To think about evening things out between the kids

Exactly.

Good intentions towards both children?

There is no such thing as family compensation - far too complicated for the courts. That's where loving parents with good intentions come in.

But it isn’t family compensation. If it were, OP would be able to access it and do what she pleased with it.

I have four children. The eldest and youngest both receive regular payments for a disability. They are at a financial advantage over the two children who don't receive any money each month. Until my eldest turned 18 I saved money for each every month. They all got same amount.

No one asks to have a life changing accident or disability.

If you try to even it out you will end up being unfair to your child who had the injury or put yourself into financial strife. So I wouldn’t. Concentrate on being a happy family and in keeping your kids close to each other and in time tell your other son about his brothers compensation.

'Fair' is a subjective notion. If you really want to go into it, I'm sure second child was affected during first child's convalescence. No court is going to award him compensation for the time his parents, no doubt, were in hospital away from him and all the attention/nurturing/experiences he missed out on due to first child's injury. A sick child has an impact on the entire family so the compensation, if not needed for ongoing medical care, should be seen as family compensation.

But it ISN’T fair. Fair is giving your children the same.

I had a similar situation. I discussed it with both kids and ultimately we agreed to keep things even.
Maybe your kids might agree a 50:50 split or 60:40 but best to agree it with them imo.

Myself and my siblings all have different potentials and needs. My parents have looked after us accordingly when it comes to financial things. They run "what is fair" by us and we all always agree. My sister and I have done well for ourselves and we recognise that so we are very happy for my parents to help my brother out more.
My father came from a family of 7. All of them bar one went to college and pursued careers. The one who didn't, was left everything from his parents because he was the one who needed it. Not one of the siblings had an issue with that. They all felt it was fair because that was how they were raised to feel.
I've been raised similarly and am glad about that. Money can tear families apart, sadly, but it shouldn't.

I'd even it up for sure.

I think there's an inbetween available here. You could split what you were going to put away for each boy into 2/3 and 1/3 instead of half and half. This way you're still saving for both but you are giving a bit extra to your youngest so he doesn't end up feeling too hard done by without sending the message to your other son that he's essentially being punished for receiving compensation. Without knowin the figures involved it's hard to say how far this would even things out but I think it's reasonably fair.

...but if great Aunt Mabel left £10k to one dc and £0 to the other as a child then YES I would 'even it out'. Hopefully through the executor but if not then I'd save the equivalent for the other dc

Sorry for the derail but your preferred option (if great Aunt Mabel left an inheritance to one child but not the other) would be illegal. No executor can simply decide to change the will like that. While beneficiaries can opt to make a variation to a will the beneficiaries have to agree and give consent. A child beneficiary legally cannot give that consent. To split a child's inheritance with others become an act of theft. But adult beneficiaries could agree to split their own bequests to people who have been left out. They cannot split an inheritance given to other beneficiaries be they children or adults who don't agree.

Similarly the compensation awarded here belongs to the injured party. While the OP here has no intention of 'splitting' it another poster suggested this might be an option. An adult who has been awarded compensation may decide to share it if they wish. As a child is too young to give consent then no-one has the right to take any of their compensation for another person. If they decide on reaching adulthood to share the money then that is up to them.

This it what I was thinking too. The boys could be involved in the decision at that stage.

Even it up - no question. The source of the money is irrelevant - the fairness is what matters.

Provided you are not anticipating any more health problems in the future for your eldest, then I think it's fine to even things up for the younger one.

Can I just say I think it's great that you are trying so hard to be fair, and thinking about it so scrupulously. Many parents don't.

Your eldest received compensation as he suffered a terrible accident. Thank goodness he appears to have pulled through and be fine at the moment. Compensation isn’t given lightly and you should consider if you try and even things out in the future you might actually disadvantage your eldest. While he is ok now if for example his accident was the result of being hit by a car. What might happen when he gets to 17 ? He might suffer PTSD and severe anxiety and be unable to drive. Result is he needs to spend more on transport taxis etc. for the rest of his life unlike his younger sibling who passes his test. His compensation would have helped subsidise this and possibly pay for therapy. Inadvertently by levelling up you disadvantage your eldest which would result in you and DH feeling guilty. You can’t predict the future and if PTSD / anxiety / depression do manifest as your eldest gets older this might adversely impact his ability to gain qualifications / get a well paid job and therefore he struggles financially and if you have levelled up he has been disadvantaged. I can see your dilemma but you can’t predict the future and personally I would discount the compensation and continue your existing plans for equal savings for both DC. If in the future everything works out fine and both are doing well you can then consider whether you chose to help youngest with something.

That’s so sad. I would told relative to stick her money if they planned to be so unfair.

I wouldn’t even it up in this case. Your elder DC has suffered, and may well do in the future. I would see this money as a separate thing. He might need to draw on it for therapy.

In a different scenario I would- and indeed have - considered evening it up. A relative took out a savings account for my DS1 but not for my DS2. I’m not sure why not, but I have an 8 year gap between mine and she might well have forgotten. When DS1 was 18 she gave him the money.

On the other hand, DS1 was too old to have a child trust fund; DS2 got one. We transferred it into an ISA a few years ago. By my calculations it will be worth slightly more than the money my DS1 received from my relative. Allowing for inflation, they’re equivalent sums now. If DS2 had not had the CTF I would have given him the inflation adjusted equivalent of what DS1 got from my relative. It’s a few hundred pounds not thousands.

I would try to even it up if eg grandparents willed them different amounts as there is no reason why they should do that. Fortunately we’ve been told that all the DGC will receive the same percentage share of the estate.

This happened to my sister. She got in a very minor car bump (car only got scratched) and her and my mum got a payout of around 2k each as they were determined to have whiplash.

i wasn’t in the car as I refused to go to school back then due to bullying

I didn’t get any of the money and nor should I have. My mum didn’t give me an equal amount. I was very jealous but nothing I could do. I was 16 though, at your son’s ages they maybe don’t realise the significance of the money.

Don’t top up your son’s trust fund. For all you know your other son could come into money later or have a better job. That’s life.

I’d stop putting money in their trust funds and save it in a separate savings account in your own name.

Then you can decide when they’re adults.

Why do you have to decide now? Can’t you put the money away anyway and decide down the line?

I can see both sides of the argument and I'm not sure which one I'm on, but I agree with PPs who suggest deciding later. My DCs have JISAs because their grandparents like to give them money sometimes, but I don't save into them myself because I prefer other tax-efficient savings that I don't have to hand over control of to 18-year-olds. I've been a bit influenced by my own parents here: my DPs didn't save for us or really have a plan, I think, but they did support our transition into adulthood. E.g. when the first of us wanted to buy a house, they made what seemed like a sensible contribution to the deposit - then later equalised that for other siblings as needed. When the other siblings bought much later and needed bigger deposits, they evened up the first one. It's always felt fair and transparent to all of the siblings. They didn't discuss it with us as children, though, and we didn't grow up with any expectations of who would get what.