MIL keeps asking about children’s savings accounts

Obviously opening kids accounts in their names so they can blow the cash at 16 is a stupid idea. I save for my kids in my own name. MIL needs some common sense.

Its not just the tax you also need to consider what would happen if you ever needed to claim benefits. That money would count as your savings and potentaily make you ineligible.

Agreed.

Many years ago I used to give money to my Godson via his parents. He should have had a decent five figure sum by the time he turned 18... except there was nothing. The parents had spent it all already.

I can see where your MIL is coming from. I'd be the same now.

I’m with you, I also save money for the kids in an account under my name so I can get a sense of how sensible they are before they get it instead of it automatically going to them at 18! (Currently have a toddler and a newborn and would say they’re both very unreasonable 🥲)

I did relent though and set up a JISA for each of them too which the paternal grandparents can pay into directly. My parents happily trust me and don’t care that money they give to their grandchildren is still under my name.

Honestly, you don't sound trustworthy at all. The children have now got their own accounts, but you've given MIL the details of the account in your name?

I nagged my daughter to open JISAs for my grandchildren too. It took her years to get round to it. Years when I could have been putting a monthly amount into those accounts. Obviously had I known from the off that she'd take years I could have done something differently, but every time I asked, she was 'about to do it'*. So I'm team MIL.

*I love her dearly, but she could procrastinate for Britain.

Yes or upset that money they saved for their kids will count as savings that reduce the amount of a benefit claim

It sounds like your child's grandparents have been generous and sending a monthly amount, not as a birthday gift.
From the OPs description it sounds like the MIL is questioning where birthday money goes (which might not be that much) and isn't thinking of actually saving money for the child.

I don’t know why she thinks she can dictate what the children spend the £50 birthday money on. In today’s society it is not much, they’re really young children, cash in a card to a child that young for their birthday is crass in my opinion. Buy them a gift, she can save separately for them if she’s worried about it in her own account.

@bysy because that happens. See it on here quite often, asking if it is okay to raid the kid’s savings/birthday money.

Have you transferred the money you have in your account into their accounts now?

I don't know why you didn't just set up accounts for them. My children's grandparents have a little standing order into their named accounts and it will give them a nice bit of savings when they hit 18.

What you do with money you save is one thing, but it's reasonable for people to want to set up a way to give directly to the children

Set up accounts that will be worth having. It's such a shame endowment policies disappeared tbh, so ask a financial advisor to help, then ask family to send money there.

Are you less well off than SIL and so Mil thinks your spending the kids money? If so she's OOO.

But, I don't get why you were being so difficult. Remind MIL of the account info. Ask her to transfer £ directly in.

YABU by not setting IP accounts initially, that's what's caused this.

But sometimes it needs to be in the 'pool' of money to actually give them the gift. Presumably people give money as they aren't sure what to get or so that the money can be put towards a bigger item.
Perhaps I am forgetting that on MN people don't just give a token £10.

Do the kids get to spend it?

No tax is paid on an ISA in the child's own name. If it's in an account in the mother's name, then tax is paid on any interest if it's not an ISA. If it is an ISA then it depletes the mother's own ISA allowance.

Then there are the complications if - God forbid - anything were to happen to the account holder.

ETA That was in response to @Mithral .

Have you moved all the money you’ve been putting into your own joint account back into their own account now? Because it doesn’t sound like you’ve been using or saving the money for their treat things. Sounds like you’re using it for everyday expenses. It’s their birthday money. It’s not for your everyday expenses.

It depends what your plans are for the money.

DD has an investment account since birth, my mum and the PIL gave a lump sum and topped it up all the time and that was always designed for her when she turned 18. She knew about it and hasn't cashed it in yet, you can teach a child how to save and invest.

We have a separate investment account in my name for university funding.

But money like birthday and Christmas - that is for fun or when they are younger for maybe a larger purchase like garden toys, annual membership, paying towards a non-mandatory school trip like skiing. So I would park that money on an account in my name and definitely not as an investment account/restricted access.

When DD was a teen she got a normal saving account where she saved part of her pocket money for herself or put the birthday/Christmas money there. At that stage she got all money payed directly into her current account she has since she is 11.

Yes this.

To me it depends on how much MIL is contributing or is thinking family give. From my own family (which is small) my kids get around £130-£150 for birthdays/Christmas. £30 of that is the in laws. Not really a long term investment and in lieu of a present gets spent. It's also not realistic to expect even half of this total amount to be saved. Buying a switch game for example is around £40-£50 so they wouldn't be able to buy much.

If MIL is going to be blunt about continuing to ask about the account I think I would be blunt back and ask why she is so insistent on it and what contribution she is going to make to it.

Speaking as someone whose DD blew every penny we’d saved for her as soon as she turned 18, I wish I’d have saved it in my own name even if I’d potentially had to pay a bit of tax on it.

Which means you have access to their money. Not normal.or ok

I am a grandparent who has done that. It’s actually quite complicated and you need the birth certificates and permission from the parents. And you cannot set up an isa for grandchildren, which is often the better account for them.

I get that your MIL can't understand your logic, as I don't. If you send someone money, you want it to go into their sole account. It's nice to think you are sending their birthday money straight to them and it isn't going into some pool of money.