To not know how best to use this money (for DC)?

[Flumperama]

Name changed just in case this is outing. In AIBU because not sure where else to post...

2 DC (6 & 4) have been left, over the past few years, about £160k (from GPs). It's currently invested, and we're happy with that side of things. However, we're not sure what the best use of that money is, in terms of setting them up for the future. Both are in a good local state primary (that we're happy with). Local secondary state option ok - I hear both good/ok and terrible things about it! I'm ambivalent about private schools, but am worried about the encroaching impact of cuts on state secondary education (in terms of scope of subjects, teachers, facilities, etc).

For context, our household income is approx £60k a year. Unlikely to go up massively in the next 10-15 years due to the nature of our jobs.

Options:

1. Private secondary (obviously it won't cover the whole cost, but we could, I think, make up the rest from our own savings + economising on household expenditure).
2. Use it to pay university fees/ living costs / etc
3. Split it between them for deposits for their first homes (although we potentially have another source to be able to do this when the time comes)

I guess the question is - which one of these things helps someone on their way in life the most?

(p.s. I realise we/they are really fortunate to be in this position)

I would pay for uni if related to the career they wanted to do and put the rest into a house deposit fund. If the degree was general and going to uni for the sake of it I’d save it all for house deposits. I wouldn’t pay for schooling personally.

3

Your children were left the money so why are you deciding how to spend it?

Leave it in savings for them to decide how they think is best to use it. It's their decision to make, not yours.

Given you don't expect your income to raise substantially, and local state options are good, I would do a combination of 2 & 3.

Be mindful that they will be in the threshold of financial protection which is £85k in a bank. I’d speak to a financial adviser.

She's actually investing it now - she's hardly going to leave it in a current account!

Whoops, posted too soon. I think 3 would set them up the best to be honest.

With uni, it will be interesting to see how student loans / grants change by the time they go to uni but they can potentially get a lot of help, and student loans aren't really the same as other types of loan so paying outright for a lot of that might not be sensible.

Getting a deposit is a huge hurdle (the main one) for a lot of people buying a house these days - I rented for 6 years and my mortgage payments are a similar amount now. It was purely saving a deposit that took the time to get on the ladder.

Also, you don't really need to decide how - circumstances might change?

Gem yes, fair point. But we are custodians of it and make all decisions regarding our DC's future, so surely we should have some input?

And to whoever it was who said about banks - good point. However it's not in a bank, it's in stocks and shares, etc, and we have no concerns about how it's invested.

Do you know, I think putting it aside and letting them choose if they would rather have it for a house deposit or for uni fees would be fairest! We don’t know where the world is going to be in 10-15 years, so they may really need the support in different ways. Plus, one might grow to be super academic, whilst the other has a different skill (music, art etc) - and they’ll be able to make the decision based on their needs.

Private secondary IMO is a waste - it’s hugely pressurised from the people I’ve spoken to, and I feel I got just as good an education and opportunities as those who went to a grammar school. But I appreciate it’s different for everyone and may open doors I’m not aware of. 🤷🏼‍♀️

Either way, whatever you do for your kids will help them on the way to a safe and secure future, which is a wonderful thing to be able to do. X

I have to agree with @Geminijes I think. If you're happy where the money is now then leave it there and wait until your DC are old enough to be able to suggest what they use it for - which in your position I'd hope was number 3.

I'm assuming with you having options that the GP didn't express what they would wish for it to be spent on, private education for example. So I think it should be left for them.

OP, personally I think money is wasted on private secondary education unless local schools are awful. I'd be looking at moving house to be nearer to a better secondary school and saving that money for a house investment. I'd try to manage without it for university - they will just be in the same boat as everyone else then.

Name change fail op

As Geminijes said, if it's been left to them, you shouldn't be making any decisions on what to do with it, it's their money, not yours. When they're 18, they can decide what to do with their inheritance. Shouldn't it be held in a trust for them? What exactly did the wills say?

If you invest it now you should have enough to send them to a good school for secondary. That would by far be the best use of money. They’ll go to university regardless, but private school could be the difference between oxbridge/Russell group and a worthless degree from a less venerable institution. Obviously private education also offers other refinements which will serve them well in their adult life as well. That’s what I’d do at any rate.

If invested and well diversified in 20 years that will be a wonderful nest egg!

Our DD is at private school and - whilst I have no regrets - I would only “blow” money that way as a last resort. See what the schools and kids are like when they come of age and you’ll know if it’s necessary.

Otherwise I think a bit to subsidise university living costs and then later a deposit is a solid plan. Or - if one or both isn’t settled enough to buy - you can always invest in a pension for them.

Uni fees may come down, they may choose to go to uni abroad (cheaper/more expensive dependent on where), loans may get better or worse for students.

In short I would just sit on it until something prompts decision!

Thanks for all the input so far. Yes, I suppose we don't need to make any decisions right away. But I'm a planner.

In response to a few points;,

• Moving house for better secondary not an option.
• The wills made no stipulations. And the money isn't in trust. We can do what we like with it when we like. But point taken re. Letting them decide. But they'll be too young to make the decision re private secondary...

I'd be very pissed off if I had been left money and my parents decided to spend it sending me to private school when it could have set me up later in life.

2 or 3. But at that point you‘ll have the opportunity of considering their own wishes / priorities... no need to make a decision now (imo).

Private school: Sure. If you deem it absolutely necessary. That day may come (for various reason). Which would be the time to to re-evaluate your previous plans...

I'm with lots of pp, it's not your money to spend, it's theirs.
Invest it well then back off, they can decide when they are 18.

Martin Lewis from MSE says that, in the current system, parents are better off paying for a house deposit than uni fees upfront. I suppose it depends on where we are with regards to university fees in future, but I doubt things will change much so I suggest saving it for a house deposit.

Don't waste it on private education. A house deposit is much more worthwhile, if they decide to go that way

I’d check with a solicitor because I’m fairly sure that even though the Will didn’t specifically leave it in a trust because they’re under 18 and it’s been left to them specifically you have to hold it in trust for them until they’re 18, you can’t just spend it on private education because it’s not your money to make that decision with.

Mostly 3 with a bit for 2. If they go to uni then still get all the loans available and use some if the money towards their living expenses and travel etc. Uni is expensive, I have 2 studying at the moment and it costs us over a 1k a month 12 months if the year.

If it's been left to them do you mean it's in a trust and you're the trustees?
Do you know what type of trust it is?

I'd be inclined to invest and discuss it with them at a later date when you've a better idea of their futures.

Money has been left to them so shouldn't be touched until they are 18. Nothing more to be said on the matter