To NOT save money for my DC in their own account?

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After a conversation with a friend, I genuinely wonder if IABU here. Obviously lots of people aren't in a position to put money aside for their DC, but I was wondering if we are alone in being in a position to save for them, but deciding not to. My reasons are as follows:

1. I want them to learn to save for things themselves when they're older, not inherit money as such until they've learnt some money management skills

1. Other costs and essential things can be met from our savings account in the meantime. If we want to give them money in the future for things like school fees and a house, this could (in theory) also come from here. We're fairly good at saving ourselves and saving in a kids' account would come at the expense of our bigger savings account

1. I'm worried that they'll be like some people I knew at uni who got their savings accounts and blew it on booze etc

My DC are 2 and a baby. The 2 year old has a tiny bit of money in an account (50 quid) as it was gifted to him, but I haven't even opened an account for my baby yet as no-one has given her money.

AIBU?

I think if you can afford to you should put some away.

Would help them at uni, or their first car, driving lessons...

I don't think you're unreasonable not to want to put it in their names but I would, personally, ensure my children had savings available for them - if this was in an account that was technically mine but intended for them, I think that is fine, as you state in your no2 :)

If you're saving anyway then I don't see how it matters which account it's in? I might be missing something though...

Yanbu.

My friend had £30,000 in her saving account. More than enough to set her up for the future. She is now in debt after long hoildays and every weekend out with new clothes.

Hmm, I don't think YABU OP but I've been pondering this myself. I've got just over 80 quid cash (was gifted to my son 1 yo) and I've been debating keeping all savings in cash at home or opening a bank account. We aren't in a position to help him buy a house or anything later as have no savings of our own. Perhaps you could just open a bank account for each dc and only deposit money they're given as gifts?

I have savings accounts for both my children inspite of the risk of them blowing it on booze at 18. Children's ISAs/ child trust funds give a better financial return than adult accounts. I hope to impart some financial management skills to my children before they get to 18.

Ds earns money singing at weddings so has more clue than average about the blood sweat and tears required to earn money.

We're not. PIL seem to think we should be setting up a dc savings account, but I reckon the money is far better invested paying off the mortgage at the moment - don't see that tying up money in dc's name for years would be all that helpful. That means that when it comes to cars / uni, we'll be able get to help dc out. I reckon a savings account when they're old enough to have pocket money /an allowance or even old enough to decide to save any money given as presents should be fine.

We save for our baby as you never know what the future will hold and we decided that we might not want to give it to h but it might be useful to help pay uni fees etc.

It's up to you how you do it, as long as there is going to be something there for you to help them with when they are older I don't see a problem.

My dc have savings accounts that are in their name, but can only be accessed by me, even when they turn 18 because it's linked to my account. Money they are given as gifts goes into their own accounts that they have access to.

There's whether you should save for them and how you do it.

If you can and might like to, you don't have to out it in an account in their name. You can use your own ISA allowance, then you retain control and get the best rates. That's what we've done, as GPs do give gifts intended for a university / setting up for life fund.

While I'd like to think dd will be responsible and mature, 18 is very young and any account in her name would legally be hers then. I met enough 18-25yos when I was one to know that they don't always think long term, can see money as more and longer-lasting than it is and may not have very adult ideas about the difference between investing and frittering.

I'm really pleased that ours have had savings accounts since they were a week old.

Now that they are contemplating university fees, independent holidays, driving lessons and various other expensive things, they are happy to know that they have money available. Both are very clear that it's not for frittering but for large tangible things.

For tax reasons you are better off saving in their name. But I too am worried he will just blow it when he hits 18 (if he is anything like his father)

Currently pondering a number of options to get around this.

Two different accounts one they know about and one they don't as I think it is good to have an account they deposit birthday money in to learn importance of saving - risk of them find out about one they don't though

I think you can get accounts where you have to sign to let them take money out - think Virgin does one -but might not be best interest rates around - perhaps could transfer into one of these at later date ???

Pension - apparently latest thing - compound interest means the same amount saved from 0-18 is better pension save from 18-55 ( or something along those lines) . But does seem a bit extreme - and still no savings for deposit on house etc

Anyone got any better ideas/ care to elaborate that knows more than me?

But I agree that it's worth examining the numbers. You're likely to be paying more in interest on a mortgage than you gain on a savings account, so you would save more by paying off the mortgage faster.

I suppose it's partly about whether there's a need for careful allocation and your general financial responsibility and planning. Will you expand your lifestyle to demand a higher income as your mortgage diminishes, or will you save the difference?

Debt repayment aside, saving from an early age gives you the best possible value for the money, because of compound interest over many years.

Only better in their name tax wise if both parents are already using their own ISA allowances to the full. If not, use that.

Anything in their name is theirs at 18. There is no way round that.

You don't have to tell them what sort of amount is in their fund. Just say you have something saved to contribute towards university or important things as you see fit but it won't pay for everything and they need to save and plan too.

YANBU. We put all child benefit into a child trust fund. This was DWs idea. I don't like it because we don't know how sensible DD will be at 18, I'd rather set it aside in a parental account so we have some control.

I saved the child benefit for years and out it into their accounts. They now have healthy balances. Unfortunately I have tried to bring them up to be careful so they are now terrified of spending the money. No bad thing I think.

I was going to make the same point about better interest rates and less tax on kids' savings accounts too, but also that you can save in their name but withdraw it later. Unless you use an ISA you aren't tied to handing the money over, so you can access it in an emergency, or to pay for a school trip or something extra like that.

I think it's always a good idea to save for your kids if you're able when they're small. Nobody knows what's going to happen in the future and you, unless you're mega rich may not be in a position to provide for the things that you take for granted now when they are up and ready for the world.

I used the savings account started by my parents to put a big deposit on my first house, which saved on interest rates.

I have started one for DS, now 9. He knows that it exists and I hope he will used it just as wisely. If not, his loss.

"Only better in their name tax wise if both parents are already using their own ISA allowances to the full. If not, use that. "

My son has a junior isa paying 6%. As an adult you would struggle to get a saving account paying 3%.

It's entirely up to you - from what you say in your OP, it sounds as if you have a lot more money than us and will perhaps be more easily able to fund things that a lot of people couldn't, out of your day to day income anyway.
Speaking for ourselves, by ds is 17 and learning to drive, and has been very, very, very appreciative of all those £20 notes that I put away for him when a relative gave them him for birthday or Christmas over the years. I think (hope!) he's finally beginning to see that if you save a little bit regularly, then it really can build up into something useful, and that's a good lesson for them to learn.

I'd save it in your name, and give it out for specific things later. Driving, help with uni, house deposits, even weddings if you feel like it.

Not full access to blow it.

we put the child benefit into an account. usually top it up to 100 a month. driving lessons,uni,gap year etc will inevitably occur and we'd like to be in the position to help when needed

I have an account for DS but it is in my name and he won't know anything about it until I choose. That may be anything from a car to house deposit depending on his situation at the time. I have no intention of just handing it over at 18 for him to do what he likes with it.

My parents didn't do savings per se for me, whether they have for my younger sibling I don't know. But it didn't really matter because they did have general savings, which could be used to help me out/pay for unexpected outgoing at various points when I was younger.

Like you they were keen for me to understand the value of money and earn it for myself without ever having the "oh I have savings" fall back. I know a fair few people my age who did have set savings they had access to, saved for by their parents. They were and remain significantly more careless with money than I am, at 25.

As long as you have the money somewhere it really doesn't matter than it's not in your children's name in my opinion.