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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

WIBU to expect teens to spend child trust funds on university costs?

106 replies

flyingtartar · 02/06/2021 09:28

My dc are 14 and 12 so it's not an immediate issue but I'm increasingly thinking about costs when they are in university. The eldest is very academic indeed and it's so far looking likely that both will go.

I'm divorced and get nothing from ex who has been poor, although about to come into a considerable inheritance from what I hear, but obviously his contribution is not something I can depend on. From research I think I need to save about £7-8k per child. I earn about £50k and usually manage to save about £500 per month but also have to save £10k for a payout to ex when ds2 is 21 and have a number of largish jobs to fund around the house as well. Eg bathroom hasn't been touched in 30 years, just had to replace a faulty Velux window in ds1's bedroom, had to replace the kitchen last year as it was falling apart, my car hasn't cost too much up to now but has about 110 000 miles so won't last forever etc. There's always something that takes my short -medium term savings.

I have £26k put away from an inheritance and that would probably cover the £10k and most of the university costs but it would be tight and would then leave me with no savings.

I get so anxious about the future and money. Once travel opens up I'd love to take the dc to Canada as it's somewhere they'd both love to go and I absolutely loved travelling with them in Europe before Covid hit, but that would mean dipping into the £26k a bit. Not a lot, but I feel like I shouldn't touch it at all but then what's the point of everything if we can't have a treat now and then?

Looking at paperwork I've realised the dc's trust funds (the ones that labour gave out of £250) are worth about £7k - obviously ds's is a bit more. Would it be UR to say if needed at least some of this should go on the university costs? DS is adamant he doesn't want a car as he's very environmentally conscious and we live in a city and he will probably go to uni in a city too so he sees it as unnecessary. Obviously there is also a deposit for property but hopefully he'll earn well in his 20s (and ds2) and if I downsize at some point then I'll be able to help them out.

I would feel a bit more comfortable knowing using the trust funds is an option but don't know if it's completely UR.

OP posts:

reallyreallyborednow · 02/06/2021 10:40

Looking at paperwork I've realised the dc's trust funds (the ones that labour gave out of £250) are worth about £7k - obviously ds's is a bit more

Yep dc’s are about £500 now!

Sorry, but you seem more than financially stable. I only wish I could save £500 a month, plus an inheritance, plus 7k CTF.

Others manage on much less, I’m sure your kids will be fine.

Ctf is dc’s money. If they want to use it to pay of loans, house deposit or car then it’s up to them. It’s not actually your decision as they’ll be 18 when they get access.

Comefromaway · 02/06/2021 10:50

We made a conscious decision to use ISA's instead. For one thing dd is just a year too old for the trust fund and we wanted some choice over what ds used the money for so used the ISA rather than topping up the CTF.

MaddieElla · 02/06/2021 10:52

Mine has just turned 18 and has used it to pay for the first year's insurance on a car and put the rest in a savings account.

Using it to pay for Uni is more than reasonable, but ultimately it would be their choice as the money is theirs.

Original poster

flyingtartar · 02/06/2021 10:53

I'm glad most people don't see it as UR. I'll continue to save what I can I think but also know that it's there to use will be reassurance. I could maybe go 50/50 or something with them. I know when I was 18 an aunt gave me £2k she had been saving for me from birth (she was childless). I basically pissed it up the wall - didn't even do anything particularly memorable with it and it's always made me feel bad when I look back on her saving that and me just frittering it. I certainly wouldn't want the dc to do that.

Ctf is dc’s money. If they want to use it to pay of loans, house deposit or car then it’s up to them. It’s not actually your decision as they’ll be 18 when they get access.

I agree with this to an extent, but if they decide they don't want to spend it on university but they do expect me to make up the shortfall then it changes it somewhat doesn't it?

OP posts:

FeistySheep · 02/06/2021 11:00

I think it's fine too. Basically you are very generously providing a sum of money for them to use towards their future. I would look at it as they can choose whether they spend this on uni living costs, or on a house deposit, or on living costs whilst they do an apprenticeship, or whatever. You don't need to provide the money AND pay for uni! They can choose to invest it in their future in whatever way is right for them :)

ClashCityRocker · 02/06/2021 11:02

Maybe you're coming at it backwards.

When they get to say, sixteen, seventeen, sit them down and tell them that this is roughly the student loan they will get, this is what you can afford to contribute monthly and this is the amount they have at present in their CTF.

It's a good opportunity for them to get involved in their own financial management and a think about how much money they need to live on each month, how much rent will be, plus the initial costs of setting up etc. It also gives them the option of taking on a job in the holidays and saving for themselves.

But there's no issue with expecting them to use their child trust fund.

Ritasueandbobtoo9 · 02/06/2021 11:03

No, the Trust fund is there for this type of thing. Car, uni, house, whatever.

FlyingSquid · 02/06/2021 11:06

I would say:
You top them up to the max loan amount (I.e. what they would get if you had a low income). Then they choose whether to make up any shortfall by using their trust fund savings or working through the summer, or a bit of both.

Mydarlingmyhamburger · 02/06/2021 11:08

That’s what I thought trust fund were for, to cover uni etc..

