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Do we HAVE to save for our children's future? My parents didn't for me.

(34 Posts)
carolinecordery Fri 01-Mar-13 09:40:52

I feel a bit guilty for not saving for my children's future, although they're only 23 months and 4.7. Do we have to? My parents didn't save anything for me, but then again I was in the days of free university courses. Has the university tuition fees situation changed everything? Or is the ridiculous cost of housing as well?
I would like to put by £50 a month each for them. I could easily make that out of what the older child's dad gives in CSA, but for the younger one, his dad says let's not bother about saving for him till we're settled in a house etc (just started saving for a deposit). So should I make up the younger one's £50 by myself or not save for the older one either until the younger one's dad is willing to chip in?

My parents didnt save for me. They provided a house, food and clothes and felt that was job done. hmm

I currently save £10 pm into DD1s child trust fund. And will be starting a junior ISA for DD2 shortly. We are on a low income so thats all we can afford, but as our income increases that will too.

I also intend to "invest" in my kids. DD1 goes to ballet. She will have swimming lessons. If she is musical (shes only 4) we will get her lessons. As they grow I will be fully supporting any interests they have and helping them get as many life experiences as possible. I didnt have that at all and I am affected by it now.

Sorry, thats maybe off topic a bit. But I firmly believe that parents should be actively preparing for their childrens futures, even if its in small ways. And "my parents didnt for me" is not really a good excuse for not doing so.

CogitoErgoSometimes Fri 01-Mar-13 09:55:15

I was born in the sixties and my parents - working class people in low-paid jobs - put money aside for my DB and me from an early age. Whether they want to buy a house, start a business, go to uni (which was never 'free' in reality) or just back-pack round the world... young adults can always use some cash to get started. It's not compulsory and obviously, don't go into debt to put money aside, but it pays to start early

HecateWhoopass Fri 01-Mar-13 09:56:29

If we're talking cold hard cash then no, we don't have to, I don't think.

We have to adequately prepare them for independent life. Giving them the knowledge and the skills they need in order to make their own way in the world. Giving them the work ethic and the values they need. Supporting them in childhood to give them confidence, to develop skills that might lead them to the most suitable career for them, teaching them how the world works so that it's not a huge shock for them! Not doing all their bloody cleaning and washing but teaching them that there's no such thing as the housework fairy grin teaching them that you can't choose to spend all your cash on clothes and going out and expect that the bills will magically be paid or that mum and dad owe you a living!

If we can give them some cash to get them started, that's nice, it's helpful of course for anyone to be given cash grin, but we shouldn't be teaching our children it's their right to be subsidised by their parents into adulthood. I don't think that's a good thing. Far better to support them to get a job and save, teach them that's important.

That said, I'm not doing that. grin my children have autism and will never be able to have an independent life, so I am trying to make sure that I can fund them for life. There are circumstances when you will have to support your adult offspring.

But those children who are able to make their own way in the world - should be given the skills to do so.

It's not either/or, of course, people can and do do both, but I think it's less important to chuck money at them than to teach them how to go out and get it for themselves.

I think the tricky part of your situation is that there is a financial difference between your two children. Otherwise I would just say "If you've got money you could be saving, tuck it away, otherwise try not to fret about it"

Things are different for teenagers at the moment than they were for me at their age - I got a student grant, and housing costs were not as scary. My DS gets next to nothing, and the cost of living for students seems much worse, so we are much more involved than we might otherwise have been. But that's not from any savings, its just ongoing costs!

PixelAteMyFace Fri 01-Mar-13 10:08:58

As you said OP, your parents didn`t have to think about university tuition. And everyone expected to get a job easily and be able to buy a house in their twenties. Children used to leave home at 18 and not cost their parents very much at all after that.

Now that all of that has changed, I think parents should try as hard as their own financial situation will allow to save something regularly for their DC`s future.

We had savings accounts for our DCs and were very glad of them when they were students, as our own circumstances had changed for the worse in the meantime, and we no longer had spare money available to help them.

