Borrowing child’s savings...

[Quckname]

Do you think the following is acceptable?

Parent has some expensive debt on credit cards. The interest free period is expiring and the parent is not able to get a loan or balance transfer to a lower rate.

Child has an instant access savings account with some money in.

Is it ok for the parent to borrow funds from the child to repay the expensive debt, as long as they ensure that the savings are repaid (with interest) before the child would have used the account?

So as not to drip feed:

• money in the savings account was paid in by the same parent (not friends & family)
• money would be repaid along with the compound interest that it would have accrued in savings
• repaying to the child’s savings would take approx 3 - 4 years, compared to it taking 20 years plus to repay on the credit cards with high interest
• child is still young so not due to receive the savings for a long time
• the child has not been asked for their opinion because they are too young (and too generous) to make an informed decision
• parent has explored and exhausted all other options to reduce the cost of borrowing
• if paid off, the credit accounts will be shut down so that it is not possible to accrue large debt again

What do you think?

YABU - borrowing the money is the same as stealing, the parent shouldn’t touch the child’s savings and should repay their debt over the longer period of time at the high interest rate.

YANBU - the money will be repaid to the child’s savings, and the child will benefit from having a parent that is not stuck in long term expensive debt

3-4yrs to pay off!!!

The parent should speak to a debt advisor and get professional help to sort their mess out!

@BeagleMomma

No.

My parents used £3000 to clear off debt that my grandma had saved for me. Never got it back.

Whereas when my brother got to 18 his was still intact and he got it all.

I've never quite forgiven them.

This is obviously very unfair!

@driftcompatible

It's stealing. And if you've got into this much debt that you need to take from your child then I highly doubt you'll commit to paying the child back. Your debt isn't their responsibility.

Actually it wouldn't be stealing.

Theft in English law is the dishonest appropriation of another's property with the intention of permanently depriving them of the property.

There is no intention to permanently deprive, therefore theft is not being committed.

@SuperbLyrebird

YABU. It is stealing

Oh don't be daft.

Do it, OP. You're the parent and I'm sure you'll do the best for your DC.

What is it then? What do you call it when you take money that isn't yours from someone without their consent? Stealing. Doesn't matter who gave the child the money or how old the child is, that money has been given to the child. Check your morals. My god.

@seaandsandcastles

YABU. It is stealing, the money isn’t yours and in all likelihood even with the best of intentions the money won’t be paid back.

Ridiculous beyond belief

The money has been paid in by the parent so I see no issue with it as long as the parent pays it back. However I would be concerned as to why there was so much debt built up in the first place and has the issue of spending so much beyond their means been dealt with.

What is it then? What do you call it when you take money that isn't yours from someone without their consent? Stealing. Doesn't matter who gave the child the money or how old the child is, that money has been given to the child. Check your morals. My god.

@driftcompatible please see my post above yours. This is not theft under English law.

But it is theirs? Its a pot of money THEY have for the child. Probably one they shouldn't have saved given other problems. As parents we can change where our money goes. Im sure her children would rather they have food/electricity than save for the their future.

We’ve done it, the child benefitted from the money spent plus the extra saved by not taking on a debt plus we paid it back quickly so they will still get the money. I can imagine lots of parents ‘borrow’ and don’t end up paying it back though.

No I wouldn't do it.

@Lockheart

"There is no intention to permanently deprive, therefore theft is not being committed."

If the mother can't pay off her own debts that she needs to take from a small child then it won't be paid back. Don't be so gullible.

Quote all the legal terminology you want. People who take from their children because they made poor financial decisions are morally in the wrong. If you condone this then that's your business but doesn't say anything positive about you. No matter how good you are at quoting.

If they can't pay a debt, how the hell will they be able to pay the child back. Think this is an awful thing to do to a child.

Does the child know about the account?

To try and answer some of the questions so far....

• parent has always paid money into the child’s savings, as a monthly standing order since birth
• debt was incurred at a time of very low income, income is currently more stable and secure
• the debt is quite old, around 60% has already been paid off while utilising interest free balance transfers between different lenders
• parent has been able to afford repayments for a number of years, and still can, however now that the interest free period is over it means that only a tiny amount of each payment would go to paying the debt, hence it taking so much longer

Wow some people are nuts. Or dont realise what its like to live on a low income. Most wonr be able to save any money for their children as its swallowed up by bills/uniforms/ daiky living.

And you're saying they should prioritse saving over that!? Wow.

[quote driftcompatible]@Lockheart

"There is no intention to permanently deprive, therefore theft is not being committed."

If the mother can't pay off her own debts that she needs to take from a small child then it won't be paid back. Don't be so gullible.

Quote all the legal terminology you want. People who take from their children because they made poor financial decisions are morally in the wrong. If you condone this then that's your business but doesn't say anything positive about you. No matter how good you are at quoting. [/quote]
Whether they are able to pay back or not is not the test, intention is.

It is demonstrably incorrect to call it theft.

Only if it will be paid back. Is it money the person is saving up for the child if so, that’s ok.

Yes saving whilst in debt is mad.

Absolutely YANBU, as long as the money will DEFINITELY be paid back.

How old is the child? Are they likely to need it in the next 3-4 years? If not then do it.

Why have you been saving money for a child instead of paying off your debt though?
You need a financial education! I recommend MoneySavingExpert.

20 years vs 3-4 years doesn’t sound right.

@DrManhattan

No I wouldn't do it.

Hmm I doubt the ability to pay it back with interest.
However, if it was paid in by the parent, as opposed to a grandparent, then I think that makes it less bad. And circumstances do change, if I mentally earmarked some money for DD but then I needed it, is that more acceptable because I hadn’t actually paid it into a savings account for her.

But clearly the parent needs to get control of their financial situation, and that seems like a far larger issue than this specific money.

Would the amount help clear a large percentage of the debt?

I wouldn't do it. You've proved you struggle to pay back 'borrowed' money with interest so there's a high likelihood that you'll have the same struggles with this money.