Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Flip

Original poster

to think this is a BAD idea

16 replies

Niceguy2 · 01/04/2011 16:32

Children ISA

OK, so the govt have decided to scrap child trust funds (CTF) and this is the replacement. No problems with that. CTF was a stupid idea to begin with.

At first glance this seems fairly sensible. Give parents the option to save up to £3k a year tax free for their children's future. Particularly useful given if you want one day for your child to go to Uni one day and need to save.

BUT.....

Apparently parents cannot access this money and the child can access that money at 18.

I can just imagine at 18, my child getting £100k+ (using their examples) in an account. My DD is 14 and very sensible but I suspect if I gave her a large pot of money on her 18th, her priority would be to get drunk, go on holiday and probably get a car. Investing the money for her education/mortgage/whatever would probably be low on her to-do list.

OP posts:

GeekCool · 01/04/2011 16:36

To get around it could one not save in a normal ISA or is this to allow for extra? I'm easily confused.

NinkyNonker · 01/04/2011 16:36

I would love to say I'd have used it wisely at 18...but I really don't think.I would! I guess they're hoping it'll be used for university fees hence not making it older, very difficult.

NinkyNonker · 01/04/2011 16:36

Extra I think. So you can have your tax free allowance and another for your child.

strandedpolarbear · 01/04/2011 16:36

This reply has been deleted

Message withdrawn at poster's request.

speffles · 01/04/2011 16:40

I don't want to say YABU (I was a bit of an idiot at 18) but I think that it would be their money and they are young adults. We are all more financially cautious than we used to be and, hopefully, that will be passed down to the next generation/s. If they are going off to university then they will already have had to get their heads around the idea of taking on an enroumous debt so might be a bit more money wise than I was at their age.

speffles · 01/04/2011 16:41

enroumous? Still a bit of an idiot then.

NinkyNonker · 01/04/2011 16:41

Well it is actually the parents' money, isn't it Stranded?!

CoventLondon · 01/04/2011 16:41

There are other ways of saving money. My children have 5 figures in their savings accounts but they don't know about it and won't be allowed to drink it away or waste it.

amothersplaceisinthewrong · 01/04/2011 16:42

£100K at 18 will go straight down the throats or up the noses of many 18 year olds!

Tee2072 · 01/04/2011 16:47

Just like CTF, that goes/went right to the child as well.

I would be amazed if it's as much at £100k though. Not the way the markets are these days.

Ormirian · 01/04/2011 16:47

Stupid! Even if the child was hugely sensible they'd still probably spend a load of it on a car and it's be gone in a few years. 18yr olds don't need lumps sums to spend freely.

Original poster

Niceguy2 · 01/04/2011 17:29

I remember years ago with an exGF. Her mother had died and the family home was sold and the money split to all three daughters. The youngest being just 18 and a bit of a tearaway. We tried to see if there was a way to change this to later but of course there wasn't.

She got the money (about £25k) and blew it all inside a year. She was surrounded by undesirables and her BF was so notorious that the police came to warn us. Once the cash ran out, her "mates" all disappeared into the ether and the only thing she had to show for it for half a car (the other half was on finance!).

That's why my will says my kids won't get anything until they are 25 although my executors can spend it on their education earlier if appropriate.

OP posts:

Triggles · 01/04/2011 17:39

That was really the main reason we didn't put money into the CTFs, as we didn't want our boys to get the money at 18 and blow it on partying and such. Sounds like the government hasn't figured it out yet. Good grief.

supersewer · 01/04/2011 18:02

We have just set up isa for our dc, in our name, I wouldh rather pay the tax than gift them thousands of pounds at the worst possible age, i want to maintain some control

Bonsoir · 01/04/2011 18:18

My DD (6) has three savings accounts. She has EUR 150,000 invested in one of them and capital sums will be added to it in the near future; she has smaller amount in the other two, but she should have at least EUR 300,000 by the time she is 18. She cannot access the money without talking to a financial advisor, and she may well have to pay her own way through university with that money. I trust she and her financial advisor will know what to do for the best.

trixie123 · 01/04/2011 18:26

no different to how the CTFs were set up. I agree that it is probably not a great idea to put too much in them but I imagine the thinking behind it was that the original £250 contribution from the gov would not be able to be purloined by parents for themselves and anything they put in over and above that was down to their choice.

Flip