If I were you I would start saving for both DCs from now, even if it means putting less than the fifty pounds you had intended.

TheMaskedHorror Fri 01-Mar-13 10:09:18

I don't think our parents needed to but now that universities are n't free, I feel like I should be saving towards the fees for them(and if they don't want to go then I go on a luxury holiday around the world)

CunfuddledAlways Fri 01-Mar-13 10:16:38

i save £25 per week per child and have been doing since they where born - my hope is that when they are adults they will be able to use it as a deposit for a house or a similar life investment for them, this is an amount i can afford out of my child tax credits and i want them to start their own savings account as soon as they are able, i did many different things for money starting from around 12/13 and would expect my children to do the same.

carolinecordery Fri 01-Mar-13 10:30:09

Thanks for the replies everyone.
I am definitely going to be doing everything I can to be preparing the DC for life in all ways I can re skills, money sense, opportunities and education relevant to their interests and the modern world.
I do accept that things are different now from when I was 18/21/24. I think I'll have to be considering this more and more. I have no idea what it's like for an 18 year old now, their financial landscape.
I think it's a good point a couple of people made, that you don't have to end up actually giving the DC the money you've saved for them if it turns out they are making their own way just fine. I suppose it would be quite prudent not to say 'we're saving X for you and you can have it when you're 21, or whenever' as then they will be making all possible plans to save for themselves and you can swoop in to the rescue with some cash if needed at a later point.
If you CAN save cash, you're never going to regret saving it, whatever it gets used on.
Another question I've got is if your older child got a government trust fund and the younger one didn't, did you make it up to the younger one by equalling it out from your own money?
And- if the csa money I get is more than I think DD costs, am I morally obliged to put part of it away for her future?
If you save for one child, are you obliged to save exactly the same amount for the other one(s)?

coralanne Fri 01-Mar-13 10:41:20

I opened bank accounts for my DGC the day each of them was born.

It's a bit hard to calculate if they will all receive the same amount when they are 18 because you have to take into account the cost of living and inflation.

Also I never buy expensive birthday or Christmas presents for them. just something small and then some cash . It is left up to the parents discretion if the money is saved or spent. At the moment it is being saved towards an overseas trip later in the year.

I dont think you are morally obliged to save any specific amount.

The CSA thing, if there is a surplus then perhaps using that for day trips to educational places or towards "extras" she wouldnt have otherwise is still benefitting her but not simy sticking it in savings.

There are no hard rules. Its what is affordable and appropriate to your circumstance.

DD1 got £500 in the trust fund. It will be years before I could afford to make that up for DD2. If I can I will. If I cant I wont.

notso Fri 01-Mar-13 10:47:52

My parents couldn't afford to save for themselves never mind DSis and I.
DH and I do save for our four DC, only £15 a month each, which seems nothing compared to others. I think we need to up our game a bit.

Svrider Fri 01-Mar-13 10:48:02

I think it very much depends on circumstances
Pop £20 each month into their account for each child if you possibly can
If you carnt don't!

DancingInTheMoonlight Fri 01-Mar-13 10:48:59

I don't see why you need to separate monies with dc1 and dc2. Have one account for savings and put in the contribution from csa into it and top up with whatever you can afford. I would assume you don't split everyday costs, trips out, good etc evenly, you just get them what they need rather than subtracting dc1s from the csa.

That way they both get equal and you can vary payment amounts without worrying about matching. Then split it in adult hood for the dcs

N0tinmylife Fri 01-Mar-13 10:52:19

If I were you I would start saving for the older child now, with a view to saving the same amount for the younger child when they get the the age of the oldest now. So you aren't being unfair by saving for one and not the other now, they will both end up getting the same.

