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!

I'm definitely in the save it in your name camp.

Your sweet biddable 4 year old, or even 14 year old can change in late teens due to temperament, or unsuitable friends, or drink/drugs. The tax benefits on it being in their name are far outweighed by the chance of it getting wasted.

Honestly, this thread is perplexing. How many people save with bankruptcy in mind!!! If you’re in a state to become bankrupt then you need the kids’ savings in your bank account to you know, feed and clothe them!! I have plenty of rainy day savings and will give money to then when they need at an appropriate time, 18 is madness.

Mine have accounts in their own name for money they’ve been given by relatives etc. Its enough to have a bit of fun at 18 but not enough to be upset if it’s “wasted”.

We don’t save any money specifically earmarked for them, in their names or ours. We have decent savings from which I will consider making gifts to them when they’re old enough and have something sensible to spend it on. But I’m not deciding now when that will be or how much.

You can hand it over when they are 18 if you want, or hand it over in yearly chunks, or wait until they are more stable at 21 or 25.

If it's in their name they legally have to have it at 18.
You could run into all sorts of trouble by just not telling them.

This. If you ever find yourself needing to claim universal credit or anything like that, you won't be able to until the children's savings are used up.

I put my children's savings in junior ISAs for this exact reason.

Keep it in the DC's name, but don't tell them about it until they are ready to use it sensibly
Much easier to do with an on-line account.

Any savings in the child’s names, beyond the basic limit, still count for means tested benefit claims. Being in the kids name doesn’t protect them.

I'm not planning on telling my DD about her savings until she is at least 21, possibly 25.

YANBU We saved everything in our names.

Savings were for the family in the end. You never know how things work out and I would like to be able to access money for emergencies/children's needs/whatever.

Also, we didn't want our children to have access to a significant amount of money at age 18. Financial education is great but you have no idea what issues or attitudes your child will have by 18. That said, a grandmother and stepgrandfather gave each of them a significant amount of money for a car when they turned 18. None of the 3 bought a car (didn't need it/no parking at university etc) but put it into a stock account. I don't think they think of it as spending money just a windfall for saving and investing. The step-granddad would have totally bought a flash car when he was 18 though and was probably a bit disappointed with his conservative grandson :).

My sister saved her children's allowance for her children in their own accounts. Nephew spent it all once he got his hands on it - on nothing at all.

YANBU. I have put a lot into my DCs' ISAs and am shit scared they are going to blow it at 18. I am trying to educate my eldest about spending and saving already and he is a pre-schooler. I am hoping good financial sense will be drummed into them by the time they're 18. I am also not saving separately for Uni fees, so the plan is for them to use that money to fund themselves through Uni. I guess that is one way of making sure they spend it wisely.

I would also add that it only makes sense to add to a junior ISA if you're not using up all of your own ISA allowances. If you put the money in a JISA then you can't take it out if you need it and there's the risk they spend it unwisely at 18. The only reason to add to a JISA is to save tax efficiently and you can do that through your own ISA, unless you routinely use up your annual allowances of £20k each.

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.

How did he get a BTL mortgage with 20k deposit & as a student?

Then don’t tell your kids about the ISA!! We have ISAs for our kids and haven’t told them. Apparently Halifax will write to them
when they’re 18 and inform them about the money. The chances of them actually collecting the mail from the doormat, looking at the addressee and then actually opening something with their name on is so slim!!!

DS has a Stocks and Shares JISA with a few K in, won't be adding much more to it in case he's an idiot at 18 but it will still be a decent amount for him to either be sensible with or not when the time comes.
Seriously considering starting a small pension for him, which he obviously won't be able to touch for a long time. Just as an ongoing lesson in compound interest and the benefits of saving small amounts over a long time. I figure even if he's an idiot at 18, when he's sensible again by 25, say, (hopefully!) he can start making his own small contributions.
Other than that, saving in my name and will help him if and when he deserves or needs it.
Hoping the government don't find a way to tax it off me, avoid an expensive divorce, bankruptcy, all manner of life disasters that may drain my savings I suppose. But at least something will be in his name so all bases covered.

I really don't think it is right people not telling their kids about money that they hold as adults.
If nothing else, it could mean the 18yo claims benefits or grants they aren't actually entitled to.
Legally you could get into a lot of trouble, plus cause a family fall out when they find out you've been withholding their own money from them.

Much better to just not put it in their name in the first place.

We save half into an account in DCs name and half into an account under our name. If they decide to put 'their' money towards something sensible then we will match it... Effectively halving the cost to them. If they decide to fritter their money away or spend it on things we don't approve of then we'll either keep the second half until they're older and need it for something specific, or if they never get to that point then I guess we'll eventually spend it ourselves.

Just because they CAN access it at 18, doesn't mean you have to give it to them then, does it? Couldn't you just not tell them it exists until they're like 21?

Our daughter (8) has about £50k in savings we have put aside for her and our son (1) has £12k so far.

My parents did the same for me (house and savings) with the expectation that if I pissed it up against a wall there would be nothing else. To guard against that this financial education was instilled in me as soon as i became aware and it was made clear that none of the ‘but it’s mine, I am 18, give me access’ rubbish was expected.

I have done the same with our daughter (son too young) as well as a healthy dose of ‘don’t brag or people will take advantage’.

It may go wrong but then it could if they inherited everything at once. What do they say about people who win big sums of money? This way I have time to teach.

My two are still very young but have £10k each in their own names because they inherited it - they inherited it directly so no choice but to put it in their own names. Everything else we're saving for them is in our names for exactly this reason. We won't be able to stop them wasting the £10k, but at least we'll hopefully have some savings that we can offer only at the point it's likely to be usefully and sensibly used, e.g. for university or to help towards a house deposit.

We save in our childrens names, they've always known about it and they also know it's for education or house deposit only. I actually think ours are locked til 21 from them if I recall

Thank you all, really helpful ☺️.

A few people have said don't tell them, but the bank automatically write to them when they are 18.

Ds had his savings at 18, there were not nearly as large as some are on this thread. I know he put some in an ISA and bought a car but no idea what he has done with the rest. It was his money and once handed over I had no say.

Hi op this has been discussed a few times on here with lots of food for thought!

My DC have small inheritance which has been split up into a cash ISA ,which is for a car/driving lessons and perhaps travel. This junior ISA has rubbish interest. The highest it's been was 3 %.
Then they have a stock's and shares ISA which has more in. perhaps uni fee's or house deposit.

This has a much higher interest, obviously as it's stocks it's been bobbing around but until now it's been around 25%.

To try and start to train them to manage these larger sums they have a few 100 each in normal accessible Bank account.
One DC is Very long term gain, the other is want it now.
The older one is already very sensible and has a debit card and saving with nation wide.
She sets limits for her self and can wait.

The younger one doesn't have this so I'm getting her a hyper jar account soon, and will drip feed smaller amounts in.
She's young so we have time to train her.
I'm teaching the older one about investing. I show her how much her account plummeted due to COVID and other issue's then how it bounces back.
I talk to her about individual stocks and. Fund's
.

I worry immensely about them being taken advantage of , wasting it...but I hope they get all this out of their system by the time they access the larger amounts which; will be sold as ...money for. X y and z.
However I Also make sure they set aside money for fun and say there is no point without fun.
Hopefully this means they will not deny themselves! But not over splruge.
At the end of the day if they do waste it...it's a life lesson.
Many people get by without being given money so...

The bank does write to them yes which is why education needs to start earlier.