Savings for DD - who do you agree with?

[StrangeOrJustInconsiderate]

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?

Youvegotafriendinme

DS has an isa and any money he receives from birthdays Christmas etc are put in there along with a small (£10) amount from me a month and £10 a month from DH. He cannot touch this money till he is 21.

Why do people spout such crap - he can control the money at 16, and actually spend it at 18, not 21. Please educate yourself on ISA rules, they are not hard to understand.

www.gov.uk/junior-individual-savings-accounts/manage-an-account

As per Pebbles posts, a Junior ISA automatically transfers to an adult ISA in the child’s name at 18, the child will need to provide ID and, more importantly, their Ni number, since ISAs are tax free. The parents are completely locked out of any logins and have no right to access the account.

Like Pebbles, I have had 2 reach 18, both with ISAs and other accounts, I was locked out of them and only they could access both the online and branch accounts after their 18th birthday. The institutions generally write to the child as they approach their 18th, all have done in my DC case, although I guess some might not.

My DC have significant money from an inheritance, they could blow it all if they wished, but we have gone down the route of educating them and discussing the money and housing costs and neither are looking likely to blow it. I strongly believe that involving them and educating them is the way to go.

DS has had letters as he approached 18 but he knew he had accounts anyway. None of the letters gave account balances.

@ScarletAnemone It’s still my money for now though, same as it would be if in my name instead. Of course I know that as far as the banks would be concerned it belongs to DS and that’s fine but I earned it and decided to save it instead of spending it so until he gets it, it’s staying that way!

”I mentioned court because you brought up the legality of what I am doing.”

How is me asking on what legal basis you feel you are entitled to control/withhold this money a reason to mention court? Don’t be ridiculous. The answer is you have absolutely no legal basis at all.

”I don’t hide anything. Don’t leave any financial logins lying about as is sensible I would have thought but DS could find them if he really wanted to...Not quite sure why you think the arrangement is so outrageous to be honest.”

Good lord, really?! Well despite all your later protestations that you don’t hide anything and he can access it whenever he likes, it’s very clear from your original post that you believe you are entirely in control of your adult son’s money, and that you get to decide when he gets it and what he gets to spend it on. If you can’t see what people might think is “outrageous” about that then there’s nothing i could say to explain further!

I would suggest saving what you can afford, but put it in a young saver type account that you control (my kids money is in trust until 21). You'll be glad of it when university comes around

@ScarletAnemone It’s still my money for now though, same as it would be if in my name instead

All your doing nowadays Mutts is using your sons online account details to log into his account and access his money. It’s not yours anymore as you opened the account in his name.

Personally I feel this is very unwise. If your ds developed a problem with drugs or alcohol or met a girl who he wanted to treat or a mate he wanted to impress or if he made any other unwise decision...as teenagers are known to make...he could stroll into the bank and take it all out tomorrow.

I don’t think the interest benefits outway the massive drawback of loosing control in this way tbh.

@CoolWivesClub2019 He certainly could, same as anyone with an account in their name who took control of it when they turned 18

@flowery You sound very angry, not quite sure why. I presume you are as irate with those people who have kept money in their own accounts to gift to DC when they decide they would like to? What utter controlling bastards we are

I would never want to hand over thousands of pounds to an 18 year old. I think that saving £100 a month of you can afford it great but it doesn't need to be in an account in her name. You can then control what they money is spent on when the time comes.

@muttsnutts I really don’t think it wise to go into specifics online but yes, I definitely still have access.

Oh, I wasn’t expecting account login details - would just be grateful if you could share the name of the institution which offers this ability to keep managing your child’s account once they turn 18, since it seems an unusual arrangement? As you said, people should be aware that there are other options...(if there are)

We did similar to person A

Child benefit went towards household expenses. First 2 years DD1 got £100 per month then dropped to £50 per month and the same when DD2 came along. All in my name as you never know when we may desperately need it but also so it doesn't automatically go the DDs until necessary.

@Pebbles Ah so you think I’m lying now? Not quite sure why I would do that but fair enough. If you choose to lay out on MN details of where your family’s accounts are held, that’s your prerogative, just as it’s mine to have more sense.

if you choose to lay out on MN details of where your family’s accounts are held, that’s your prerogative, just as it’s mine to have more sense.

Seriously? You can't say "I do know Barclays have an account which has the money in trust until age 25 - ask them about it" without fear of someone from mumsnet stealing all your money from your accounts?

