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.

We will get our children through university debt free if they decide to go (I know the arguments for and against). They both have savings from small model/tv work that will allow them to learn to drive and buy a car or put towards a deposit. We will probably have saved about 20k each for when they finish university.

We have a mix for different things. If you’re saving over a period of 10+ years then a S&S ISA is a better vehicle to avoid being overtaken by inflation. Vanguard do good and cheap tracker-based funds.

The kids have a junior isa each in their own names with some money from GPs - we may top this up a bit as we go along, but not go crazy as we don’t want them to spend it all at 16 or 18! That is notionally earmarked for something like travelling or buying a car. They also have a regular savings account for birthday money.

For university etc we have a S&S ISA in our names. By way of illustration, if you started now and paid in £400/mth for 15 years, assuming 5% average growth, you’d have >£100k.

We are using it as a general medium-long term savings pot - stuff we will need to spend in our 50s, rather than in retirement. We won’t need all of it for uni costs, so the rest we can use help them out with a deposit. Or fuck off on a world cruise! By doing it in our names it gives more flexibility.

I have a S&S ISA in my name, which i plan to use towards living costs at Uni/house deposit if they don’t go to Uni. I might put this into their names later on, but for now I guess I’m not in a position that I can guarantee that I won’t need it myself.

I put £20 a month away for DS. I'm absolutely not saving up to help him with a house deposit, he's welcome to live at home for as long as he likes while he saves up for one himself but I'm a single parent and I'm not going to martyr myself and live on broth and wear rags just to help him with a deposit.

We have a Stocks & Shares ISA for DC. There is a much better return on these than on a High St bank but you really do need to know what you are doing with these unless you let the provider do it for you.

Also have a separate university fund but if he doesn’t go to uni then we will use it for something else like a house deposit etc.

I started a pension fund and a S&S Isa with Hargreaves Lansdown for DS when he was born. The govt top up the pension fund so it’s ‘free’ money if you invest well. He’s 9 and his SIPP is already worth more than mine!

Also have a couple of Halifax kids’ savers accounts - normal and monthly. They give pretty good rates of interest.

We save around £50 a month for DS, sometimes a bit more, sometimes a bit less. It depends how much he’s needed that month in the way of clothing, shoes etc! He’s 5 and currently has £3k which is split between a junior ISA and an easy access savings account. I keep meaning to switch the ISA to a stocks and shares one so it’ll make more that way.

We’ve recently put cash into junior stocks and shares ISAs for Gdcs, who are still little.
Should be a considerably better return by the time they’re 18 than any ordinary deposit a/c savings. I think they are with Vanguard, who so far seem to have some pretty well with a pension pot dh put into them.

We do £100/ month per child. £100 for birthday and Christmas. Most our family give them money for special occasions instead of toys. So it’s about £1,700 a year/child

@Winter2020

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).

Do you mind me asking what pension provider you use please? I’ve looked online for pensions for my kids but haven’t found one that accepts less than £50pm!

I have a Junior ISA for DD. She's 5 and has 1k. I'm not sure what she will have at 18 as I don't put a regular amount in, just shove some in as and when.

I didn't get anything at 18 from my parents, but they did put a few grand into a private pension for me over my childhood years.

The part that worries me about savings in their name is that once they’re adults they can then do what they want with it whereas if I’m going to make significant sacrifices then they go and spend that money on holidays etc then I’d be upset as when I save for them I imagine it to be for a car, university fees, a house etc.
I don’t save a set amount, I put in what I can and since my second DC I don’t save anything but will at some point again. I’m tempted to move it to a savings account in my name though that is put aside for them so that I have that money to gift them when they’re older

I’ve got a child’s isa and have a standing order of £10 a month into it. It’s all I can afford right now but I do hope to increase. I really like the pension idea from aPP above though.

We put £15 a month in a kids savings account for DS plus money from birthdays and gifts from Grandparents when he was born etc. He's got about £2500 in there now and he'll be 3 in September. A house deposit isn't realistic on our income but hopefully he'll have enough for driving lessons and a cheapish car once he's old enough or a bit of a buffer for Uni if he decides to go. I'm hoping he'll have about £8-10K by the time he's 18

I saved the child benefit from when the children were first born until we were no longer entitled to it. Then I saved from income. This was earmarked for university. We paid for driving lessons but will not provide funds for a car purchase. I used normal bank/building society accounts and child ISAs.

With some additional help from my parents and brother I should get them through university debt free. I have done this (despite opinions to the contrary on student loans/tuition loans) as I was lucky to leave university debt free.

