Savings for children

[DomPom47]

I have two kids and and have recently gone back to working. My partner and I don’t have parents who are in a position to leave anything in inheritance and our parents were not in a position to help us get on the property ladder and this is fine as we both come from very loving homes and consider ourselves lucky. I do however want to be in a position to give a little something to my two children when they get to 18-25 to help them with a contribution be that a deposit for a home or something else. Realistically we could probably get to around £10,000 per child this will be combined with husband and I putting something aside for the next 8-13 years. Want to know what other mums goals are re savings for children and whether you think I should spend money on experiences like holidays instead.

I put my sons child benefit into premium bonds for him which will be about £20k by the time he’s 18 even without winnings. I also add 1/3 of money he’s gifted for birthdays and Christmas although the older he gets the more he wants to spend it all on toys 😆

I still feel that we have enough experiences to not feel like he’s missing out, and I’m not telling him about the money so hopefully by the time he’s old enough he will have a good chunk towards a deposit on a house, something I struggled to be able to do

I’m not putting any savings into my children’s names. They are both disabled and having savings in their name may prevent them from accessing certain employment schemes if otherwise eligible and various other things. So I’m just saving stuff in a separate savings account for them.

We put DSs child benefit in a regular saver and top it up to £100 a month. I realise we are fortunate to be able to do this. I genuinely didn't realise we would get it as we are both working and earn decent (not huge) salaries, so when I found out we would it seemed easy to put aside. We've done it since he was born.

We have one DC. At the moment, we save £100 a month in a Halifax Kids saver, £9k in a Junior ISA annually and family buy premium bonds rather than give birthday/xmas money. The ISA will continue to be added to as long as DH has his current job. When that's finished (another 2 or 3 years maybe), the ISA will be invested elsewhere and we'll continue with the Kids Saver, however much we can put by.

We've put £50 into a saver account every month since DS was born and will to the same for our second baby. We have split that into half that he will automatically have access to at 18, and half that he will have access to for things we 'approve' of such as a house deposit, car, university fees etc. So £10k in total plus whatever interest is accrued over the 18 years.

I took advantage of the government scheme in 2003 - the pot was transferred to a low risk stocks & shares product. I’ve paid £30 a month into it and it was valued at £17k when she turned 18 a few months ago. Not a bad return and it exceeded the forecasted growth.

She is now considering the ISA where the money will be used for a house deposit in years to come. I think you can put max £4,000 a year in to receive a 25% bonus, whilst the remainder will stay where it is and not be frittered away.

We save for our kids but not in their names as we don’t know what they will be like at 18 - we want to hang back and give it to them when the time is right (such as first house deposit or whatever) not when they might just blow the lot on a tattoo and holiday (or whatever).
If they turn out sensible that may be a non issue. Depending on how life pans out they might need it for uni or education, or a car, or a house - one might need it at 18 the other at 22 - who knows?

I wouldn't put the money aside if it means you have to do without holidays or other experiences/possessions now, but it's probably worth making savings for DC part of what you spend your disposable income on.

Don't get fixated on any particular sum. Anything saved will be useful towards university, driving lessons, house deposit/set up own home etc but you have to balance enjoying life while they're younger.

@Shmithecat2

We have one DC. At the moment, we save £100 a month in a Halifax Kids saver, £9k in a Junior ISA annually and family buy premium bonds rather than give birthday/xmas money. The ISA will continue to be added to as long as DH has his current job. When that's finished (another 2 or 3 years maybe), the ISA will be invested elsewhere and we'll continue with the Kids Saver, however much we can put by.

How will you invest the Junior ISA elsewhere when you can’t withdraw money from it?

£100 a month into premium bonds.

From birth.

What will you be sacrificing to save it? All holidays and experiences etc? Or will you still he able to have a family holiday and the odd day out?
Children benefit from holidays / experiences.

I have a new DS and planned to save at least £100 a month (maybe up to £200 but not sure id be able to pay £200 each for two children if we were to have another) for him every month until he is 18. Need to look into the best way to save (maybe premium bonds) and also wondering whether to pay less before I go back to work as I will be on reduced pay for some of my mat leave. My parents helped me a lot with university fees etc and I would like to be able to do the same.

@ MaskingForIt

When he's 18 we can.

I started pensions for my kids. My eldest child's started with me paying £20 each month and it crept up with a 10% annual increase until it got to £50 where I have frozen it. Started straight in at £50 for younger one. I focused on pensions because I read that (due to compound interest) if you paid in monthly from 0-18 years then stopped they would have more money at retirement than paying the same amount monthly from 18- 65 years. I hope to keep it going in their adult years though.

