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AIBU?

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Original poster

Savings for DD - who do you agree with?

253 replies

StrangeOrJustInconsiderate · 04/08/2019 13:08

Name changed!

DH and I are currently in the middle of a disagreement re: savings for DD who is 8 weeks old.

We have already agreed that any child benefit we may receive (unsure if we qualify at the moment) will go into a savings account for DD. However we are disagreeing over whether to top it up each month or not and if so what amount.

Person A thinks we should add an extra £100 per month we can afford this and it will have no real impact on our current lifestyles. Our child will be living in a different world when they are older and any extra help cannot go a miss, they also think we would be able to control / help what an 18 year old spends the money on.

Person B thinks that with any child benefit plus the amounts we and others will put in at special occasions (we are not assuming this is already my mothers plan) there isn’t a need to top it up. Neither of us had a savings account for when we turned 18 and we’ve done just fine. They are also concerned about handing over a large sum to an 18 year old is a recipe for disaster. Person B also says if we do top up it should be a max of £10 per week.

Who do you agree with?

OP posts:
JeanieJardine55 · 04/08/2019 13:42

I would save it in an account in your own name and then it can be split equally (or as you see fit) between dd and any future dcs. I would open a separate a account for her into which you can put Birthday, Christmas and any other money gifts given to her and she can later add pocket money etc and have an account she can use.

missbattenburg · 04/08/2019 13:43

Personally I'm with Person B. CB plus special gifts seem like it would add up nicely and is easily replicated across multiple children.

If you then still want to add to it perhaps a seperate account into which you pay what you can with a view that it would be split equally among the children when they are adults(18/21). If you only ever have one child then they get it all.

dementedpixie · 04/08/2019 13:44

www.gov.uk/child-benefit/how-to-claim

You can fill in and print the form from a link on here

Isatis · 04/08/2019 13:45

If you would reduce the amounts saved for subsequent children, it seems rather unfair on them.

sophiestew · 04/08/2019 13:47

lola I think I would cry my fucking eyes out if my DC spunked a lifetimes savings on a big party wedding. What a waste!

Ninkaninus · 04/08/2019 13:49

A, definitely.

And it doesn’t all have to be handed over to them at 18.

Rezie · 04/08/2019 13:49

I would put £50 monthly as well as benefits and special occasion money and not have the account in the child's name. The parents can use that money to child related things such as new bike, drivers license etc. I wouldn't hand the money over the the child is 18 but keep it and give monthly allowance during university(or whatever they do) and whatever is left over give it to them when they have graduated and have a job or maybe give it when they ar3 planning on buying a house/getting married or something big. This way parents have saved the money for the child but it's not actually their money.

Purpletigers · 04/08/2019 13:50

It’s never too soon to start saving for a child and I think it’s a great idea to save for a house in this climate .
Considering the whinging on here about house prices and deposits , I very much doubt the pp ‘s child won’t want a house in the future .

Ninkaninus · 04/08/2019 13:52

Yes, I wouldn’t necessarily save it all in the one account - CB + gifts into account in child’s name to be accesssed at 18. Extra paid into ISA or similar to be accessed at 21/after uni/for first car/mortgage deposit etc.

Starlight456 · 04/08/2019 13:53

It depends on so much . Do you have your own savings?

I currently save nothing but am trying to up my pension as I haven’t had the money to pay into one for many years .

My son has a trust thing . I am sure he doesn’t get it till he is 21

sophiestew · 04/08/2019 13:56

I get you purple but if they don't earn enough to qualify for the requisiite mortgage then what would happen to that money?

I can think of lots of reasons why being quite so stringent could be a mistake.

My list of acceptable uses would be:

Travel
Education
Travel
Learning to drive
Travel
Car
Travel
House Deposit
Travel

Definitely not wedding!!!

prettybird · 04/08/2019 13:58

Not directly related to the topic but if one of you isn't working, then even if the other is earning more than the threshold that means that in effect you don't get any child benefit or it is all clawed back in tax, the one not earning should still claim in order to get the NI contributions, at least until your youngest is 12.

I think there is a way of claiming that means you ask not to get the money but still get the NI contributions - but my ds is too old now anyway so don't know the details.

Makemeaname · 04/08/2019 14:03

Is this likely to be your only child? If not, you need to think about what you could afford to do for any siblings as well so there's not resentment.

HaileySherman · 04/08/2019 14:03

Person A. No one regrets saving too much, lol. However, a good compromise (and imo a good idea in general) put it in an account that you can maintain control over, in case you wind up with an 18 yo who cannot and should not be given a large sum.

butteryellow · 04/08/2019 14:05

With rates as they are right now, don't save, but pay off the mortgage (assuming you have one - ignore if not). Keep note of what you've done, then when your mortgage is paid off you can save that extra amount too, having optimised the benefit from the spare money.

