0.5% interest. ?

[harestone]

My son was recently awarded compensation due to an accident, this is being held in the courts funds office where interest is paid at 0.5%. Now i'm no financial expert but surely the sum (several thousand pounds) could be placed elsewhere and gain a much better return over the 4 years till it's released to him ? but there's no option for this. Now as his guardian it's my duty to do what's best on his behalf but it seems i can't, is this reasonable and fair. ?

[gnvqsos]

My son was recently awarded compensation due to an accident, this is being held in the courts funds office where interest is paid at 0.5%. Now i'm no financial expert but surely the sum (several thousand pounds) could be placed elsewhere and gain a much better return over the 4 years till it's released to him ? but there's no option for this. Now as his guardian it's my duty to do what's best on his behalf but it seems i can't, is this reasonable and fair. ?

 

The courts will have relent the money at a nice rate like the solicitors do when they receive deposits for buying a house.It seems like custom and practice and a challenge may prove costly.At present you could earn about 4 pc per annum meaning an annual loss of 3.5 pc -on £8000 this would be £280 pa or £1120 over the interim.

[harestone]

The courts will have relent the money at a nice rate like the solicitors do when they receive deposits for buying a house.It seems like custom and practice and a challenge may prove costly.At present you could earn about 4 pc per annum meaning an annual loss of 3.5 pc -on £8000 this would be £280 pa or £1120 over the interim.

 

Yes that's what i'm thinking, and as the money is technically his surely any return available on it should go to him not their coffers. I think it's really unfair they've tied our hands like this.

[mafya]

My son was recently awarded compensation due to an accident, this is being held in the courts funds office where interest is paid at 0.5%. Now i'm no financial expert but surely the sum (several thousand pounds) could be placed elsewhere and gain a much better return over the 4 years till it's released to him ? but there's no option for this. Now as his guardian it's my duty to do what's best on his behalf but it seems i can't, is this reasonable and fair. ?

 

It's a disgrace, my son has a few grand from a road accident claim about 3yrs ago and that is also in the court funds office.

I told them I could earn better interest in another account and was told it has to stay with them and if we need any for my son we have to apply stating what we need it for etc but we have just left it so that he can access it himself when he reaches 18 i think.

I think it is so that the parents/guardians don't blow it all leaving nothing for the child.

[harestone]

I think it is so that the parents/guardians don't blow it all leaving nothing for the child.

 

Yes i can understand that totally, but i don't want the money released early as such, just a choice of investment that will benefit him more.

[geared]

Why do the courts hold onto the money for 4 years?

 

Is this to stop cash for crash claims and stuff?

[gnvqsos]

Why do the courts hold onto the money for 4 years?

 

Is this to stop cash for crash claims and stuff?

 

I imagine it is to allow the boy to reach adult status at 18,which Harestone may vindicate by confirming the lad's age.

[Moosey]

Hi,

 

Right, firstly, it's nothing sinister. The rules that govern us (Civil Procedure Rules) say that the money has to be held securely, to ensure it is safe for the child. You'd be surprised how many people would try and spend their kid's money. We see it all the time - "but I want to buy a new car....". Not quite the point!

 

Yes, the Court interest rate is rubbish - it's 0.5% as you say.

 

Yes, you can have the money elsewhere, including higher rate savings accounts, but they must be in the child's name, and not accessible by you (or anyone until child is 18, without Court permission). It's quite straight forward to apply to have it moved.

 

Basically, you need to go to Sheffield County Court (the counter to make appointments is ground floor on the right, through the doors), and tell the staff you want to see a District Judge, to apply to have the money transferred. They'll set up a hearing for you in a few weeks - very informal - you, Judge and child in a room, same as when the settlement was approved.

 

You need to take evidence of where you want to put the money, evidence of the interest rate etc, and they'll generally transfer it.

 

You can do it at the settlement hearing, and I generally do now, as the Court rate is so rubbish, as long as the client has a decent account to put it in. Not relevant to you now of course, but that's often the best time.

 

To answer the unasked question, I'm afraid your solicitor won't do the hearing for you, as they won't get paid to do it, and no one works for free I'm afraid.

 

Hope that helps.

 

(PS, again, it's nothing sinister, just standard procedure. It doesn't make anyone money doing it this way, it's just the way it's always been done. The Court rate has typically been higher than the bank rates, but obviously with the way rates are going at the moment, they changed a year or two back. Despite what someone said above, it isn't costly to challenge this and apply to move it. It costs a grand total of zero.)

[ECCOnoob]

The money for all child claims are held by the court until their 18th birthday. So in the OP's case I assume that will be a 4 year period.

 

The Court is there to protect the money until such time. They even have the final say over whether a settlement of compensation figure can be approved.

 

I understand what the OP is saying but the Court's priority is protecting that money. They are not a bank or building society. Im sure they could invest it better in higher interest or higher reward schemes. However we all know that investments can go up as well as down. Banks can rise and fall. It would not be doing its duty to "protect" that money if it was too ambitiously invested.

 

Also, many high value accounts lock the money away for 5, 10 years with long notice periods to withdraw. That would go agaisnt the court's duty to provde equipment/aids/medical treatment from those monies if the claimant requires it before their 18th birthday. They have to maintain an instant access to those monies.

 

To be honest, most instant access savings are lucky to get a rate above 0.2% these days. (eg: halifax only offers 0.2% on balances over 250k!)

 

I dont think 0.5% is too bad at all.

 

However, as said by my learned friend above :-) it is possible to move it within strict rules.

[truman]

The courts will have relent the money at a nice rate like the solicitors do when they receive deposits for buying a house.It seems like custom and practice and a challenge may prove costly.At present you could earn about 4 pc per annum meaning an annual loss of 3.5 pc -on £8000 this would be £280 pa or £1120 over the interim.

 

Where can I get 4%..genuine question..