If you’ve got multiple children (particularly if there is a big age difference) how do you make sure that their savings are fair?
I have 2 children, with an 8 year age gap. There is a savings pot for each of them, and I pay in a small amount each month for both children, and any birthday / Christmas money also goes in there, along with any ad-hoc financial gifts from family.
Currently these pots have totally different amounts in, for a number of reasons:
- eldest has had money paid in for a longer period of time.
- eldest has been earning interest for a longer period of time.
- eldest received some cash gifts from relatives before youngest was born (relatives who have since passed away, so no equal gifts to youngest).
- two different account types with different interest rates.
So, as it stands, eldest is likely to end up with more money, and I’m not sure that I can guarantee that I personally would have enough spare to ‘top-up’ youngest’s account to the same level; leaving youngest at a disadvantage. This feels unfair to youngest, but it would also feel unfair to eldest if I were to stop making my own monthly contribution to both savings pots.
Obviously, if I stop paying into each pot when the child turns 18, then youngest could catch up. Potentially, youngest could even over-take eldest if I’m in a better position and my monthly contributions increase, but there are no guarantees.
On top of this disparity, I’m also wondering how the age gap will have an impact. When I originally started saving for eldest, I hoped to save enough to be a deposit towards a first home. But with an 8 year age gap, even if I give them both the same amount, the younger one will get less value from it due to inflation / rising cost of houses.
At the moment the money is all legally ‘mine’, in that it is saved in my name, which I have done deliberately so that I can decide when to give them the cash (not automatically at 18), but I have mentally always considered it as being a savings pot for each child.
Would it be best to just pool all of the money and dish out equal sums in the future? Or would that be wrong, because it would essentially mean redistributing the existing savings, some of which has been gifted by other people?
I just want what’s best for both children, and for them to feel that they have been treated fairly and have no cause for resentment between them.
*just to add - we’re not talking massive amounts of money here. A few thousand at the moment. I’d love to give them a decent house deposit each, but that’s an aspirational goal, and I may not get there, depending on how the next decade goes.