To not save for DC?

[AtSea1979]

We have a reasonable lifestyle at the moment, don't home own but tick over with a little spare.
Spoke to the bank, wanted to set up a saving account for the DC but their policy is it automatically gets signed over to them at 16 which I don't want.
Spoke to my parents about it and they seemed surprised that I wanted to save for them.
They never saved for me, I've always worked and paid my own way through uni/life. It got me wondering should I even save for them? Does everyone these days with rising uni/house costs?

We have been saving our child benefit sine DD was born. This is in an account in my name so if we should ever need to touch it we can, however when DC are 18 whatever has accumulated will be divided between them. Like others I was advised against Junior isa. Their words were as much as they are your little darlings now they could grow up to be anything and throw your money down the drain. And there's nothing you can do about it as legally it's theirs at 16.
My parents (who earned a fairly low-average income back then) saved for me and gave me £2500 to buy my first car, £5k towards my first house deposit and £5k towards my wedding. All of which was a huge help and hugely appreciated. I'd like to be able to similarly help my DC in the future.
Think it's personal preference though. You are not obliged to save for them.

My parents saved some for me into bonds for when I wanted to use it, but also larger sums in their own name for milestones eg driving, wedding, further education, house. No reason why it has to be in DC name.

we save into a family pot
i'm sure that if the cash is there I'll help DC with larger expenses of my choosing - first car, rental deposit, kitting out a flat.

firstly I don't want them to fritter £££ away on tattoos and tequila at 18
secondly I'm guessing that out family finances are perhaps not in the same bracket as some who've started pensions for their DC. I'd feel like a right prawn not being able to fix a leaky roof while having money locked away for the DC that I can't touch. This way any savings go to whoever can benefit the most in whatever way.

I had one and got the money at 18 and pretty much wasted it.

I was diligently saving for both my DC in their own ISAs then it struck me that most 18 year olds will piss it away. So I put more into my own savings pot, which has got better interest on it anyway. Given that most people don't move out and start their own life at 18 anymore I figure any savings will be better off with me, and given when they need it.

If it's in the child s name, they don't pay tax on the interest. So I have mine held in trust for them until they are 21. Of course I can take the money out and use it for them / give it to them before that date.

If it's in your name and you have another source of income that takes you above the minumim threshold , you will have to pay tax .

That's my understanding as a non financial person.

I'm another parent who wouldn't be happy putting in in their name to have at 16. You can do the best possible job bringing them up and still have them go off the rails a bit as a teenager.

Also they might have a BF or GF who says

" it's your money, how dare your parents tell you to spend it on a deposit for a flat / university fees , let's buy a sports car / take all our pals to Lanzarote"

I confess that when I was in my mid 20s ( so not exactly a teenager) and saving for a deposit on a flat, my BF at the time tried REALLY hard to get me to spend it on a caravan his mum was selling " as an investment ".

I wish I could tell you that I dumped him straight away, but I didn't . No MN then to tell me about red flags.

I did LTB a few months later. But it would have been so easy to go along with it . Everyone said what a great guy he was and how lucky I was to have him .

So I am not misguided enough to think that I can guess when they are born what my kids will be like at 16 .

Also my counsins got about £30k each in their early 20s when a relative died. This was about 25 years ago so it was a lot of money then .

One spent it on a round the world holiday for him and his mate.

One spent it subsiding her career in the arts ( a proper job but paid below a living wage ) and bought a sports car .

One used it as a deposit for a flat in London and to fund him through a postgraduate degree.

Guess which one is well off now in his 40s and supports a partner and 4 kids only working part time ?

People saving for kids do not need to do it their name.

Over and over again. It has been said so much on these boards. That does not mean you don't save for kids at all. Just not in a junior ISA is all.

Saving for kids does not mean enabling them to a life of worthless dependency. It means raising great kids who can then be given massively useful legs up at key moments to enable them to do even greater than they would on their own.

