AIBU to avoid junior ISAs because children get access at 18?

Mine missed out on the free trust funds just (so weren’t eligible for many accounts) but we saved money with child saver accounts which were in my name with them nominated, it didn’t automatically revert to just their name at 18 so i continued to control it until they left university and the (very little) remaining balance I transferred to their current accounts

We regularly paid into a junior ISA for DS for a few years, then stopped. We save 1/2 of his birthday and Christmas money into it now. Once he was old enough to understand what we're doing, he agreed it makes sense.

I used the fact that they had ISAs and NS&I child bonds to teach them how to be sensible.

From age 7 I showed them the account, how much the interest grew, demonstrated how compound interest works... in comparison to birthday cash in piggy banks which did not grow.

It was all accompanied by 'it's good that it is growing because it would take you so long to save this up again and this can be towards your house deposit or driving lessons etc....but what would you like to buy / save for with your pocket money / birthday money'

Luckily it has worked, and they continue to be sensible, continuing to build up savings now they are working.

You could do this with some, while keeping an account in your name with the rest?

Unfortunately teaching your child financial management doesn't always work.

My younger child is very sensible and I would trust her completely to manage her funds well.

My nearly 18 year old is an impulsive and dopamine seeking ADHDer who is also autistic. They know the theory of sensible choices but it doesn't mean they can manage it. Their maturity level is around 12 years old.

They'll find out about their ISA soon and I do hope they'll keep it invested. The steps required to encash it are likely to be the funds best defence right now. Luckily it's a smaller part of the savings in place. I'd be extremely worried if it was more than the few thousand it currently is. Sadly funding cosmetic surgery would have been a real risk with more money. Thankfully it's not enough. I didn't expect that at all when they were younger.

I have my children’s savings in my own name for this very reason, if anything happens to me my DH knows that the money in that account is the children’s money to split between them at a point he chooses.
Its mostly made up of monetary gifts that were given by family when they were born, birthday/Christmas money when they were small and didn’t need anything and money that their Grandmother sends me each month to use for them, which I don’t always spend.
My oldest ones (secondary school age) get give their birthday/Christmas directly into their banks now from their relatives.
They manage it themselves and both are pretty good at saving for things they want over the year.
My little one still gets his birthday and Christmas money put into his savings as he doesn’t really need to spend it.
I think it depends how much you’re planning on setting aside, anything more then the low 000’s and I wouldn’t let them
access it at 18, my Cousin blew 12 000 in a year at that age 20 years ago, it’s been used as a cautionary tale since then for each of us having children 😂

The provider will write to them.

I’ve seen this mentioned quite frequently on Mumsnet… but in reality they would only be able to spend it all freely if they knew about it. I get that it’s their money at 18… but if you thought they were going to spend it all in 6 months surely you just don’t tell them about it. How else would the find out?

what am I missing?

The provider will write to them.

YANBU to not do this if you’re not confident how sensible your kids will be at 18. Maybe revisit the idea when they’re a bit older.
Other parents may be reasonably sure there kid will be prudent with their own money and so may make a different decision. If they’re likely to be going to uni, having some money which is theirs for anything they need beyond what the loan at that point may provide may be very useful.

Nope I disagree. My (now adult) children are financially educated and understand that the money they came into at 18 was a stepping stone to adulthood. They haven’t squandered it. Hopefully because I taught them well. Infantilising them helps no one.

We have saved into JISAs but not told them. They basically have no idea of the existance of the money…. We will tell them in due course that it’s for a house desposit etc

Yes. My dc were sensible with theirs At 18 they're an adult

I completely agree. I set up a separate savings account in my name that I pay into each month - this is money saved for my DC’s future.

I did set up an account in DC’s name that they will get when 18, but this will only have around £2k in it. It’s enough that they can use positively without being too much too young!

I just looked this up. It is a bare trust. Beneficiaries of a bare trust can legally demand their entitlement from maturity (deemed 18). So if he wanted the money at age 18 and a half (that is when the account 'matures') you would be acting illegally to refuse him.

honestly i agree. That's why I haven't saved any money for my daughter in premium bonds (that she could access when she was 16).