CogitoErgoSometimes Fri 01-Mar-13 10:56:07

" I suppose it would be quite prudent not to say 'we're saving X for you and you can have it when you're 21, or whenever' as then they will be making all possible plans to save for themselves "

Keeping them igonorant is one way of doing it. Another way is to use the prospect of a pot of cash to have some grown-up conversations about interest, investments, savings, life expectations, money-management and so forth so that they have a chance of being financially aware and responsible when they hit adulthood. Personally, I've always favoured the latter.

carolinecordery Fri 01-Mar-13 11:22:40

Dancing and Notinmylife: great ideas!
Cogito- yes I suppose having the real money to deal with will make those lessons in interest, savings etc a lot more immediate.

CogitoErgoSometimes Fri 01-Mar-13 11:46:34

My late grandmother left DS a sum of money back in 2002 when he was a toddler. I invested it for him and, now he's older, he takes an active interest in how the investment is doing and it's led to some interesting conversations. Not least that my grandmother - a highly intelligent woman born at the wrong time in the wrong social class - valued education more highly than anything else and would be thrilled if it got him through college. So it has become 'uni money'.. expectations duly set. I'm always rather dismayed when parents assume that their children will grow up to be idiots that will blow the cash they are given on crap. You have 18 years to influence their thinking.. use it wisely.

carolinecordery Fri 01-Mar-13 12:20:45

I don't think it makes you an idiot to blow a bunch of cash that someone gives you when you're 18- more 'normal'. The same 18 year olds live to regret it and openly say so later on. Have you not blown cash in your late teens and twenties that you wish you'd saved for a house or something? Teenagers are 'spontaneous' shall we say, right down to their different brains and the temptation to blow it on going out, holidays, clothes and dare I say it recreational drugs will be massive, for a lot of young people. That's why i've gradually shied away form contributing any more to DDs child trust fund. I don't assume my DC will grow up to blow their cash and will teach them carefully about money management, but I think the possibility is still there with even the best parental preparation.

BackforGood Fri 01-Mar-13 12:55:12

I agree with you there CC. I think it's a stage many youngsters go through in their late teens / early twenties, however they've been brought up - it's about what's important to you at that time in your life.

Re your OP, of course you are not obliged to save for any of your children, but my thinking is, if you have the money, then it seems a sensible thing to do. Of course, if you have money at the end of the month, then you could use it in other ways. So you might overpay your mortgage with it, then, when the dc get to University / buying first home / wanting to learn to drive / wedding / whatever you might think of saving for, you will have paid off your mortgage early and then have more cash available every month to help them at the time.
It's difficult when you have 2 children receiving different amounts from different Dads of course. My parents died, having set up a small savings bond for each of their grandchildren except the youngest (my dc3), so that was an easy decision for us to invest the equivelant amount of money for her when we sold their house and received some money in their will. Bit of a no brainer, as we knew they would have treated all grandchildren equally, it's just she was born too close to them dying. Much more difficult to know what's "fair" when there are 2 different Dads to take account of.

DontmindifIdo Fri 01-Mar-13 13:09:52

if you have a spare £50 a month I would save it in an account in your name. I'd keep that separate from general 'saving for the house deposit' money with your DP or family money (perhaps open another account and tell yourself you can't take anything out of it).

Once your DCs get to 18, you should have a decent pot of money, you can then give half of that to your DC1 if they are going to uni, or if not, hold on to it and give it to them as and when they need it. however if neither particuarly need it, then you can keep hold of it and either give it as gifts when they are in late 20s, or use it towards your own retirement...

Badvoc Sun 03-Mar-13 16:11:16

With what we and my pils put into their CTF accounts it works out at £75 each per month.
We hope that by the time the dc are 18 they will have a pot of cash to use for study/travel etc
No idea how much they will have by then...it's 8 years aWay for ds1.

vj32 Mon 11-Mar-13 08:39:38

DS has several bank accounts and a pension. He isn't even 2 yet.

The savings might be for uni, for a house, or just for driving lessons, which are all astronomically expensive now and will only get worse over time. We don't have a big income but prioritise savings for all of us to cover emergencies and big bills in the future as we know our income will never be massive!

Picturesinthefirelight Mon 11-Mar-13 09:05:57

We are not saving for their future. Our money goes I their educational and other needs now - there's none left over.