Over and over again.

I didn't save for my DCs - neither of them ever showed interest in further education/uni anyway. I did pay for some driving lessons and bought a car for my eldest though and will do the same if my youngest (20) ever decides she wants to drive too.

After a read of these posts I think I might rethink the junior ISAs that we currently have.
Will look at options in my name instead, thanks everyone

Isa's have few tax advantages now because 1 interest rates are low and 2 as i understand it, everyone gets a £1000 tax free allowance now. Xxx Muppet

Mum and Dad saved for me which was great when I chose to leave home. I save £30 a month for DD. My DF has also set up some bonds with NS&I for all his grandchildren, about £500 each.

Just transfer the money back to your account the day before they turn 16.

You only get £500 interest tax free if you're a higher rate tax payer, and ISAs tend to have better rates than normal savings accounts because banks know people are less likely to take the money out.

Using ISAs is good discipline because we are less likely to want to lose the tax free status so it helps us save. And the £1000/£500 tax free thing is bound to get scrapped before very long but there will pretty much always be some kind of tax free savings vehicle, even if not an ISA then something similar an ISA could be transferred into (remember er TESSAs, the previous incarnation!?).

^^ no! junior ISASs don't work like that, you cannot decide to take the money out unless death or terminal illness of child occurs.

Saving into child trust fund and have started a pension for ds because the sooner you start saving, no matter how small, the more you get later

Sorry meant carried on child trust fund money in an isa. More important I think to get a pension started though

When we are in a position to, we will save for our children.My own parents aren't rich but gave me a little financial help when they could as 'we want to be alive and watch you enjoy your inheritance'. I will also start a funeral savings plan soon so they won't have to pay for our funerals when we die. My friend recently had to cough up £5000 of her savings to pay for her MIL's (who she never got on with) funeral. MIL's own children pleaded poverty and it caused a lot of family resentment.

Who are you shouting at House?

If me, I just meant ISAs as a general concept, replying to whoever above said there were no tax advantages to them any more. I know you can't touch the money til the 'child' is 18 (and it is theirs).

No savings for my DC they'll hopefully be able to look after themselves and know if they need any help we'll be there for them if we can.

I have a savings account for holidays and Christmas because I dont want DH spending it on coffee and bikes

We do in our family, my grandparents recently set up a trust fund for my newborn twins where they have a direct debit of £100 for each twin going into a savings account so with interest they will have £25,000 each on their 18th birthday towards a deposit for a house. They did the same for me growing up and it was a huge help.

Whilst it's lovely that they've done that - we could never afford too. We put about £50 into an account each month which will end up being shared between them one day.

I think it's nice to put something away even if it's just £5 a month it all adds up, but no more than you can afford to! It's all relative to what you earn and your lifestyle.

outtogetyou I didn't even see your post! I suppose you typed yours at the same time I typed mine.

My post was in response to the person who posted just before you, so their post says something like close the account the day before they are 16 or similar.

And third, what's with "shouting"? I added the ^^ to indicate it's to the post above mine (which cross posted with you). So not sure with the shouting. Internet shouting is done in capital LIKE THIS and I haven't done that so quite confused really.

We would love to put money away for our children or to help them now, as we have older and younger, but we are a big and blended family and things are often a little tight. It was much easier when I was setting out into the world. I don't know how some of our DC will ever get on the housing ladder now. I would say if you can help out and save for them plus encourage them to do the same it will be such a boost for them.

Both dc have savings accounts for birthday / Xmas money. Dd1 gets £10 pcm from her godfather and PIL, as will dd2 when she turns 2yo. We don't put anything in except at birthday / Xmas when we suddenly get a pang of guilt for not contributing!

I agree with pp about family finances. At the moment we are just getting through the "two lots of nursery fees" stage, once they're at school we can think about moving / paying off the mortgage etc. I'd rather be in a position to help them when they need it than give them a huge lump sum and expect them to make the right decision.