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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
flowery · 04/08/2019 14:41

”They are also concerned about handing over a large sum to an 18 year old is a recipe for disaster”

Why would saving £100 a month for your child automatically mean handing it over at 18?

The question of whether to save, how much to save and in who’s name, are all separate.

Cohle · 04/08/2019 14:42

I would save the £100 but not put it in DD's name.

DingleyDells · 04/08/2019 14:42

Any savings account can be in 'Parent's Name as Trustee for Child's Name' so you are the one who has access to it, not the child. Once they turn 18 you are the one who decides where the money goes, not the child.

Alternatively a cash ISA or other regular savings plan.

Make sure that the provider knows that interest is to be paid gross.

Why don't you pay in £50 a month until they are 18? As and when another dc arrives, then pay in £50 a month until they are 18. They will end up with the same amount each.

Put the child benefit into a separate savings account in the joint parents' names. That can then be used if your dc is talented at music or sports etc, otherwise it can be divided up later.

BackforGood · 04/08/2019 14:43

Only read Pp1 and 4, but my twopennyworth (I have one just about to tun 18 and two who are older) is, whereas it is nice to give them a couple of thousand at 18 - first car / insurance / some travel, whatever - I wouldn't give them huge amounts at 18. Young adults mature a LOT between 18 and 25.

My second thought is, if this is your first, will you be able to afford the same for subsequent dc?

My thinking is that it makes more sense to pay off all your mortgage etc as early as you can, and then you have 'spare money' available when they reach that age.

chocpop · 04/08/2019 14:43

A. I had savings put away for me when I was a child and I used them towards buying a car & a deposit on my first home. My mum had made it clear to me that these savings weren't for holidays or silly purchases, they were only for things like a car, a deposit on a house or a masters degree and so on. I was totally fine with that- I had a job at uni so used that and my loan to live off quite comfortably and never touched them.

You could always save the money and not let her know about it, then when she goes to doing something you deem acceptable to spend the money on later on, offer to help out a bit and use some of it towards these things.

HairyDogsInUnusualPlaces · 04/08/2019 14:43

I have saved for my dc in their names and i regret it as i don't think a lump sum at 18 is necessarily the wisest gift. If i had my time again, I would save for them, but in my own name, so that i could gift it to them when i felt it was appropriate. Having said that, i need to accept that if they piss the significant amount up the wall at 18, they will learn something from the experience. Just because i would like them to use it for a house deposit, they may get more value from travelling for a year. I just hope they don't fritter it on a fancy car that they then write off.

Soontobe60 · 04/08/2019 14:45

We opened a high interest saving account in my name when DD was born. When she was 18 there was enough in there to supplement her university costs as she didn't get a full maintenance loan. So we paid £1000 a year towards her rent, and £200 per month living costs when she was at Uni. She didn't have any control over it. If she had not gone to Uni, we would have used it to either buy a car for her or towards a deposit for a house. The little bit that was left after she got her degree has been used to help pay for her soon to be wedding.

Purpletigers · 04/08/2019 14:46

Sophie - I think you have me confused with someone else .

KOKOtiltomorrow · 04/08/2019 14:46

another saying save in your own name. Ok, you might earn less interest but that is favourable to an 18 year old blowing the lot! My friend had an account for her DD and it was worth about 5 grand when she turned 18. She had a real dodgy boyfriend who she basically handed it all over to and he used it to pimp up his car then dumped her when it was all gone!

sophiestew · 04/08/2019 14:52

Sorry purple you are quite right! I confused you with labrador

That will teach me to try and study as well as MN at the same time!!

I shall devote myself fully to my studies now Grin

Hotterthanahotthing · 04/08/2019 14:54

DD has money in a child trustfund,she will have access at 18.I have had 16 years so far to teach her about finances.
Birthdayoney etc has gone into her own savings account and now at 16 she has a current account.
I also have made sure I have savings.Should I die she doesn't get control of the money my assets will raise until she is 24.
I worried with the child trust find but I'm now confident my DD will be sensible about it and knows that this is intended to help her through uni.

SunshineCake · 04/08/2019 14:56

I think you need to chill and not be so prescriptive. Our son was given the CB as we didn't need it and when he turned 18 he was told about the five figures we had saved for him with contributions from grandparents, relatives and inheritances. He seems to be managing just fine without blowing it. Teach them about the value of money and then it won't be pissed up the wall.

It's mostly still in my name and I transfer money when he has a need. He has no issue with that.

