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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

156 replies

Whereiswarmth · 11/04/2021 13:17

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?

OP posts:
BertieBotts · 12/04/2021 09:38

I would say also yes if you don't earn enough then you never have to repay your student loan. Whereas if you pay it off immediately then the money is gone.

In the long term if you do earn more then it works out about the same but if you don't then it will be of massive benefit to have that money accessible.

But to be honest I'm not at all up to date on how student loans work in the UK. I was due to go in 2006 and my DC aren't old enough to be thinking about it yet.

Zenithbear · 12/04/2021 09:53

Mine had large inheritances when my youngest was 19. It went on driving lessons, cars, holidays and house deposits.
My dps dc had £12k each inheritance youngest was 17, one saved it the other added it to savings for a house deposit.
Then one of the parents of the dcs partner died leaving them enough to clear the mortgage and buy a rental property.
We are better off than our parents but dc aren't better off than us yet.

EssentialHummus · 12/04/2021 10:09

If these were my DC I’d be emphasising the money as “a deposit for a house/flat” whenever it comes up (as opposed to “when you’re 18 you’ll get £50k from Grandma”).

EWAB · 12/04/2021 12:06

DS2 is much better off than us due to an inheritance. Doesn’t worry me that he’s better off than me but devastated that he will have life changing money which my eldest son doesn’t have.

Wauden · 12/04/2021 19:32

@Whereiswarmth. If you are worried about the children being taken advantage of, that could happen, eg at uni, people could expect all drinks to be paid for by your kids. Or other kids do sneaky things or resent them. If it was me I would suggest that they keep quiet about it.

HotChoc10 · 12/04/2021 19:59

I got about £30k when I turned 18. I was pretty sensible but my mum was still basically like, FYI you have this money, I've made an appointment at the bank to invest it for another five years so make sure you're free at 3pm Friday. I didn't question it!

Whereisthewarmth · 17/04/2021 18:35

Wauden, yes need to drum it in to be discreet...

Hot chco that's also an excellent idea... Unless in laws undermines that! But that would be excellent idea..

Dustyhedge · 17/04/2021 20:22

I wouldn’t use it for student fees but would drum it into them that it is for a house deposit. You could get to a point where you encourage them to only spend any dividends or growth and to maintain the capital. That way they get some benefit without pissing away more.

Badbadbunny · 17/04/2021 20:27

@JackieTheFart

It would be better to save it to buy property than pay for uni outright IMO.
Interest on student loans is higher than interest on mortgages, so it makes more sense to get a higher mortgage and lower student loans, IF, and it's a big IF, they are likely to get decent jobs with a high enough wage to be liable for student loan repayments. If they'll earn over the limit, they could well be paying the SL repayments for 30 years, including a really hefty wedge of interest. Obviously, if they're likely to get lower paid jobs or work part time, so earn under the threshold, then taking out student loans are better as they'd never make large repayments.
RainingBatsAndFrogs · 17/04/2021 20:32

OP, Student Loans are based solely on parental income and do not take into account the student’s savings.

My Dc have a little nest egg left by a particular relative. I have never hidden it from them but always spoken about the value of this MN ey as a house deposit because never again in their lives will they have a sun like this unless they save very very hard.

One opened his own Help To Buy ISA as soon as he was old enough, and is transferring the money each month to get the best benefit.

Show them how money grows, teach them about compound interest.

SnackSizeRaisin · 17/04/2021 20:42

Interest on student loans is higher than interest on mortgages, so it makes more sense to get a higher mortgage and lower student loans

That's not true. A student loan doesn't need to be paid back until you are earning over a certain amount, and even then the amount is relatively small. It gets written off after 30 years.
On the other hand, housing costs whether renting or a mortgage need to be paid regardless of earnings. Plus you need a deposit to escape from being stuck in rented accommodation.
If you spend the money on university fees it will be unlikely to make much difference to your take home pay for some years - but you will have no deposit and it could take years to save up, meanwhile paying rent.
If you take out loans for university, you can immediately buy a house on graduation and avoid wasting years of rental payments, safe in the knowledge that if your earnings drop (due to for example, being ill, doing a PhD, taking maternity leave, going part time to care for children) you are not obligated to pay anything off your student loan.
In addition, you would need at least £60,000 to pay for a 3 year degree, and the payments are based on earnings not the amount borrowed. So if you still need a smaller loan, you could end up in the position of still paying back just as much!
The only reason to spend on university would be either you are rich enough to pay for university and a house, or you are guaranteed to enter a well paid job that pays well right from the start and are sure you will not be going part time etc. Realistically you would have to be earning 3 times the average wage to pay it all back

Onedropbeat · 17/04/2021 20:53

My SIl & BIL recently bought a house thanks to their children’s inheritance from the grandparents

No idea how it was allowed but I can’t see the children ever being paid back

It was around £100k

SandyY2K · 17/04/2021 20:54

Re paying uni fees v loan.. I didn't realise that loans had % on them to be paid back.. So there is a risk that they couid go high.