Posieandpip · 02/06/2021 11:08

Why wouldn't rhey kuat take the loans? I don't know a single person of all my friends and classmates whose parents were involved in funding their university, we all got student loans

UserAtRandom · 02/06/2021 11:09

We plan to point the DC at their CTFs to make up the parental contribution to the maintenance payment. Yes, it's strictly theirs to spend on what they want but, other than the initial government payment (which would not be anywhere near enough to cover their university living costs now) DH and I have put in all the rest of the money,. We saw it as a tool to save for our children's future- and going to university is part of their future!

UserAtRandom · 02/06/2021 11:10

@Posieandpip

Why wouldn't rhey kuat take the loans? I don't know a single person of all my friends and classmates whose parents were involved in funding their university, we all got student loans

Loans are means tested based on your parents income and parents are expected to make them up to the full amount. Unless you've literally just left university, things have probably changed since you were there (unless you all came from low income families and got maximum loans).

Comefromaway · 02/06/2021 11:13

@Posieandpip

Why wouldn't rhey kuat take the loans? I don't know a single person of all my friends and classmates whose parents were involved in funding their university, we all got student loans

Because the amount of loan you get depends on what your parents earn.

I don't know when you went to uni but this has been the case for several years now. The full maintenance loan of around £9,000 is only available to those whose parents are on a low income. For everyone else they get less and the parents are expected to top up the amount.

titchy · 02/06/2021 11:14

Why don't you commit to giving them say £2500 - £3000 a year each while they're at uni, and if they need to dip into the trust fund they can. If they don't then they can use it for whatever they want once they've graduated.

That means that you have enough £ right now to fund them both and your ex.

So set up a new savings account and the £500 a month you currently save goes there ready to spend on a new bathroom and new car (by end of next year?).

Fupoffyagrasshole · 02/06/2021 11:14

Oh gawd you are definitely worrying too much! Take a holiday enjoy your life! Especially after this last year and a half! The future is so uncertain I’d be in the camp of just enjoy yourself a bit and relax!

Of course they can use the trust fund for living costs - they can also get jobs to help with money! Plus loans!

Lonecatwithkitten · 02/06/2021 11:15

I saved specifically in the CTF for uni £100 a month for 17 years. Choose a stocks and shares which has performed very well. My DD is really aware that I have saved all her life for this and that she needs to manage it well.

IEat · 02/06/2021 11:16

Please do your research Uni fees are paid for by Student finance and paid back at approx £8 a month if they earn over £26k (ish) and is then wiped out after 30 or so years. They get maintanance grants etc as others have said. You do not need to pay their fees. Maybe they get jobs at Uni like many others or help them when they’ve overspent for the week.

NamechangeApril21 · 02/06/2021 11:16

My parents didn't help out with my university at all. They weren't massive earners but enough to stop me being entitled to any grants. (They also had a massive mortgage on a negative equity house so things were tight). I just got a maintenance loan (as well as tuition loan) - it wasn't means tested at the time but this may have changed? It was just shy of 7k a year, so between that and a part job I managed fine with no input from parents. Is it worth looking into the maintenance loan?

Comefromaway · 02/06/2021 11:17

@IEat

Please read the thread!!!!!

The OP has never said the money will be used to pay the fees but for the difference between the maintenance loan her children will get based on the OP's income and the maximum amount.

Blinkingbotheration · 02/06/2021 11:18

This is exactly what those trust funds were set up for - why on Earth wouldn’t you use it for Uni?! Your kids will also be able to get themselves part time employment & pay for themselves a little!! (Unless doing something like medicine). Yes, you may need to fund them a little but they should also be responsible enough at that point to help with their own future!!!

Comefromaway · 02/06/2021 11:20

@NamechangeApril21

It has changed.

Today you would only haver got around £4k

Comefromaway · 02/06/2021 11:22

And the OP has looked into it. She's put her income figures in and come up with the approx maintenance loan her kids will be entitled to. Which is about £4k per year per child short of the full loan.

spotcheck · 02/06/2021 11:23

Bonkers to use it all for uni.

They CAN still get maintenance loans, which is income assessed- which I think you know. Yes, you may have to top up. There are ways of keeping costs down, and there are various bursaries which are not income assessed. Many students bridge the gap between the amount they receive and the amount they need by choosing cheaper accommodation, a job, careful budgeting and bursaries. Some chose a degree apprenticeship instead of traditional university.

Owning a home is swiftly becoming more and more of a pipe dream for many young people.

That money signifies a great opportunity for them to get on the housing market quicker. Do you REALLY want to take this away?

Going to university does not mean they won't end up in a low paid job. Many professions require a degree but don't pay especially well.
Using that money means your life will be slightly easier financially for those few years, , but will make saving for a house much harder on them long term.

MintyMabel · 02/06/2021 11:23

I agree with this to an extent, but if they decide they don't want to spend it on university but they do expect me to make up the shortfall then it changes it somewhat doesn't it?

Have they said they expect you to pay for it? Have a discussion with them. Regardless of the CTF, the conversation you are having with them is whether or not you can afford to pay for them to go to uni and how much will they need to make up themselves.

We have a CTF for DD and also have been able to save some money for her. We’ll be paying for her at uni regardless of that because we can afford to do that. If we couldn’t, we would be discussing that with her.

CoRhona · 02/06/2021 11:25

Mine took his birthday money and what he earned and funded himself. Would not accept any money from us.

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