They will have small savings to have at 18 of probably a couple of grand each.

For university I hope to be able to help with a monthly payment from our current income. Hopefully £300-£500 each month would be realistic. Our kids are 8 years apart so shouldn't need help at the same time.

House deposit - my kids could live at home to save if they want to. Otherwise I think they will need good jobs/a partner/ humble first property if they want to buy. So many threads on here where gifted deposit money causes issues between couples (ringfencing etc).

I had been putting £100 per month into DDs Halifax saver (can’t remember what it’s called but they have a high interest one). Just about to start mat leave with DC2 so once I go back to work next year I’ll start again. Will need to split it out between them so probably realistically £50 per month each for now. I’m really conscious though that DC1 will have more than DC2 so wondering whether I need to divide it up and start again!

I’ve also been considering transferring the lump sum that I’ve saved each year into a child ISA.

I've got a mix for DS. Easy access savings in his name for big expenses as he grows up if needed. S&S ISA which is the insurance payout after DS2 was stillborn which I've told him (in a letter - he's two!) is for anything he likes as it's from his brother, not us, so doesn't have to be sensible. I have decided to put a few hundred a year into this to top it up.
Other than that, savings will be in our names in case he's not that sensible at 18. Playing the long game.

Thanks for this. I have as you say fixated on a set amount which is stressing me out so will instead save whatever is left each month.

Savings would be as opposed to holidays but in hindsight seeing some of the comments it is true that holidays and other experiences are important foe the kid’s so going to rethink our planning with some money to go into an experiences/holidays pot and whatever is left each month to go into savings for the kids. Desperate to do well by them but also don’t want to be tightening belt so much so that they don’t enjoy certain things like a family holiday or a great hobby.

We would like to help them, but prioritising paying off our own mortgage before saving for them so overpay to reduce interest. We should pay it off in time to help them through uni and with a house deposit.'l

We couldn't afford to save much until DS was around 3 so until then we put away small bits here and there and any Christmas/Birthday money.

At this point we had more disposable income due to a variety of things so started putting away minimum his CB and sometimes topping it up to £100 per month.

Don’t save a set amount or have a target unless you can afford to.

Don’t go without now or miss holidays, parties, new clothes for DC or extra curricular activities in order to scrape together a set amount to give them at the age of 18.

Save what you can afford and don’t worry what other people do. £10 or £20 a month will add up to a very useful amount at 18.

Remember not to give it to DC though- keep it and help them out as necessary. It would awful otherwise if they blew it all in the first weeks of uni after all your hard saving.

If it has to be one or the other then I would take them on holidays & days out. Make memories with them.
We save a lot for our 3 DC but everyone’s circumstances are different. Like you said- you haven’t received any money and you know you’re from a loving family. Aim to give your children that.

I agree you shouldn't go without holidays etc as experiences are important. Can you just see what you have left at the end of each month or pay a smaller amount? I plan to save £100-200 (more likely £100-150) but I wouldn't expect that to have a significant impact on my spending for the month.

We have savings accounts for both of ours and each transfer a set amount each month. Tbf, I don't even know how much as set up as standing order. We also sometimes put birthday money in there if it's a significant amount.

Personally, we don't have specific long-term savings goals for them. I think it's sensible to set aside a certain small amount regularly, but our main goal is to provide well for them now - a nice house, good life experiences, private education eventually if we can afford it for secondary school. Dh and I both earn well and will have a significant investment in property by the time dc's are off on their own living their adult lives. I'm confident we'd be able to afford to help them then when they needed it, but I don't feel I need to stress too much about any specific savings goals for 15-20 years from now. We'll cross that bridge when we come. I think giving them the best possible life now and making sure as a family we are financially secure is more important.

That said, while my family certainly helped me here and there in my 20s, no one ever opened a savings account for me as far as I'm aware. Though I did often get birthday money, who knows where that went! Because it never explicitly came to be when I hit adulthood, so I imagine it got absorbed into the family pot to pay for necessary things, which is fine.

Save as much as you can monthly without sacrificing family holidays and other experiences.

We contribute monthly through Hargreaves Lansdown for DS(6) -

Stocks & Shares ISA
SIPP (pension)

In our name through HL we have a University fund, and mortgage deposit fund for DS. We have kept these in our name as it’s a risk depending on what the child is like at 18 and we don’t want the money squandered.