I did set up a £30 monthly payment into a junior isa last month, but I figure 7 years at £30 a month isn't going to be a huge amount, but its there. But the main savings I have is absolutely in my name because I don't know what she'll be like and I'm not risking it.

I remember when I was 18, my mate was given £5k when she turned 18. Her birthday was in the June. By the christmas, it was down to £1k because she was wasting it on nights out and just buying crap.

That's exactly what I don't want.

If the account was until they were 21 I'd be more inclined to put it in her name. There's a huge maturity difference between an 18yo and a 21yo

I maxed out on a JISA for my DS for several years, meaning that at 18 he had enough to fully pay all uni costs for the duration of his degree. I involved him from early teens, told him what the money was for, and together we got excited about how much compound interest the money was getting over the years.

He's going into his 3rd year soon, and often tells me how very grateful he is that I did this for him. (He also has a part time job, so he's definitely not spoilt and grabby either). It taught him a lot about saving and interest which will stand him in good stead through life.

I don't regret paying into a JISA for a second.

Yanbu.
And if you're on univeral credit you have to move it to your kids names or else it counts as the parents savings.

I've moved my kids money over and it honestly worries me sick knowing it could be wasted. They shouldn't be allowed it until 25 21.

We have a Future Saver account with Nationwide which I am in charge of until I deem he is mature enough to handle it. He wont just receive it all when he’s 18. I’m hoping it will help with driving lessons and a car. Or uni, depending on where his life takes him.

DD had a child trust fund which matured when she was 18 with about £12k in it.

We talked her through her options and she put the lot into a S&S ISA with a separate bank to her student accounts so it doesn’t come up when she looks at internet banking but she knows it’s there for when she wants to buy a house.

Ds is planning to do the same.

I am putting a little into a junior isa, I think it will likely go on travelling, driving lesson, something like that. A small gift to send yhem into adulthood, not going to be big amounts.

I think it is tax efficient if you are maxing out your personal isas and saving for uni fees for example. But otherwise not worth saving a lot in there.

Correspondence should start being directed towards the child at age 18. You don't want to be going all Vernon Dudley on them

The most important part is the financial education of your children. 18 year olds can be perfectly responsible with money but they need to have a good sense of what their future requirements are for that money. Talking about money with children is important even if you don’t do the isa. If you treat them as if they cant be trusted it’s a self fulfilling prophecy.
i have two 18 year olds who have their university accommodation money in their own accounts and have not yet been tempted to spend it all on alcohol and handbags. They also understand what the consequences would be if they did! We did a lot of financial education growing up to prepare for this situation.

I agree OP. All our kids' savings are in our names currently as we didn't want them having automatic access at 18. DC are neurodivergent and currently have no clue about money management, obviously I hope that changes by 18 (and will work on it with them) but need to be prepared in case it doesn't.

These are the questions you need to ask yourselves when making provision. People like junior ISAs because it provides them with a further £9,000 ISA allowance where growth and withdrawals are tax free. But the downside is they cannot get at themselves (legally!) and the children have full access at 18.

Trusts are an option but even if the trustees wish to retain monies in the trust, an of age beneficiary can sue for the money. Plus trusts require certain duties from the trustees and must invest with the sole purpose of providing for the beneficiary (there was a crazy thread a while back where the mother and trustee wanted to pay off her mortgage with the trust she managed for her son!) Some people find this onerous.

Another option is to simply earmark a pot. And gift as and when you see fit on your terms. This way you retain full control and can keep the money if you change your mind. However, you miss out on tax allowances, growth/interest/income will be taxed against you, and lets be honest, in a lean year we may well decide to raid it to pay for the holiday or whatever with the intention to repay that never quite materialises. Plus, it will stay in your estate should IHT become an issue.

Lastly, pensions. Well its a nice idea. But the issue here is that young adults need help now. Cars, education and property are so expensive, and pensions cannot be accessed until age 57 from next year. By that point you'd hope that they'd have a career of their own and possibly inherited. Arguably the money is better used as a leg up early in their adult life.

In conclusion, there is no perfect answer, only best fit solutions for your objectives.

All options bar earmarking the child is likely to be able to access their money whether you want them to or not. The best option is educate them financially and give them the tools to make their own sensible decisions.

My friends daughter has wasted all of the money in hers as she had access to it at 18, she won't have a house deposit or anything now