ben
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Post by ben on Dec 3, 2015 16:53:28 GMT
Long story short me and the wife are currently fostering a child it will probably be long term, for this the government are trying to give us a ridiculous amount of money (almost criminal), we have no need or interest in this money, we even. tried not taking it as we do not want it, but was basically told if we did not take the money they would foster the child somewhere else as they state the money is needed to ensure he is cared for, although how that ensures it they were not that clear on. I currently have it sat in an account doing not a lot .
As I do not plan on keeping the money myself , do I play it safe and place it in a bonds/Isas for him or I do invest it with my own, most of my investments is with stocks and shares and try to make the most out of it
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pom
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Post by pom on Dec 3, 2015 18:03:19 GMT
I read somewhere recently (not sure why as I don't even have kids) that kids can have their own tax allowances etc so it would certainly be most efficient to invest it in his name rather than in with yours, and kids accounts usually have far better rates....also saw something however that if parents are giving more than a certain amount it actually has to be counted against their allowances, so a danger that you end up having to pay taxes at your rate - so probably worth doing some investigation into that.
Apart from validating that tho, given it's going to be long term so plenty of time to trickle it into various places, why not build up a balanced portfolio, as you would with your own, so some "safe" and some a bit less so.
And I have to say I do think it's a lovely idea to use the money this way
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ben
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Post by ben on Dec 3, 2015 19:15:45 GMT
The tax allowance for a child is just over 4,000 I think and yes you get a better rate in an ISA, but that was my concern if it was taxed at same rate of mine it would hamper it quite a bit, although I was thinking of just dumping it in something like Ratesetter and forgetting about it but the tax would hamper this pretty bad, although I would guess once the 1,000 tax free on interest comes into play that should help, for a year or so anyway, suppose have to do some research
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micky
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Post by micky on Dec 3, 2015 21:20:48 GMT
Why not look at the new Help to Buy ISA, it is for 16yrs plus.
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ben
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Post by ben on Dec 3, 2015 21:38:33 GMT
Got a fair few more years to go to get to that point, looks like stock and shares isa for a bit of it then probably just invest the rest in shares and take the hit on tax
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Post by ablrateandy on Dec 3, 2015 23:39:27 GMT
Bizarrely I think that you can do child pensions now. Wonderful long-term gift!
PS. Well done for getting all the way through - my missus sat on fostering panels and was deeply saddened by how hard and disheartening it is for would-be parents to be accepted.
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j
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Post by j on Dec 3, 2015 23:44:45 GMT
My understanding is that children are entitled to the same inital tax free allowance on earnings as any adult (currently just over £10k). Have a look at Martin Lewis' moneysavingexpert.com site. It has some useful info about the various Child saving accounts & child ISAs available. Might help give you an idea how you want to proceed. May I also congratulate you on the admirable & worthy thing you & your wife are doing for the child by fostering him/her. I wish more of us could do this noble thing. Well done!
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ben
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Post by ben on Dec 4, 2015 0:12:12 GMT
Bizarrely I think that you can do child pensions now. Wonderful long-term gift! PS. Well done for getting all the way through - my missus sat on fostering panels and was deeply saddened by how hard and disheartening it is for would-be parents to be accepted. I have seen that but it seems a pretty dreadful gift happy 18th, here have a pension although I suppose no reason why could not put some into it The amount would be more then the tax free benefit so would still be taxed, Although the tax free benefit and the ISA would not make it too bad, would take care of about 3/4 of the money. I will have to see how the tax would work as a foster carer I am only his legal guardian so would be unfair on him having to pay higher tax rate on it when his parents certainly do not pay any tax. There is also a few good children's account so I suppose I could fill the rest up with that.
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Post by ablrateandy on Dec 4, 2015 0:15:07 GMT
re pension I agree that it maybe shouldn't be everything... but compounding works well over 50 years  |
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ben
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Post by ben on Dec 4, 2015 0:32:51 GMT
re pension I agree that it maybe shouldn't be everything... but compounding works well over 50 years Think it be a bit longer then 50 years at rate the government is changing age, at this rate will have about 70 years of compounding, but might put a little into that too
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