Singing Pig

I have £20,000 to invest.  I want a reasonably safe investment, as this money is for my kids education.

I may need access to this money in 3 years time.

Implications - my partner is working on a temporary contract at the moment, due to finish in June of this year.  If he then has to sign on as unemployed, we will not be entitled to any job seekers allowance, or other benefits, as this money, at the moment is still in our names.

We have got this money by saving our kids Child Benefit, the whole purpose of saving it was to be able to give them some money when they leave Uni.  If we have to use it for day to day living it will soon disappear!

We have considered property, but are a bit unsure of all the ins and outs, and whether we would have the time to buy/rent/maintain a property.

What other options are available for us? Presumably if we invest it in something like gold, or stocks and shares we can be told to cash it in and use the proceeds to live on?

We have been told that even if we put it into the kids names, the benefits office/local council can still tell us to cash it in, as they are under 18.  Is this true?

Anyone got any good ideas? Please help!

Angie

Hi Angie,

under the FSA rules on Financial Promotions it's not sensible for anyone to give you a direct response,

so can you ping me your phone number (PM or straight email- see below) & either I or one of my colleagues will give you a call,

Thanks,

Tim

Hey Angie,

No advice as I am in the same situation. But I applauded you for saving the kids' child benefit for their own future. I have the kids under the age of 5 and from now onwards, I definitely put this money aside for their education. Good on you.

Walt

Have you considered property unit trusts? You can invest in some of these via an ISA so won't have to pay tax. Additionally there are no maintenance costs that are common to direct property investment - simply an admin charge.

I invested in a property trust about 5 years ago by paying £50.00 a month. 3 years later my invest was £1800 but my return was £2700.

Hi Guru

the problem is with my kid's age - I discussed the issue with a Financial Advisor from my bank the other day - he said they have to be 16 to have things like ISA's, otherwise they have to be in our name, which defeats the issue. They are in PEP's at the moment, in our names. Although one of my kids is over 16, hehas just started Uni, so we don't really want him to get his hands on the money just yet. Else it will be spent on beer and takeaways!

He is investigating whether we can have the money put in trust for them (he mentioned an OINK, can't remember what it stands for!) for the next few years, so we are looking into that at the moment.

Angie

The real problem is that you are seeking ways to outwit the benefits system and anyone who gives you advice could find themselves in trouble if your method of outwitting the system were to be deemed an attempt to defraud the system.

 

 

Rumpole

not trying to defraud the benefits system, just trying to find a LEGAL loophole, if you like.

Look at it from our point of view.  My husband has never been unemployed - until the company he worked for went out of business a year ago.

Because he has always been in work and paid taxes (29 years worth of taxes) we were in the fortunate position to be able to save our child benefit, for our childrens future.

Now, it may well be better if we go and blow it on a holiday, and fritter it on fags and booze and lottery tickets, and then we can claim benefit like the people who have never bothered to get jobs, or save money.

But to me, that's "stinkin' thinkin' "!

I just want to be able to put this money aside, money that we have diligently saved, for my children, who we have been saving it for.

There are other savings, our savings, which the benefits office will take into consideration - I just want to put this money safe for my kids.

Our bank suggested a trust fund, although apparently Gordon Brown has made changes, and now they are now not issuing them for the foreseeable future.

I will have to try other banks to see what we can get out of them.

Angie

Hello Angie,

I'm not suggesting you're out to defraud the system - just that any attempt to find a legal loophole should not be susceptible to being deemed a fraud by the authorities.

The first thing to be aware of is that they're not going to look too deeply into your claim. Basically, they'll believe whatever you tell them. What you don't want to happen is that, at some later date, they discover you misled them in your initial application and they demand all their money back and stick you in Holloway.

My most earnest advice is not to trust your bank any further than you can throw it. When recommending investments, your bank is thinking only of lining its own pockets with a fat juicy commission. If you hair is not already curly, I guarantee I can curl it for you with true stories of outrageously selfish investment advice from banks.

Independent Financial Advisors are a similar kettle of unscrupulous fish. There are some relatively honest ones but many of them are concerned only with their own commissions. Be very wary.

The simplest solution to your problem is to give the money to your parents or to some other trusted party as a gift. If they're kind enough to give you or your children a similar sum at a later date, what a wonderful coincidence that would be!