Dc given quite a lot of ££ by GP, will be richer than us at 18..

[Whereiswarmth]

We are extremely low contact with pils, I certainly would be very happy to never see them again... Dh can't speak to them and has not seen them for a few years now.

Long story! However they do put ££ into dc isa.
It's quite a bit now.. Near 30 grand... Probably a little more, they are 11 and 7.
Obviously this is a first world problem and a nice problem to have but it's worrying at 18 they will have access to this.. They seem very sensible at the moment but I'm aware it could even put them at risk from unsavory people when out socialising..

What will they do with it?

Although I dislike pils obviously I'm grateful for this.. But I'm wondering if they will contribute every year?
Dh and I are not high earners at all.. But something also makes me feel slightly uneasy.. Neither dc have been enraptured with pils.. I'm certainly not going to encourage contact at all after past issues etc. Pils are very well off..

Just wondering if anyone else's dc has more money than them and what they would do with it?

Lisa is also excellent idea if they are still around by then...
Infact id also encourage them to put some into a sipp..

So I was given about £20,000 when I was 18, and I've set up bare trusts for my children - they should each have somewhere between £50,000 and £80,000 by the time they're 18.

My father was really good at explaining that this was the only money I was going to get, and that I shouldn't spend it - though he explained that I could spend the interest. So I did - about £800 a year, which mainly went on travelling while at university (this was when you could budget £10 a day for travelling around India/ Egypt/ Vietnam/ Mexico - and it was all incredible and I am so pleased and grateful that the money I was given made this possible) and then the money went towards a deposit on my first flat.

If, when my kids get to 17 and a half, I decide that they are totally irresponsible and cannot possibly be given their cash, there are things that I can do as their trustee. The most obvious would be to use their money to buy property in their name, which would be a way of protecting their assets and making it much harder for them to accidentally spend it all.

This is a long way of saying that you might want to see if it you can become a trustee of their money.

Two of my GCs where given 50K each when they were 20 and 21 by paternal GF. Nothing was said to my DD or SIL. He just invited them out for a meal and gave them a cheque each.

There was some consternation as, even though they were both sensible kids, their parents were concerned about such a large sum. They made them an appointment with a financial advisor. He told them that they should think carefully so that in a few years time, they did not want to regret the spending.

Fortunately they heeded the advice, one more so than the other. He did give a substantial sum to my SiL at the same time so them , being better off than the parents , did not occur.

As a family they always lived very frugally and I think they set a very good example to the children. It could have gone pear shaped and changed their life for the worse.

I think you are right to be concerned. I would not tell them about it as it might change their attitude to their future. It is better to believe that you have to work for your money. It was definitely about control. Some of the things that were said when the cheque was handed over, certainly did not enhance their thoughts about him.

I was given chunk of money when I was 20. I used it to go abroad to study. I was raised to be sensible with money, so there was no way I would waste it.
Now I know my parents made some fund for my dc. I just hope I raised him well enough to appreciate it and use it wisely when he receive it.

@Tibtom I've heard of a lot of people doing this and a few thousand wouldn't bother me but they have an enormous amount of money and just think their decision was about stopping their evil daughter in law getting a penny than what's best for my dc and the actual money itself.

Me and DH have put money away for our DC since the day they were born. It's for their future AND their present. Like the Hamilton tickets dc1 really wanted. They'll have money regardless of gp.
I've never inherited a penny off anybody and I'm 42 and it hasn't ruined my life yet

My ISA is running at 18% at the moment, DDs 21% and DSs 26%. They are stocks and shares ISAs and you need to keep an eye on them but 20% is not an unusual figure at the moment.

Only because of how badly stocks (and hence S&S ISAs) were hammered as covid took hold.

We have S&S ISAs invested in a 'recovery fund' (cruise lines, airlines, house builders, pub/restaurant groups, etc) and it's up more than 50% since July 2020, but it's completely unrealistic to think that's going to be how things are going forwards.

