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?

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.

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.

You don't have to hand it over at 18. Spend it on education

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.

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.

Why not compromise and put £50 in and save the other £50 in an account for yourselves? Then you have a pot of money if you needed it. Or something extra you could dip into for holidays/treats/pension etc

I don't agree with those who say because they weren't given anything then no one else should be either. They're your children. It's natural to want to give them what you can.

My parents saved in a building society account for me too but they kept the book. They were trustees whilst I was under 18 and then it converted to me. I was given the book at 23 when I bought my first house and used it as part of a deposit. Nothing stopping you from doing the same

I go with A. Also a pension would be a wise investment, my grandparents set me one up when I was a kid.

Of course there’s a compromise. As plenty of people have said - save in a dedicated account, but in your name, and decide later what to do - based on reality, not conjecture.

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.

If you can afford to save for your child then do it. My father gave me access to my savings account when I was 21 and hid another for a further 2 years (I was desperately struggling and he never thought to hand it over and refused to loan me money for food) if you can save 180 a month with others adding in then do it. What a fantastic start. Also think about 2/3rd children. Will you be able to afford the same for them too

I don’t think there is a right or wrong here... it’s a joint financial decision and there should be a compromise somewhere.
FWIW, we save all of DS’ child benefit and top it up with £120 each month. We won’t definitely give it to him when he is 18 - it will depend on how mature he is!

Another point to add - the money is in DH’s and my names

We've saved in our names so that we have ultimate control on what they spend it on. I'd hate to think they can piss it up a wall at 18, but otoh I wouldn't want to tie it up till 25 for example, if they need it before then. We can also divide it up equally at the time, so don't have to worry about who gets what, when, and it's also available to us in a dire emergency like job loss etc. We've never had to dip into it but it's reassuring to know it's there.

Also, doesn't anyone worry about unsavoury characters around the the dc?

At a party at any time the dc with access to huge sums could let that slip eg

A) ' ill be waiting for years before I can afford driving lessons and car
B) I'm lucky my dp have savings for me so I can do it now.
A) yes but will they allow it?
B) they don't need to it's my money in my name and with 30 grand yes I can afford.

Anyone could be listening and drug dealers, county lines can target youngsters with tried and tested techniques to get them hooked.

Your dc could be as good and innocent and sensible but someone slips them a heroine laced spliff...

Fwiw my dc have two small savings books I put small amount into each month, some years 0 currently about 30 each a month.

I'm hoping to use this as their learning tool. Ie we go to bank, they know a few hundred is in there and gradually I'd like them to manage it, earn pocket money to go in, save some, spend some etc.

Because they have a few grand in that child trust fund thing I'm hoping will go on driving lessons and a car and then, they have some more coming via 3rd party source that may also be few grand.
So I'm hoping by learning it through the small amount of they will be able to appreciate the larger

We told our ds at 18 that there is x money towards a car and x money towards a house deposit and will tell dd the same at 18, so they know how much they have. So far this has motivated ds into saving more. A car and house are no longer a pipe dream but they also know that we will only help them if they also help themselves. They won't get a free ride.

If you can afford it, why not?

If you have any misgivings, then prioritise your own investments/savings/pensions/first - there really shouldn’t be any angst about it. You could prioritise paying off the mortgage, maximising your pension contributions and using your own ISA allowances first if you don’t want your DC to have access to their own money at 18.

We have done a combination of these over the years, less so when household income went through troughs (periods of redundancy) - all part of life. There is no right or wrong answer - do what you feel comfortable with. I have saved a regular amount for DC1 for 15+ yrs and his JISA should provide enough for 3/4 yrs of rent & living expenses for an undergraduate degree. I still expect him to have a tuition fees loan! There may be enough to fund postgraduate studies or a house deposit - who knows. At least, I won’t have to find the funds from income. I’m also ok if DS decides to use some of the funds for travelling - he should do it whilst he’s young and have no responsibilities is my view. It’s not a wad of cash - he has to make decisions as to what to sell to obtain the cash. Hopefully, they’ll be informed decisions by 18. He’s 15 now and he’s started expressing an interest in what is in his portfolio. I’m comfortable with the (low) risk that he might waste it all but obviously, plenty of others don’t. It’s a personal decision. I had access to a more modest sum of approx £8k at 18. I spent it in my mid 20’s doing a masters degree. Most young adults are more sensible than this MN thread give them credit for imo.

Since the money isn’t in my name, I don’t feel that it is mine. The JISAs have done so well that I’ve also opened Junior SIPPs for them in the last few years. Only do it if you can afford it and prioritise saving for yourselves first.

It does amaze me how many on this thread believe that there is a huge risk of their DC suddenly going off the rails at 18 with some access to money. Surely, you would try to bring them up so it’s not a massive deal - the pot is there to last as long as possible. It enables them to follow their dreams, take advantage of opportunities and have a good start to their adult life and that they are fortunate to have it; so try to use it wisely on the whole.

You ALWAYS hear about the ones who go off the rails, less so about the sensible ones (the mass majority).

san I was brought up really sensibly. I still blew the money 🤷‍♀️.

"It does amaze me how many on this thread believe that there is a huge risk of their DC suddenly going off the rails at 18 with some access to money."

I don't think anyone said they thought it was a "huge risk". It's a low risk in terms of likelihood, but relatively high risk in terms of consequences. Frequency versus impact.

"Surely, you would try to bring them up so it’s not a massive deal - the pot is there to last as long as possible. It enables them to follow their dreams, take advantage of opportunities and have a good start to their adult life and that they are fortunate to have it; so try to use it wisely on the whole. "

Of course everyone tries to bring their DC up like this! But not everyone will manage to do so, or will manage to do so but will fail to legislate for the X factor which could be falling in with a bad crowd, having a drink/drug problem, being easily influenced by less responsible friends, or just having a personality which is less risk-averse than the parents would like.

It's very easy to avoid the situation where an 18yo blows the money you've carefully saved all their life on stupid things. So why would you risk it?

just bear in mind whether you will definitely always be able to put in the £100 per month (that's a sizeable amount really), and whether you might end up with another child (or more), and whether you could afford the same for all 3.

we went through the same discussion with DD1, but knew 2nd or 3rd child was always likely, and that £300 a month would not be sustainable.

DD1 has had £25 per month, plus £250 govt voucher, and she'll have about £6.6k when she's 18.

i know this isn't massive, but it's better than nothing.

if you are only/can only have 1 DC, and £100/month will always be manageable - crack on!

I saved in children's account, in trust their name parent name but transferred it out just before their 18th birthday.

This was to gain higher interest available to children but then the transfer was to keep control when they turned 18.

Its my money until I gift it to them, even though I saved it with them in mind. This is because if we need it to keep a roof over their head then I will spend it. Otherwise I use it for things for them.

Most banks write directly to the child, the small amount I left in her name, she was notified about.

Op do a combination of both, save the extra £100 but retain control at 18 until they need it or until they can look after it themselves.

Also even out the savings between all potential children as time goes on and keep looking at it to keep it fair. I have a 10 year gap so I do this.

Pension fund, we started a pension fund for our DS when he was born,misting using the child benefit, he is now 18 & it has steadily grown and will be a great asset for him in the future.

Pension fund, we started a pension fund for our DS when he was born,misting using the child benefit, he is now 18 & it has steadily grown and will be a great asset for him in the future.

Pension fund, we started a pension fund for our DS when he was born,misting using the child benefit, he is now 18 & it has steadily grown and will be a great asset for him in the future.