay when she has deliberately deprived herself of dosh which she might need for a 'rainy day'.

Might be worth seeing an independant financial advisor. The various banks and building societies can usually only sell you their own products.

As I recall, child benefit is classed as income by the benefits agency and does affect benefit received. So while you can put money away now, when you claim benefits then you will be making yourself out of pocket by a fair bit each week. The money is there to be a help in raising the kids. Nice that someone can afford to save it for them, but thats not what its for.

Has the new scheme of savings for kids mentioned a budget or two ago actually started yet?

Martin <

From what I can remember when my mother set the same thing up for one of my kids if you put the account in the child's name they have automatic right to funds when they reach 16 not 18.

Dee

That is, pardon the expression, BS. It has no basis in insolvency law.

At most one is talking about a couple of thousand pounds a year, below the radar for anything. One is not required to abstain from giving gifts out of income because, at some future, unpredictable time, one might just possibly become insolvent.

The test for a fraudulent conveyance is ability to meet one's debts NOW as they come due. Nothing said earlier suggests that is not the case, and that a future ex-husband will renege on his child support responsibility AND that the CSA will be unable to enforce it.

Etc. etc. etc.

Don't be an arse, I said that this wasn't the case. She hasn't got much money, and her kids future is the top priority. Don't be deliberately obtuse, if you have nothing interesting or useful to add, then just stay quiet.

Fine if she wants to save for the kids. It will impact her benefit money, should she get it. Her kids future may be top priority now, but if income isn't big enough then it needs to pay for the kids now.

Fine if she can avoid temptation and give the kids a few grand when they are older. Trust fund comes in handy. Just not always possible to keep it, or to keep adding to it.

Martin <

In message , sufaud writes

Errr, thanks for that. I think you must have replied to my post by mistake, because I cant see anything you have said that is relevant to my point.

In message , Mike Hibbert writes

No you didnt. You said that some people would "stick hugh wads of cash " which isnt the case here.

We are just talking about standard State Benefits arent we? Which for some reason somebody wants to ring fence so that they can get more state benefits.

So why wont she spend her state dosh on the kids now then?

This is a public group. If you dont want a response from the public, then dont post here. I suggest you step back and re-look at this.

Where did insolvency law come into this? The poster just wanted to know how his friend could pretend she hadn't got savings so she might not lose benefits.

You seem to have become all critical over an assumption you made. When it comes to claiming means tested benefits savings of 3000+ can reduce benefits. If she has saved 2K per year and the 'children' have amassed a large sum then it's way above the 'benefits radar' and she may not be entitled to any benefits at all.

More and more assumptions, etc, etc, etc ;-)

Except that it's not actually 'their' money, but her money that she has allocated to them for the future.

This poster seems to think that she just wants to avoid using her savings. If this poster is right and that is the intention then what you are asking for is advice to defraud the benefits system. I don't believe that this is the appropriate place to ask for advice on how to commit fraud. Some of us might have no choice but to take action. Some others might feel that encouraging you to tell her how to defraud us out of our money (assuming we're tax payers) is not cricket.

He wasn't being an arse. She has got money, but has earmarked it to give to her children in the future. Unfortunately life doesn't always go to plan. I recently had to fork out 1200, what I didn't do was look at ways to defraud every other tax payer, I paid up. I'm not arsey but consider what would happen if everyone tried to claim that really the 10,000 they had saved up was 5,000 each for Johnny and Jeffrey when they turn 18.

BTW even if the money is in their names it counts as her savings over a certain level. The system is unfair and often bizarre :-(

This takes you to a comprehensive benefit advice website.

Unless of course the child was born after August 2002 and the money goes into the CTF.

In message , Jane Tweedynn writes

But that wouldnt be the 'child benefit' referred to?

No, but a parent can pay money into it. Using any available funds, including child benefit.

Martin <

You could open a stakeholder pension in the child's name. Then they'd get the extra bit )(quasi tax relief) put in by the government. Robert

Its a good idea. But can't be touched at age 18.

Still, an early start on pension savings has a larger impact than trying to start later in life.

Martin <

A few thoughts...

To get around the £100 annual interest bit, make sure any investments come from someone more distant than the parent. So route the money via a grandparent, for example, without making it really obvious.

I doubt that putting money into a pension fund for the child is a good use of cash for a parent who doesn't have a whole lot spare and may need it sooner. The child won't be able to touch it for some 50 years, and by then the whole state pension system will be different - very possibly the state pension will be rolled up into social security and thus in effect means tested, so having built up a large *state* pension pot may be a complete waste of money.

I have looked at trusts for kids and AFAIK there is no way to do it (without resorting to overseas-based trusts) so that the child's personal CGT and income tax allowances can be used *and* the parent can control the money past age 18. For example, you may not want the child to get the money at 18, if they turn out to be absolute monsters, on drugs etc. An A&M trust can delay the handover till age

25 but with any of these trusts one cannot take the money back out. There is also the early death of the child to consider...

The simplest way may well be to just give the money, in an untraceable manner of course (cash), to a trusted person (e.g. a grandparent) to invest in an ISA or something like that, on behalf of the child.