AIBU about child savings?

[pinkunicorns54]

Happy to be told I am being unreasonable just need some perspective!

We currently have a junior ISA set up for our toddler. Saving roughly £80pm - I suddenly have a sudden thought of if we are able to do this until they are 18, there will be a fair whack in there - I'm nervous about them having access to this when they are 18 and maybe not have the maturity to know how to manage this!

My DH thinks that we will be ok just instilling financial education into them when they are growing up and if they do decide to blow it on things I wouldn't want them to - then we just need to suck it up as it will be there's...

I'm of the view that we save in our names, so we have more control over it...

YABU - leave it in their name

YANBU - save it in yours!

Happy for anecdotes from people who have done similar / have grown up children!

Yes..I have some in dc name but am now saving in an ordinary account..just in case..she's only 12

I'm with you on this, I hope DD will be sensible enough to use money wisely at 18 but let's be realistic, how many 18year olds really wouldn't splurge on crap if given a load of money.

So I do £25 in a junior ISA which will be hers at 18 and £150 a month into a S&S ISA in my name which will be hers when I decide she's ready. It might be when she's 18 and needs money for Uni, in which case I'll use it month on month to pay for whatever student loan doesn't cover (if student loans still exist in 10 years) or it might be when she's 25 and needs money for a house deposit or wedding or travelling...

Not many 18 year olds will want to spend on what you want them to spend it on.

We have their money separate accounts in my name. Mine will get this when they need it for something substantial.

Be aware that if you go bankrupt in 10 years time and the childs savings are in your name, then they are gone.

Put the savings in your childs name, make sure it's a stocks and shares ISA, invest in a simple global tracker and let compounding work it's magic.

Educate them financially and pray that they actually listen.

My friend inherited £50,000 at 18 and by age 20 she was penniless with nothing to show for it. What a waste

I pay into a childrens savings account for DC as it’s got a good interest rate with the intention of removing it before they are 16 and for it to help pay for university should they go.

I’d save in your names. Both for the 18 and loss of money issue and because you don’t know what the future holds. While it’s great to have savings for kids circumstances can change in an instant and you might need the money for an emergency or unforeseen situation.

Not really much help but, the type of account my grandparents had for me meant that when I did have access at 18, I was only able to access the money either once a month or 3 times a year and they both affected the amount of interest earned on my savings. This meant I really had to think about the money I'd be withdrawing. It lasted me ten years as I couldn't just go withdraw it easily!

Nope…. I’m not saving in my kids names for this reason.

Hope for the best (and will do my utmost to assist them in becoming financially literate) but plan for the worst.

If they’re ready for it at 18, I’ll give it to them at 18. More likely it’ll be 25.

Definitely save it in your names. Even a sensible child might find it difficult if they have access to a large sum of money at 18. I think it's far kinder to take the pressure away and give them access when they're older, less influenced by peers and have a purpose for the money such as a house deposit.

That is what your 3-months-salary emergency fund is for.

After paying off any debts, the emergency fund should come next and then start to save and/or invest.

This is the reason we didn't do junior ISA. You never know where they will be at 18.

As a pp said, any savings in your name will be lost if you become bankrupt and would also be taken into account if you need to claim means-tested benefits. This may not affect you in which case saving in your own name is probably safer so you can make the decision when they get the money.

I'll be giving them about 20k each from their ISAs and it's definitely a worry. I can't save in my own ISA for them though as it's not got enough head room. Oh well, I'll probabaly lose my job in the recession and it'll be a non- problem!

It's not always the case that an 18 year old will fritter the money away!

My DS inherited some money from my DF when he was 14. It was put in trust until he was 18 and from the time he received the money we talked to my DS about how his grandad wanted him to use it for a house deposit. When my DS was 18 he was given the money and he bought himself a gaming computer he had always wanted and put the rest down as a large deposit on a flat which he rented out. The money he got from the rent went towards his Uni expenses and now he has been through Uni it either supplements his monthly income or he saves the money.

He is 22 now and deals with any problems regarding the flat himself, so it's been a real life lesson for him but he has proved to be very sensible.

It depends if you're maxing out your own ISAs or not and what your general tax position is. But I'd do a bit in the JISA but most in your name.

At least until they get older and you can see what they are like with money

Another option may be to split the investment between a S&S ISA and a junior SIPP. At least that way, half the money should be secure and can keep on compounding until the toddlers retirement age.

Your husband is naïve if he thinks he can stop it happening through good financial education - though he certainly might!
More sensible is his recognition that you might just have to accept it being pissed away.
Nearly £20K without allowing for growth (or inflation) - I wouldn’t risk that.

YANBU- DD has a savings account for christening/birthday/Christmas money which she can have access to when she’s older, she can spend that as she likes since it was “present” money although I hope she’s sensible with it.

We plan to help her out with uni/house/wedding (whichever of those she chooses to do!) and that will come out of our general long term savings. I don’t think it’s that helpful to suddenly get thousands of pounds age 18, Id I’d rather help her at the points she really needs it

I didn't have the money to save for mine when they were small so recently I put the max into ds1's (23) lifetime ISA for 3 years so he and his fiancée, who was saving the same, could buy a house. I'm being more leisurely about ds2's as I know he won't buy as young. I have slightly less confidence in ds2 to not piss it up a wall at some point.. if he does there won't be any more to look forward to - equal ops all the way!

Money in children’s savings accounts counts toward benefits beyond a certain amount as well (as they are generally accessible by the parent).

Save it in their name but don't tell them?

Could you put a portion of it into a pension fund for them?

We saved using National Savings Children's Bonus Bonds (don't exist any more) which mature after 5 years and until they're 16 just get reinvested if you don't do anything. Did £25 every 6 months (that was pocket money in them days) till the age of about 7, and PiL bought some every birthday.

Consequently they got sums of money coming through quite regularly from 16 to 21, one or two in the 4 figures.

So far as I can tell neither has splurged it. S2 spent last summer going out for meals with his girlfriend quite a bit, but that was all. S1 did buy a mini-ring last term, mind (more the proceeds from his choral scholarship than our savings, I think). They're both able to budget and to think beyond the moment, and I think that's served them better than assuming they'll be irresponsible.