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 the bank will write to them - but what are the chances of them actually picking up and reading the post? By the time they’re 18 they’ll be ignoring snail mail and only noticing things if they’re emailed to them (or whatever the replacement to email is by then). As an old person who knows what a letter is, you just have pick the post up from the doormat first……

Yeah, at the point that you're not just omitting to tell them about the account but actively keeping it from them by stealing their post you've crossed a bit of a line...

My 18 and 22 year olds inherited money. 22 yrold bought a car . 18 yr old bought TikTok merch - 10k worth!!!

😳 The very fuck?!

I didn't say he had a £20,000 deposit? He had more than that. With regard to the BTL mortgage my DH had to go on the mortgage with my DS but we do not pay anything towards it. The rent for the flat is £650 a month and the mortgage is just over £200 per month so he clears around £400 per month after the letting agent fees.

I think if you are saving for your children and sacrificing stuff in order to put money away for your DC each month it would be so annoying to see them fritter it away. I think it takes a few years of working / living expenses to appreciate the value of money and how long it takes to pay stuff off so not sure even sensible 18 year olds would appreciate it!

I didn't say he had a £20,000 deposit? He had more than that. With regard to the BTL mortgage my DH had to go on the mortgage with my DS but we do not pay anything towards it.

I misread re the deposit but that makes more sense that DH was on the mortgage.

I have a couple of different savings accounts for my children, one being the Nationwide Future Saver. When the child is 18 years 6 months the money is transferred into an instant access savings account in the parent/guardian's name until that parent/guardian transfers the account into the child's sole name. They also have a JISA which they can obviously access earlier. I figured they'd be able to have some at 18 to do as they want (one of them is a saver the other is a spender) but the majority will be kept in my name until a time when they need it (e.g. house deposit or car, etc).

We have CTF for both of our DC and save £150 per month into each account. By the age of 18 there was a substantial amount in their accounts but thankfully my eldest used his to put down a deposit for a house which he now rents out his friends in the second year of uni which more than covers the mortgage. He is doing a 4 year degree but may well keep the house if it continue to bring in a good return. We've always taught them about money and the cost of things and I believe that's paid off. It is a risk though.

If you do decide to open a JISA your child WILL absolutely be aware of it as the bank will write/email/telephone etc when she’s 16/17 (no access until 18 though) Any intercepting or withholding you try to do is illegal.
Most current 18yr olds know about the child trust funds as their mates have them in varying amounts due to the government scheme when they were born. This will be different by the time yours is 18 though OP.
My eldest has very sensibly re-invested her JISA into a LISA snd an adult ISA with my advice. But it is THEIR money and you do hear some horror stories where it’s spent on drugs etc. Despite my DD using hers wisely (so far) if I had thought it through I wouldn’t have paid into the CTF/JISA but saved where I had control. Just to be on the safe side.

OP it sounds as if your saving this money to help your child get a start in the setup of his life such as a good deposit on his own home. It doesn't sound as if your saving this for him to use as a good piss up at 18. I think you need to point this out to your husband as our brains don't fully mature until we are around 25. Thus if you mean to help him in the long term aspects of life you need to wait until his brain has fully matured. I am doing the same for my daughter and will transfer it over when she is 25 I also have shares of hers in my name as well which will be transferred over at that age. She knows this and she knows why.

@JustLyra

Do you have a link to back up your claim?

Money cannot be withdrawn from a junior isa until the child reaches 18 so I cannot see that any money there can be assessed as being accessible.

I would argue that if a child has a tax liability, then it should also have a saving ability seperate to its parents, otherwise, whats the point of childrens bank accounts, premium bonds etc.

Outs had a savings account like that we put money in and mil put money in. We always call it grandmas money. (MIL put in the most) the kids know ita for education and have all kept it strictly that way. Even dd3 who was not sure she wanted to go to uni have left the money (she is almost 19 now so could have spent it) and said she would want and see. She is now applying for universities so will be going and spending it there e like jer siblings.

I think us being firm it was for education made it so the kids simply accepted that

Money in a Junior ISA will not affect the benefits a parent can claim, because the parents can't access it.

The one time I claimed, I had a large chunk of money in my own name that wasn't counted as savings at all, because it was held in shares that couldn't be sold immediately.

They can start managing their account at 16, they can't withdraw money until they are 18.

My children are 10-12. I've saved some money in their JISA (about £10/month plus some birthday / Christmas money). This will give them in the region of £6-8K at 18 which is more than enough to buy a car, have a gap year etc.
I've got separate accounts in my name which I'll give to them when I think the time is right (probably house deposit).

Sounds like she/he wasn’t properly educated and had the right people around them.

I remember the joy of my student loan going into my account, I always felt so rich, and yet every term I would run out of money with a week or so of term left, I remember walking instead of getting the bus, and eaten random combinations of food that I already had in the cupboards. I was 18, supposedly bright and definitely fairly boring and sensible, but it never occurred to me to budget, and make sure my money could last all term.

If I’d been given a big lump sum of money at that age, I’d have undoubtedly wasted it. It took working for a few years, renting my own place, wanting to travel, wanting a house etc to make me realise the value of money. DH was much more sensible with money at that age, but you just never know So we’re saving for our DC in our names for that reason.

You can educate all you want but a minority of teens go off the rails and you don't know which ones that will be, especially when they are only 4 or 10.

I’d add to this that it isn’t even about going off the rails, which is easy (but foolish!) to assume won’t happen.

It can be buying a £5K car when all your friends have a £2K car that would have done. A holiday and being too generous with buying drinks and banana boat rides for your mates and coming back £1K lighter… a new phone you didn’t need.

There are so many ways an educated, well supported “good kid” can waste a financial opportunity.

We're saving for our DC but it's in my name. They will get it when we, as parents, decide, not before. It's to be used as a house deposit.

We have a Junior Stocks & Shares ISA for DS(7) and save monthly into that.

In our names we also have S&S Cash ISA’s for his future house deposit and University fund (if he doesn’t go to the latter then we will use it for something else). We also have a SIPP for him.

Our DNiece is the same age and has nearly £100k in her Junior S&S ISA already which we think is absolutely crazy as the amount when she’s 18 will be massive (it is already obviously). It’s too much money for an 18yo to get their hands on - they could ignore all your financial advice, be feckless, have manipulative friends etc. Far better to distribute investments across yours and their name and when it’s on your name don’t tell them the money exists. DH is adamant that is DS turns out to be irresponsible then he won’t see a penny of the money we are saving in his name until he proves otherwise.

Split the money, one account in their name that can be used at 18 for whatever they like (hopefully something sensible like their first car) and an account in your name that can be used for the benefit of the child at your discretion, maybe education, or maybe gifted to them for a house deposit or wedding fund.

Work out how to split it based upon what you consider would be a safe and sensible amount for them to have at 18.

@Maggiethecat your DC would love me then, as my DS isn't even 3 yet 😂
I think there can be tax implications if they hit the lifetime limit (over £1 million just now) and they won't be able to save tax efficiently into a pension after that ceiling is hit.
I won't cry if my sons diamond shoes are too tight though, and anyway I don't actually think saving so much into a pension is a great idea as Chancellor after Chancellor seems to think they are fair game to mess around with.
I think for retirement savings splitting between pension (tax free on way in) and S&S ISAs (tax free on the way out and available when needed not just when the government says you can have it) is the way to go.

Any money DS got when too young to decide how to spend it I popped into a savings account in his name, we have a savings account in our name though earmarked for when he is older.