Even 10% is extremely optimistic for S&S ISAs as an ongoing growth rate, and that doesn't include the negative effect of inflation.

Yes I think the best idea is start discussing it in the context of sensible things to spend it on ASAP so that they get that idea firm in their head before they have a chance to start amassing ideas of holidays, cars, clothes, impressing people etc.

And let them know that it's a good idea not to talk about money with other people because some people might try and persuade them to part with it.

I would leave it where it is and make sure the children know it is there for their future. Mine all had about £10k by age 18 from presents over the years and found that useful as extra money at university . These are not vast sums really. My children have had from me a lot more than that for housing and they know it goes into a house even if they are sure they can double their money on shares. That is it's purpose. All 5 own a property including the student two who keep the rents and if when they are older they choose to sell it or give it away that is up to them but there is no more and I would prefer it to be in their home rather than used for something else.

Ideally I would work with the grandparents to get the money out into a trust that allows for sensible spending on education or home purchases and doesn’t allow full access until an older age.

Barring that, I would just start teaching them about how lifetime wealth gets built and that it has to begin early. Teach them now that this money is only for education and the future. Start pushing the message of how bad it would be to squander this money.

Obviously there is a back story but, if you have no contact with PIL and DH doesn't either, and DC are not keen on them, is it morally right to take their money? I know you are not personally taking it and I assume that the GPs must have done something fairly awful for you to be low contact. But I can't help but think that you may have influenced your DC not to like them.

Without the full story, I can't help but feel a bit sorry for the GPs. Maybe they are desperate to know their GDCs better and that is behind their generosity, but is that such an ignoble aim? It just seems a bit callous to be sort of leading them on - I am not saying you are, by the way, it's not clear - and encouraging your DC to take their money but not to like or respect them. Few people are so wealthy in retirement that they can comfortably gift those sums of money.

It would be better to save it to buy property than pay for uni outright IMO.

Yep, I'd use some of it on a house deposit and then anything left invest in ETFs. Paying uni fees would be insanity.

I would’ve bought a Ford Mustang and deeply regretted it!
Could it be put aside until they’re a little older, pay towards Uni, maybe some travelling, property, etc.

@Puffykins

So I was given about £20,000 when I was 18, and I've set up bare trusts for my children - they should each have somewhere between £50,000 and £80,000 by the time they're 18.

My father was really good at explaining that this was the only money I was going to get, and that I shouldn't spend it - though he explained that I could spend the interest. So I did - about £800 a year, which mainly went on travelling while at university (this was when you could budget £10 a day for travelling around India/ Egypt/ Vietnam/ Mexico - and it was all incredible and I am so pleased and grateful that the money I was given made this possible) and then the money went towards a deposit on my first flat.

If, when my kids get to 17 and a half, I decide that they are totally irresponsible and cannot possibly be given their cash, there are things that I can do as their trustee. The most obvious would be to use their money to buy property in their name, which would be a way of protecting their assets and making it much harder for them to accidentally spend it all.

This is a long way of saying that you might want to see if it you can become a trustee of their money.

This also might be a good idea if you think they might benefit from not having to worry too much about part-time jobs at university. (I think Oxbridge even ban them during term time?) £50k in an income and growth fund with a target of 3% would give them £125 a month which isn't bad for a student and would teach them not to kill the goose that lays the golden egg. (Based on AJ Bell's Income and growth fund)

Sofia mine have always been around that amount.. At least for last 5 ish years..

Of course however I know that they could go down but usually everything moves up and you also get the dividend..

Even 10% is extremely optimistic for S&S ISAs as an ongoing growth rate, and that doesn't include the negative effect of inflation.

Then just put it in an ETF that tracks the S&P500 yourself. 10%+ annually is bog standard rate over a decade or so. Historical figures are just a google away. So 10 grand would be nearly thirty in ten years and then around 70 in twenty years. Of course could be a bit more or less, but 100 years or whatever of stock market history suggests around that ball park.