MuttsNutts - I’m not sure what you think might happen if you tell people you have a bank account with xyz bank but your choice. It’s just unhelpful to claim that people should be aware that there are other options but then refuse to point them to those options.

”You sound very angry, not quite sure why.”

Eh? Not at all. “Very angry”?!

”I presume you are as irate with those people who have kept money in their own accounts to gift to DC when they decide they would like to?”

Not at all. I think those people are very sensible. Why would I be irate with them? They’re controlling their own money.

But I think anyone who tries to control money of another adult when they have no right to do so, and is actually claiming that money to be literally ‘theirs’, is idiotic, quite honestly. Especially if it involves any actions regarding that account that aren’t entirely...open and above board with the bank in question.

If you're not comfortable with saving in your DC's name because they get access at 18 because it is theirs, then don't do it. It's not rocket science is it?

You & your DH have separate ISA allowances of £20K each so you can save up to £40K in S&S ISAs every year. Do that.

Prohibitive charges don't make modest sums viable to be placed in a trust not to be accessed until a nominated age post 18. We're talking millions, not tens of thousands.

I have a child account for DS which reverts to my name at age 18. He can request a car or anything else he needs but I won’t let him have the cash. 18yos are naive and kind, they’ll lend cash or buy drinks and the money will vanish. I say this as someone who received £1k at age 18, I immediately got tapped up for drinks by “friends”, one friend borrowed £50 and never returned it, my boyfriend borrowed £300 and never paid me back.

I’d use the money on paying off the mortgage faster, having great holidays and days out as a family. Far more worthwhile.

@BizzzzyBee

I have a child account for DS which reverts to my name at age 18.

Would you be willing to tell us who offers this, as I tried so hard to find an account which offers this but was told they don’t exist.
But this was a few years ago, so maybe things have changed?

We save as much as we can comfortably afford, but the savings account is in my name. Yes tax is paid on the interest but it’s jot a huge amount (we can’t afford to save a huge amount!). We will then decide when he gets it. It may go towards university if he decides to go, it may go towards a house deposit or something else. I didn’t want to be forced to hand over several thousand pounds at a set age when we have no idea what he will be like at that age. My sister and I were both given a few thousand as teens (small inheritance, only a couple of thousand each). I saved it. My sister spent it partying.

I was handed 'savings' age 18 - needless to say they were all gone with nothing to show for it except maybe a few items of clothing by the age of 18 and a half!

I would just save it yourselves and have it available for private school / uni / house deposit etc. You may decide to give it all at 18 but probably not? At least then you would have control.

I would just save it yourselves and have it available for private school / uni / house deposit etc. You may decide to give it all at 18 but probably not? At least then you would have control.

” My sister and I were both given a few thousand as teens (small inheritance, only a couple of thousand each). I saved it. My sister spent it partying.”

I think that’s the whole problem isn’t it? We can all plan to raise our DC extremely well, to be responsible, well-behaved, careful and cautious with money. But while we all have good intentions with regards to our parenting, not everyone will succeed. And even those who succeed at raising their DC in this way cannot legislate for the DC’s own personality nor the influences they can come under.

It’s impossible to know when a child is a baby whether or not them coming into a large sum of money at 18 will be ok. Therefore best to assume not, as if it turns out the circumstances mean having a large sum of money would not be a good idea, the results of them having it anyway could be awful.

Why does it have to be one or the other? Why not a mix of both? If it were me I would have perhaps three accounts as follows:

1. Simple savings account generally for birthday and Christmas money and pocket money saved by the child. This can be used as and when for things like a new bike, an expensive school trip, a laptop etc and the child gets control of it as soon as old enough.

1. Junior ISA or similar this is savings to be held for the child until they turn 18 but once 18 they get control and you can only advise them. This is for larger gifts from family and perhaps a small regular amount from you.

1. Account in parents names but designated as an account for the child/children's future. Your large regular savings go in here, you can keep control of this as long as you like and the child doesn't need to know the details. If you have more than one child you ensure that they get equal benefit from it. Aim is to pay for/contribute to a house deposit/wedding/expensive post grad courses etc but this is your account so if circumstances change you can access it. Don't put money from other sources in this account so that you don't feel guilty if you end up using it for the family generally due to changed circumstances.

I do like the suggestion of a pension though, and even a very small contribution would have a big effect if it was started early. So maybe a bit in a pension too.

I'd do two separate things.

1. a birthdays and gifts account - which will go to her at an appropriate age
2. a separate savings account for the child benefit and regular top up in your control for university or other likely events that crop up.