The interest is very low and they don't start paying back until they earn a certain amount.

A financial advisor would say they should take a uni loan. Better to invest the money from their GP elsewhere...like property.

cptartapp · 17/04/2021 21:01

PIL have put aside £30k each for the four GC. DH has just turned 18 and will pay for his tuition fees with his to avoid any interest on a student loan which starts the second you take it out.
DH is an accountant and calculated that on a 'good' salary with average inflation going forward, this would be the best us of the money. It is actually mostly females that never repay all their student loan due to child rearing, working pt and becoming SAHP.
We are luckily enough to be able to give them a house deposit to avoid renting if need be anyway.

Cowbells · 17/04/2021 21:28

@Onedropbeat

My SIl & BIL recently bought a house thanks to their children’s inheritance from the grandparents

No idea how it was allowed but I can’t see the children ever being paid back

It was around £100k

I don't understand this. You can't legally spend someone else's money just because they are a child and you are the parent. That's illegal - in English law, at least.
Whereisthewarmth · 17/04/2021 22:10

It depends how money was given to the gc..
Ie written legally or a weak irrelevant conversation.

Cp.

That's interesting from the an accounts pov
But what would he say if you were not able to pay for a house deposit

Onedropbeat · 17/04/2021 22:19

@Cowbells I’ve honestly no idea how they got around it because that was my understanding of the law too

Toddlerteaplease · 17/04/2021 22:20

I also used my legacy for bug purchases and a house deposit.

ihavethehighground · 17/04/2021 22:25

This makes me feel quite sad for our DS. Their only grandchild and nothing.

Whereisthewarmth · 17/04/2021 22:31

I have.

My in laws have brought lots of pain into my life, my dh, myself and my dc don't have the luxury of a relationship with them.
If I could choose warm, normal people with no legacy to leave, but lots of love, fun and memories... I'd take that in a heart beat.

Obviously it's sad when you have shit in laws and no money compensation.

FeedMeLotsOfCake · 17/04/2021 22:47

Can't even get an appointment with my GP!

Seriously though, if that kind of net worth eclipses yours, you need to do some thinking. Maybe the GP are skipping a gen (with such non life changing sums) for a reason?

Bagamoyo1 · 17/04/2021 22:55

@Trinacham

Can't speak from a parental perspective but I had a similar amount growing up, from being gifted amounts every now and then since birth, and my parents putting it away in my ISA - is it that unusual? Used it for a deposit on my first home (with partner) when I was 24. It did help to have such a large deposit (45k by that point). It isn't really that much really when you think about the cost of deposits and housing..
Having £45k in gifts at 24 years old is very unusual. Surely you must know that!
Embracelife · 17/04/2021 23:06

They are 11 and 7. You have more than 7 years for conversion about money and the value of saving for flat deposit
Talk to them.
If you had lots of money what would you do?
Tell them what you would do

Whereisthewarmth · 18/04/2021 23:27

Embrace I had a quite extreme situation... Df tried to teach me a little about money but looking back it was incomplete training.
Eg he set up small investment for me but didn't go into how I could grow it or preserve the capital.... And it was a small amount...

These larger sums are harder to manage.
I was also an unhappy teen with a crumbling family around me and not knowing what to do...

Feed me..

Arrogant much! The candy brothers started an empire with far less.
They could have 80 grand each or more by 18.

That's a bloody fortune.... And will set them up for life!! If its used properly.
Non life changing sums, indeed. Hmm

Re them skipping.. I don't care... I would be so happy to never see them again, they've marred and ruined every special moment and occasion in our lives.. And give nothing positive, they can stick their ££ where the sun don't shine.

Embracelife · 18/04/2021 23:37

Just keep telling them how lucky they will be to have flat deposit
Frame it as this is deposit for their first home
Keep referring to the money as a flat deposit or student house deposit they can rent a room out
"Oh when you older you will have money from gp s to buy a flat"