Notmadeofrib Mon 11-Mar-13 14:52:50

I worry that many people prioritise saving for their kids over saving for themselves. I wonder how many of you saving for your kids have a decent amount of pension capital? One of the best gifts you can give your kids is not having to worry about you in your old age.

ISeeRedPeople Mon 11-Mar-13 15:09:14

My 18mo DD has a normal bank account and if she gets any money for Xmas etc (or MIL's bingo winnings!) it goes straight in there. I do worry that I ought to have some more formal arrangement - ISTR my parents had life insurance for me and DB or something? I haven't a clue about any of that or if you can still do it.

She also has a £2 tin that we save any £2 coins we get, ostensibly towards a holiday somewhere far-flung when she's old enough to appreciate it.

We have a baby on the way and I don't know how it's all going to be split. I guess the £2 tin becomes 'theirs', and I match the two bank accounts on handover day. God knows!

Mum2Fergus Mon 11-Mar-13 16:35:19

I have child benefit paid into a savings ac and top it up with any birthday/xmas money he receives. Ac in my name incase of emergencies and I can access it but no need so far. Have approx £5k for him at moment do hope to keep building on that.

tigerlilygrr Tue 12-Mar-13 19:41:11

Notmadeofrib I agree 100%! A finance writer for the Telegrsph said the best gift a parent can give a child is to ensure that they - the parent - is financially independent and solvent. If you have money left over after that, fair enough.

ShatnersBassoon Tue 12-Mar-13 19:49:04

There's no expectation I don't think. My parents didn't save for me, I have no problem with that. They'll be comfortable in their dotage and I can't fault them for putting their spare cash into their pension.

I do put money aside in trusts for the kids, but not for anything specific and I don't suppose it will be a life-changing sum when they cash them in.

zwischenzug Wed 13-Mar-13 20:56:49

Social Mobility is lower than it has been in 50 years, house prices are triple what they were in the 90s, University costs £50k rather than being free AND is required for almost any job with a future, decent pension schemes are closed to new entrants - many parents* have had a fucking easy ride and their kids won't have half the opportunities they did. Too bloody right these parents should be helping their kids out with money.

*Younger parents (under 30) may suffer from some of these issues themselves.

zwischenzug Wed 13-Mar-13 21:10:04

Oh yes and not to mention many of the jobs the parents started out in have been exported off to China so that the same parents can buy cheap DVD players and suchlike in the shops. Starting out in life is harder now than its been for anyone born post WWII.

(and no availability of iPods doesn't negate the lack of availability of jobs and housing, and things that are actually important in life).

Jayne266 Wed 13-Mar-13 21:20:31

Me and DH talked about this and felt we needed to put money away. We have said however its for us to decide what it goes on and he won't know about it.

Babelange Thu 14-Mar-13 22:18:27

If you save for your kids (eg. Bonds, accounts in their name), you have to sign a declaration to say that the savings are completely theirs for tax purposes.

I am in favour of making the savings clearly identifiable as theirs. I am vague about the exact amount, when asked I agreed about £1000 total but in fact it is more - in the form of savings, bonds, shares. One of the building societies (might be true of all) start sending info to kids about their accounts @ 12 & require a signature at this age too!

Youngest has a govt Trust Fund & we started saving for both DCs at the same time; eldest has more complex investments & is running £500 behind so wandering what to do about that.

I am in the camp which is to save specifically for the DCs. I am more worried about the stealth boasting that would go on if they knew... Goodness, one of the cheeky DCs came back from school with information about other parents' salaries and asked me what I earned.

The problem is money comes & money goes, just a little a month could make a big difference in the future, especially if something comes up and needs to be covered from income - my parents helped a little when I was a young adult but we're older parents ourselves & wonder about being in full employment before retirement just when our DCs might need us. Pensions are sorted & now ready to start a buffer fund for ourselves.

OneHundredSecondsofSolitude Thu 14-Mar-13 22:46:52

We've not got enough to save. We barely break even each month

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