We also save into help to buy ISAs for them and more recently I have started pensions for them.

If I had my time again with the knowledge I now have I would do things a little differently: I would start the pensions from birth and I would save for university etc using S&S ISAs in my own name. This is not because of problems (no wild 18 year olds blowing the stack on my watch) but realisation that I have missed out on growing their pots bigger (compound interest/stock market returns better than high street returns).

If I get the opportunity to save for grandchildren then I can address those issues.

I put £100 pm into a Halifax high interest saver which automatically transfers to a normal saver at the end of each year. I also save any birthday money or Christmas money there and she gets some small pocket money from her Nan which she is too young to really spend so that is also added. I am considering starting a pension for her when I have funds to. I will separately budget for uni and hope to pay something like £200pcm for food and general expenses and the rest she can use loans, work and save as I did. I wasn't helped on the property ladder but hope to help her by letting her live at home paying rent which I will save and also match any savings from any part time job she has as an incentive. She is very young and I started at birth so hope its enough. It does worry me as times are tough even now for people and things like covid show financial planning is important. I feel responsible for setting her up a bit to cushion any challenges in the future

@Newmumatlast

I put £100 pm into a Halifax high interest saver which automatically transfers to a normal saver at the end of each year. I also save any birthday money or Christmas money there and she gets some small pocket money from her Nan which she is too young to really spend so that is also added. I am considering starting a pension for her when I have funds to. I will separately budget for uni and hope to pay something like £200pcm for food and general expenses and the rest she can use loans, work and save as I did. I wasn't helped on the property ladder but hope to help her by letting her live at home paying rent which I will save and also match any savings from any part time job she has as an incentive. She is very young and I started at birth so hope its enough. It does worry me as times are tough even now for people and things like covid show financial planning is important. I feel responsible for setting her up a bit to cushion any challenges in the future

Totally agree about the feeling of responsibility for cushioning for the future.

@FrDamo

I saved the child benefit from when the children were first born until we were no longer entitled to it. Then I saved from income. This was earmarked for university. We paid for driving lessons but will not provide funds for a car purchase. I used normal bank/building society accounts and child ISAs.

With some additional help from my parents and brother I should get them through university debt free. I have done this (despite opinions to the contrary on student loans/tuition loans) as I was lucky to leave university debt free.

We also save into help to buy ISAs for them and more recently I have started pensions for them.

If I had my time again with the knowledge I now have I would do things a little differently: I would start the pensions from birth and I would save for university etc using S&S ISAs in my own name. This is not because of problems (no wild 18 year olds blowing the stack on my watch) but realisation that I have missed out on growing their pots bigger (compound interest/stock market returns better than high street returns).

If I get the opportunity to save for grandchildren then I can address those issues.

If they choose to go to university many moons from now would love to be in a position to ensure it is debt free/as low debt as possible. Wish it were free as I think it puts some people off but don’t want the issue of money to be a thing if this is a route they end up taking.

I think my best recommendations to anyone hoping to smooth the way for their offspring, assuming all the basic family needs are already being met and serviced, would be:

START EARLY

EXPOSURE TO THE STOCK MARKET (S&S ISA eg Vanguard) and in your own name for control from potentially wayward teens

SOMETHING IS BETTER THAN NOTHING - small amounts can still grow

PENSION PENSION PENSION

This approach might not suit everyone and I'm still learning from my mistakes and hindsight, hence why I'm already thinking about future generations.

MuchTooTired
My children's pensions are with Virgin money. I chose a UK stock market tracker but there are various funds.
It seems you can invest from £1 (if the document I found applies to the Children's pensions too).

I save very little in my DCs names - a couple of things where it is advantageous for tax but I prefer to keep control.

Ive seen too many disasters where mum and dad have had to hand over large sums at 18 to reckless teens which have caused enormous heartache.

I will buy them cars when they’re 17 and give them money at 18 and 21 for “fun”. Bigger sums will be given depending on their stage in life and what they need.

Wow some om here can afford to save a lot! We're doing just £10 a month, it's better than nothing and we cant really afford more

A cash isa for them, which is for car/lessons and I hope forms they basis of an accounting they can use for wages etc.

Then more in a stock and shares isa.
I hope to teach them about investing and capital.
Through covid ours have been running between 20 and 32 %

V. Cash isa 1%!!

I've also got a few hundred in nationwide cash card account and I have split it all up so the view difference in pots, hurdles and barriers. And functions.