Sammy867 · 04/08/2019 14:12

We save all child benefit topped up to £100 per month in a saving account (so adding an extra £20 a month) and have done this since she was born. There’s currently around £4000 in there and she’s 3.5 years old.

The account is held In trust until she’s 18 but is linked to my current account (both our names are on the account and it’s online only so no debit card). My plan would be to simply not tell her about the account until we’re ready to give her the money. Ideally I want to give her it aged 21.

All the correspondence is online only regardless so there’s no reason for her to know it exists to access it until we tell her about it. It would be earmarked for anything she wants to do with it; hoping for a house deposit although we own our home and as our only child she would inherit our house regardless. If you had given me that money aged 18 I would have invested it so I hope I raise her right to be wise with money. My mum gave me £5000 for my 21st and I used that to help buy my first house.

The reason I want it in her name is it’s her money, so should anything happen to me or my husband as a worst case scenario then she has access to money that’s hers only (although our wills leave our 50% of our house to her with lifetime allowance to reside there for the other person and we both have life insurance etc)

Purpletigers · 04/08/2019 14:12

Sophie - if they couldn’t get a mortgage then I’d worry about that when it happens . I wouldn’t not encourage them to save because they may or may not get a mortgage in 25/30 years time . That’s idiotic!

Any travelling would be done on their own money too . I’m not saving my money for my kids to go swanning off around the world for 6 months .

Tiger - you can’t decide who gets cb on whether they may need it for nappies . Eg Two families both earn 30k a year . One family are sensible and have enough left to save their cb , the other family like to spend and have run out of money so are waiting for their cb to buy nappies and food . You’re seriously suggesting that the first family are less deserving of the cb .

TwistyTop · 04/08/2019 14:12

I think there's nothing wrong with adding extra to the savings pot, but I totally agree with person B that you should not hand over a large sum of money to an 18 yr old.

Can you keep it until they graduate uni, or start looking at buying a house, or announce that they want to travel around etc? They don't need to know that the money exists before you give it to them. Might be better than just handing an 18yr old a big wad of cash. They would probably waste it on crap and might actually be encouraged to make bad choices if it was a large enough sum. Suppose it depends on your 18yr old though...

kitk · 04/08/2019 14:12

If you can afford to save more I would, but not in an account DD can access at 18- I'd keep it in your name or in an account you control until you decide she's ready. You can't control/ influence what an 18 year old spends their money on and while you'll be saving with aspirations of her using it for a house deposit/ uni etc, it wouldn't be unusual for her to blow it all on holidays or nights out, even if you think you will bring her up to value money more than that

dreaminofholidays · 04/08/2019 14:12

I have also just had a baby & we shared your concerns about putting money aside and then it transferring to her when she's 18 and it possibly being wasted.

Turns out the Nationwide future saver doesn't automatically transfer to your child on their 18th birthday. I will hold it in trust until I sign it over to her. So we will build up a decent pot for her in there and sign over when the time is right. We will open a normal bank account with some money in there for her to spend as she chooses at an appropriate birthday.

Entirely up to you how much you put aside x

EdWinchester · 04/08/2019 14:14

A

We have bonds for our kids that mature on 18th birthdays. Our eldest used a bit of his to buy a car.

Shmithecat2 · 04/08/2019 14:15

Person B is BU. If you can afford to, why wouldn't you want to put as much as possible by for your child? Confused

Settlersofcatan · 04/08/2019 14:15

We don't save much in our children's names. We save generally for all of us - hopefully most of it will go to the kids for education/travel/house deposits but I don't see the point in giving up flexibility by having it all in their names. This way, if we need it for another purpose we can use it for that purpose.

gabsdot45 · 04/08/2019 14:16

Person A but she doesn't just get it when she's 18. It's earmarked for university or a house deposit.

Rhubarb01 · 04/08/2019 14:19

We have three children. We set up a savings account for each in their name, but under our control. We started them off with a small lump sum and have then saved a regular small amount each month. Whenever they were sent cheques as birthday or Christmas money, this was paid into their accounts. Most cash presents they kept and spent on whatever they wanted, although occasionally some was paid in as well. The eldest child is now 18 and has her own account, but has chosen to leave the money under our control for now (it's not a vast sum, but it would be handy if needed). However, she knows she can have the money should she need it for something. We've always tried to encourage the thought that it should ideally be used for something substantial, and she's pretty sensible so I don't think she would spend it lightly. However, if she wants it transferred to her then she has a right to it and we will do so. Unless you want to legally tie the money up until your child reaches a certain age, I think the best you can do is give some guidance and encourage a healthy attitude to spending money and saving it. Good luck with your little one.