Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Borrowing child’s savings...

470 replies

Quckname · 12/09/2021 12:02

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

OP posts:
TableFlowerss · 12/09/2021 13:09

wouldnt even be any savings I mean.
And she’s going to pay it back.

Gingernaut · 12/09/2021 13:11

If it can be guaranteed the savings will be paid back with generous interest, then it is not a problem.

thedancingbear · 12/09/2021 13:13

There appears a very significant possibility that this money would never be paid back. If the account in the OP was accurate (ie. there was no risk of the money not being restituted) then this would be a grey area. But that is unlikely to be the reality.

GreyhoundG1rl · 12/09/2021 13:13

Maybe you have to be realistic, op, and accept that with the sort of financial mismanagement you describe, you're in no position to make separate provision for your child.
Harsh as that may sound.

TableFlowerss · 12/09/2021 13:13

@ManifestDestinee

YANBU. You put the money in, it's your money.

Anyone saying its stealing and you shouldn't is daft AF. Should you be stuck in debt for years, taking money that could benefit your child, just so randoms online don't call you a theif? Fuck that.
The right thing to do for your kid is sort your finances out. Borrow the money, put it back later.

This
Tupla · 12/09/2021 13:13

Legally, I wonder if there might be an issue with using money from a child's account (which often has a higher interest rate and is not taxed).

Morally, then there isn't an issue. The parent planned to give the child this money at age X, and will still be doing that. At the moment, it's stuck in an account not benefiting either of them.

You say that the child is too young to give an opinion, but when they are old enough, which would option would they prefer had happened?

I have been in debt with a small child and it's really difficult trying to pay it off while protecting the child from the effects as much as possible. If the parent doesn't "borrow" the money, there may be repercussions for the child over the next 20 years, as inevitably some of the money has to be scraped from what would be spent on the child. That includes things like holidays, school trips, after school activities, etc., which the child would lose out on for the rest of their childhood.

WaterBottle123 · 12/09/2021 13:15

It's fine!
I did similar. - paid DC back ten times over now

BeenAroundTheWorldAndIII · 12/09/2021 13:15

It's not stealing 🥴 surely all parents try put a bit away for children when they grow up, but until you actually give it them it isn't actually theirs.
I have a savings account for my two, but I wouldn't dream of being in debt and struggling to pay the bills/food/clothes whilst that money was sitting there for about 15/16 years. It makes no sense at all. Obviously if the money had been gifted it wouldn't be mine to take. But it is my money, just hopefully it will be gifted/spent on my DC when they are adults.
My mum paid into an account to give me at 18, well at 18 she needed the money 🤷🏼‍♀️ so she kept it. She did give me the equivalent a few years later when she retired but she didn't have to.

GreyhoundG1rl · 12/09/2021 13:15

The parent planned to give the child this money at age X, and will still be doing that.
Well, no. Best to realistic and accept they will not be doing that.

salemcat · 12/09/2021 13:15

Parent put the money in, parent needs to use it, not an issue.

flibberyjibbery8 · 12/09/2021 13:18

As someone who as been and done it I'd say be realistic with yourself. Is it really going back, if you've put yourself in this position in the first place? It's probably unlikely.

I did this about 5 years ago and guess what? It's not back. Maybe it will be one day, I hope so, but I do wish I'd not done it.

BlackShadowCat · 12/09/2021 13:18

I suspect it will never get paid back. The parent really needs to get help and sort out their spending and debt. It sounds like the whole thing has spiralled out of control.

BasicDad · 12/09/2021 13:18

I put savings into a Junior ISA and Junior SIPP, so it can't be touched. When times have been tougher, I've paid less or none in. Would never raid though. Glad it's locked up as no guarantees that EXW wouldn't have tried to raid...which I think should be a consideration for all parents, as accessible cash is at risk of being abused.

ThinWomansBrain · 12/09/2021 13:20

why on earth did the parent build up credit card debt and put money into a savings account for the child simeltanously (presumably if the child is that young)

Original poster
Quckname · 12/09/2021 13:21

@Tupla
**You say that the child is too young to give an opinion, but when they are old enough, which would option would they prefer had happened?

DC is very generous, and self-less, and would gladly give the money away to me or anyone else. That’s why I haven’t asked them, I think they are too kind to others to consider their own best interests. They could make a decision now, but it wouldn’t be an informed decision.

OP posts:
Slippy78 · 12/09/2021 13:22

The money belongs to the child and as they are under 18 they can't legally agree to lend it to you. Most banks won't even let you withdraw the cash anyway if it's not being transferred to a different children's saving account.

YABVU as you would be stealing the money in the eyes of the law.

SoloISland · 12/09/2021 13:23

Borrowing is surely with the owner;s consent.

Else it is misappropriation or theft.

If they had the means to put money away for the child then they had the means to put money away for future need or nor get into difficulties?

Loopylobes · 12/09/2021 13:24

I'd borrrow the savings to clear the debt and then, if possible, get a loan at a sensible interest rate to pay the savings back.

Disfordarkchocolate · 12/09/2021 13:27

I think if someone has got into this much credit card debt then the chances of them repaying the money to their child and not maxing out that empty card are zero.

Step Change, Christians Against Poverty and Money-saving Expert are where you need to be, not taking money from a child.

SylvanasWindrunner · 12/09/2021 13:27

Borrowing money to pay back money you borrowed to pay back money is bonkers Confused Don't do that. Just pay off the debt and set up a standing order to go back into savings and build it back up.

Whitefire · 12/09/2021 13:28

@ThinWomansBrain

why on earth did the parent build up credit card debt and put money into a savings account for the child simeltanously (presumably if the child is that young)
This is an important lesson for anyone potential sliding into this situation. The OP made the mistake of thinking she would have the 0% deal for evermore and was simply servicing it until she could take out a new deal. Everything should have been thrown at reducing the debt and that means not putting money into a savings account for a child.
Original poster
Quckname · 12/09/2021 13:29

I had DC when I was quite young. In my naivety I believed that I should always be putting DC first and desperately wanted them to have something for when they are older, even if I couldn’t really afford it. My initial way of viewing the finances wasn’t wise, but this was quite some time ago and I have learnt / matured / adapted since.

DC is top end of primary age, so not tiny toddler, but not due to withdraw the money any time soon. I’ve been more realistic with money in recent years, this is just an old problem that is still chasing me.

OP posts:
Whitefire · 12/09/2021 13:31

@Loopylobes

I'd borrrow the savings to clear the debt and then, if possible, get a loan at a sensible interest rate to pay the savings back.
That is absolutely stupid and dangerous advice.

(Sorry I will not mince my words)

Original poster
Quckname · 12/09/2021 13:32

@Whitefire absolutely this. This is exactly where I went wrong, I thought I’d always be able to exploit 0% offers and then suddenly I couldn’t. Lesson learnt (the hard way), but now trying to move forward.

OP posts:
Whitefire · 12/09/2021 13:36

OP I think you are absolutely doing the right thing. Don't be afraid to reach out to one of the aforementioned debt charities if you feel you need to.

Good luck.