To think that saving money for DC is risky.

[Changeychange1]

So I have one DC, not yet 10. I am divorced from her father but he adores her and will always provide for her financially. I am likely to die young, not excessively young, think 50s due to a medical condition. I am saving like crazy for her so that if anything happens to me sooner than expected she will have her her own safety net. I’ve saved £14,000 so far, and probably will have about £35000 for her when she is 18. These are my worries;

She might be terrible with money and blow it all.
It will be taken off her to pay for university and she won’t ever actually have the money (I know she’ll have it, but it won’t be used for her as such)
The interest rates are terrible and the money will be worth less than it should be by then, for example if I invested it into properly for her.
She might meet/ marry someone awful who will take half of her money on divorce.

I’m completely aware that I’m being a ridiculous worrier, but can anyone reassure me/ give me ideas of what you’re doing for your DC. My early expiration date is clouding my judgement.

Several things you could do:
Teach her about money and budgeting
Write a will and set up a trust
Invest in child stocks and shares isa instead of cash as interest rates are abysmal
My dd is 15 and has about 30k at the moment. She has just opened a bank account and is learning over the next three years how to manage her money, avoid online scams and be more financially aware.

You don't need to worry about university, all students get a tuition fee loan, then for the living expenses loan of which part is means tested, it goes off parents income not how much money the child has.

You should get some advice on how to invest it. A stocks and shares ISA in your name would be likely to gain significantly in value over the years. Don't just put it in a savings account.

Sounds like a very difficult situation for you both. Maybe a new treatment will be discovered by then. Can hope anyway!

Saving it in your own name can be risky too, for example if you ever need care or benefits it could alter your entitlement to state support.

@Changeychange1

Thanks all for replying and your kind words. I’ve always known, so I really am ok with it all, I just worry about her. On the plus side, I don’t need to pay into a pension so I can use the money that would’ve gone into a pension for her. Every cloud

I'm so sorry about your situation x

I don't know the details, but a pension is one of the best ways to save, and your pension pot can pass to your daughter as a lump sum if you sadly die before you're able to use it.

I’m really sorry to hear about your diagnosis OP

In your situation I’d consult a reputable solicitor about setting up a trust- maybe setting up something like a monthly allowance from 18-25 then coming in to any remaining capital at 25, when she’d hopefully be less likely to blow it.

You can’t know how sensible she’ll be at 18/25, so that’s not worth worrying about, but a sensibly worded trust could protect the capital.

I wouldn’t use the money to pay for uni fees - that’s genuinely not a good use of the money (read Martin Lewis on why not) but maybe let her have an allowance to top up her uni maintenance loan, leaving any leftover for a Masters degree or wedding or house deposit.

You say her DF is supportive- can he help her financially too?

An IFA might also be able to advise on whether investing what you already have saved is a good use of the money to ensure inflation beating growth. Maybe a Stocks and Shares ISA?

In terms of her losing money in a divorce, I’m not sure what can be done about that, but property covenants can be drawn up to protect her share of a deposit etc if she buys a flat with a future partner.

Do try not to worry; you’re clearly a great Mum and she’s lucky to have you. I hope you both get to enjoy your precious years together. Hopefully you’ll get more time together than you think.

Stocks and shares junior ISAs are IMO the best long term savings vehicle at the moment. They can have access at 18 though, so you’d just have to hope your dd would be sensible.

People like to talk about trusts, but I know someone whose children were lucky enough to have these until they were 25 from a grandparent, but the solicitors took absolutely forever to wind them up when the time came, and charged a bomb to do it.

Completely agree that this is exactly the situation trusts are for, I think you can even set them up so the money is protected in case of a divorce. A solicitor will help you set one up. I'm not sure if you can protect it from tuition fees if the trust is released to her (i.e. if you died before she went to university) - I'm not sure if they take into account the wealth of the child or just their parents. But you can look that up quite easily.

I'd just caution against using a solicitor as one of the trustees, as they'll charge for every tiny thing they do for her in the event of your death. My friend's father had one of the executor's of his will as a solicitor, and they charged an arm and a leg for the work they had to do when he died.

The other thing about a pension pot is that it doesn’t count towards the value of your estate for IHT. Nor would it be taken into account if you need care.

A LISA in your Ds’s name could be a good bet.

1. invest don’t save or the money or it will dwindle faster than you can say ‘stocks and shares ISA’
2. spend time making memories now
3. assign a trusted someone (Your sibling ? Godparent?) to help her out emotionally and financially when the time comes
4. try to stop worrying and congratulate yourself on your forethought

Put at least £1k of that into bitcoin - preferably more

Definitely look into trusts

Agree with others -with that amount of money put it in a trust fund that can only be accessed for certain things like house purchase.

Put some into a sipp too.

Op please look vanguard stocks and shares funds

You can open a junior isa for her and its very cheap to run, you buy a little of absolutely everything in their funds and its all based on principles of jack bogle.. Rather than flash in pan fund managers.

You'll grow her money.
Far far more then in normal bank account.

I would have some in normal savings.. Ie crap interest.. Some in pb and then her main capital not to be touched in vanguard. Then she has three savings pots for different reasons.