Mrs wombat again very good ideas and I love the golden goose analogy!!

Excellent to subside with interest...

My siblings and I each received money from my DGS will. There was some mistake in writing the will and we received it when we were 18 rather than older when my parents preferred. It was quite a bit and my parents were horrified. My oldest sister ran through it all and got into debt in a couple of years, the next emigrated to Australia and used it to buy a house and the youngest one and I used it to pay for our university and buy flats when we started working - which was a great help. We were a bit younger, so we had time to get used to it and learn the lesson my oldest sister had inadvertently taught us. It was tough though... Can you put it into a fund that they can't access until they are 30 or something? Based on my experience, that is what I would do.

Hi OP,
I think you have had some great advice and I agree with a lot of it.

At the moment your children are quite young but as they get older you could start to mention that their nan and grandad have saved money "for their future". This "for their future" sets a mindset.

I agree if they go to uni they should take the tuition and other loans as if they are low earners (no judgement) but have spent all the money on university then they won't be able to buy a property. (9k a year just fees probably more by then) I think it might be helpful for them to top up from this money though as the full student loan only just covers the accommodation from what I can see.

Even though your child are legally entitled to the money at 18 it doesn't mean you can't foster a culture where there cards/books for this account are in with family documents and are seen as a littlle sacred. My sibling doesn't charge their (young working adult) children rent but they "have to" save a set amount every month - they comply.

Your kids day to day savings should be separate. I think the "for your future" mindset means that they should use savings from pocket money/birthday/ xmas or jobs for nights out, shopping and holidays.

Even though your in laws are difficult I think this money is a good thing for your kids. You can enjoy more family treats and holidays/help them with driving etc knowing they have help with uni and house deposits.

I had money from grandparents in an ISA. I was told that it was for a deposit on a house only. I didn't touch it until this year - for a deposit, of course. I am 32!

They might not necessarily want to spend it at 18, my dd is 17 and very tight with money, she would likely not touch it until she needed it, possibly for a house deposit. All you can do is talk to them about it as they grow up but don’t make a huge issue out of it, they may realise that it’s better to sit on it for a while rather than spend it?

DD has this set up, she is 13 and gets funds since birth from both grandparents. She knows about it and makes plans for it like driving license, car, furnitures for flat, a horse.

The difference to an ISA is that her account is in a different jurisdiction and we as parents can access the money until she is 18 and could acutally empty the account and hold it under our name. (Not that we plan this and you could argue it is theft even in that country.)

But, she gets decent pocket money and learned early about budgeting, saving and value of money. Regardless if she is sitting on this saving account, money managment is a life skill.

Do you children get regular pocket money? If not, that could be a way to learn about money management. At that age I wouldn't talk into too much depth about university as most likely the whole fee issue may change at one point, and in my opinion education is a parent's responsibiltiy in general. I would just teach them about bills, rent, mortgages and other financial responsibilities. DD for example knows about a mortgage and bills for utility/phone contacts and the costs of her hobbies.

YANBU my in laws are also stashing money in an ISA for the kids and I have similar worries - while I’m appreciative, I also remember myself and DH at 18 and I’m not convinced we’d have spent it wisely!!

The advantage of gifting the money to GC now is that there is a fighting chance the estate won't have to pay inheritance tax on it when your inlaws die. I say this as I am currently dealing with my DM's estate.

Some people seem to be naturally careful with money; others love to be generous or gain pleasure from buying stuff. Age 18 is a long way off for your DC. I would take the opportunity to teach them good money saving/spending habits over the intervening years.

Paying uni fees would be insanity - @supermoonrising can you help me understand why? The interest rate on student loans is quite high. Do you mean in case they are never earning enough to have to repay it?

Well @Silverfly I suppose people think it's insanity to spend all that on a degree if then the person ends up working in HMV or something and renting when they could have used it for property where they'd have a house and the money would grow