Hooferdoofer37 · 04/08/2019 14:57

I would definitely put it into a pension fund for them.

The difference it will make to them in their older age will be huge

Kaiylee · 04/08/2019 14:58

Why don't you split it? Save £50 a month in the kids account and the other £50 in a separate account.

The separate account could be accessible if you needed it for a big purchase/emergency or you could choose to use it towards college/uni/other expenses as your kid gets older.

FlamingoQueen · 04/08/2019 14:59

Why not buy premium bonds? You can access the money quickly if you need to and you may win.

Heatherjayne1972 · 04/08/2019 15:00

I’ve done exactly that op. The child allowance money is saved plus any top up money I had available
My kids know about it but they’re also very aware it’s going towards a house deposit/ wedding/ uni or whatever. It’s not for ‘spending ’
Every little helps as you say it’s going be be a very different future for them

RainbowsandSnowdrops · 04/08/2019 15:00

I haven’t read the full thread but you don’t have to go for a smart junior ISA type account where it’s automatically there’s at 18. There are a few that you can just sign it over to them when they’re ready.

I don’t pay much into DD’s junior ISA for this reason. I wouldn’t want her to be the owner of the funds at 18.

grumiosmum · 04/08/2019 15:02

I saved DS's child benefit up for him in a stock market fund.

By the time he was 18 it was worth £17k, which he is re-investing in a LISA.

Much better to invest in the stock market for a long period of time, than in a cash savings account or ISA, especially while interest rates are low.

TinklyLittleLaugh · 04/08/2019 15:06

We saved for our four: Christmas and birthday money, the odd bonus and an unexpected inheritance. They ended up with 12k.

The eldest two got full control when they went to uni; they both spread their money wisely over 3 years. Third child is not so sensible and had hers doled out termly in the first year of uni, then yearly for the second year. Now she seems to have learned the value of money I have given her all the rest to budget herself for years 3 and 4.

We will play it by ear with the youngest.

Dieu · 04/08/2019 15:09

Person B.

But for now just enjoy your new baby!

SirJamesTalbot · 04/08/2019 15:11

I would look into saving into a personal pension if you can; otherwise A.

CoolWivesClub2019 · 04/08/2019 15:15

My thinking is that it makes more sense to pay off all your mortgage etc as early as you can, and then you have 'spare money' available when they reach that age

This. We don’t save anything specifically for our 3.

We’re working on being in a decent financial position for when they’re older so that we can (on an ad-hoc basis) help with uni/training/car/house/wedding costs.

There is NO way I would save £Xk and just hand it over in a lump at 18/21 etc. I think the people planning this are crazy tbh.

I’m very much the sensible type compared to many of my peers and always have been - but I know where a few k would have been spent at 18 and my liver is thankful I never had that kind of money then 😂

supadupapupascupa · 04/08/2019 15:18

No way would I put any substantial savings into the names of my children. I've seen too many young people take their life savings and blow it on a fast life and drugs. Nada. Savings go in our names and they will be gifted house deposits etc as and when.

AlexaAmbidextra · 04/08/2019 15:22

Well I wouldn’t hand over a substantial lump sum at 18 for a start. I’d probably tie it up in a trust until say 25. As for the sum, if you won’t miss £100 a month then do this but obviously, if your circumstances change for the worse then this aspect can be reviewed. It doesn’t have to be written in stone now does it?

BananaDaiquiri · 04/08/2019 15:24

Obviously there a lot of people who believe you shouldn't save anything for your children and they should make their own way in life while others think you should help your kids out if you can.

We decided to save £150 a month for each of our children (we don't receive child benefit so I guess this is closer to what person A says?). We felt this was affordable to us and we are trying to bring them up to budget, save and generally be responsible with money. we talk quite a bit at home about how much things cost and why we decided for example, to buy x brand of cereal instead of y, or why we don't run a car. We therefore hope that the money will just make things a bit easier for them when they are older, either to help ease student debt a little or perhaps put towards a deposit on a flat or stamp duty.

I was left a little money when a grandparent died (about £2000). I went to uni, worked during the holidays, did a sandwich year that I got paid for and finished without very much debt, which was able to be paid off by the money I'd been left. I definitely didn't run out and spend all the money at 18 on clothes or drugs! Appreciate we don't know how our kids will turn out and it's a gamble to just hand them piles of money but the money is in an account in my name for now and not theirs which is not as beneficial in terms of tax but gives me some control if there is any problem later on.

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