In thinking that putting significant money in a child trust fund or similar is a bad idea?

[DoodlePug]

I have a friend (pretty average income) who puts pretty large sums of money into her kids CTFs. Basically all of their child benefit (one if those people who believes it is the child's money) plus other sums she's saving for their future. And I know several other people who do similar.

The idea is that it'll be a nice pot of money that can be used to help pay for uni or a house deposit.

I have in the past pointed out that it's the kids cash once they reach 18 and they could blow it on crap/motorbikes/drugs /travel and then still need help with university costs or buying a home. Will she say 'no, you've had the money?'

The general response to this was 'Well, if they're going that way I just won't tell them about it' but that was blown out of the water a few years back when the first CTFs matured and there were ads everywhere telling 18 year olds how to find their lost accounts.

Obvs this is none of my business and I would only bring it up during a conversation in this area. But AIBU to say anything at all? Does it cast aspersions on my friends darling children or is it more likely just something they've never considered and a useful challenge?

Nah. He wasn’t born in the UK so doesn’t have a government one - I’ll just do a sad face and tell him he wasn’t the most favourite grandchild. 😂

Actually this is the thing.

An ad for a motorbike/invest-in-crypto with someone saying how much the purchase has changed their life and a 'find your ctf' ad right next to it 😆

Anyway, thank you MN

Most votes say I'm unreasonable to mention it whilst most posts agree with my thinking so I'm assuming it's a 'you're not wrong but mind your own business', which is fair enough. I will take that advice 👍

Only my middle (of 3) has a government one, 6 years between each kid so they hadn’t started with kid 1 and had gone again by kid 3!

the internet algorithms thing is really troubling!

DS’s savings are in my name so I can hand them over when he is ready to settle down and buy a house, probably sometime in this twenties.

I completely agree. Unless you're minted and you can afford to put serious cash away (in which case it would be worth it), the 4 or 5 grand per child that most people will manage to put away is barely going to put a dent in the uni debt, or go very far towards a house deposit. It won't be life-changing by any means. So I think you're best off enjoying that money now, giving them nice experiences, holidays etc.

My DS19 has lifetime savings in my name.

He actually transferred his personal savings there recently.

He has always known the money is 'his' bit will only be given/used to pay for something "proper"
He won't ask for it for pissing up, and the plan was always to pay the bill/deposit whatever directly from that account (rather than him ask for £20k, me move it to his account and then him spend it all on something silly) of that makes sense?

YANBU, that’s why we save in an account in my name for DS’s future. Whatever is in there at 18 will go towards rent/living at university (should be go) then any left over on a Masters/wedding/house deposit.

I wouldn’t allow a child a huge pot at 18 unless they’re extremely sensible.

My brother and I had access to hefty sums at 18 and 21. We are both very good with money and have used it well.
My friends had similar, I don’t know anyone that was reckless with it. If you are brought up properly then I think it’s quite rare to go completely off the rails. Yes it can happen, but I don’t know anyone that did.

Far more likely that general savings for children get eaten up in divorce-I know several that had that happen!

"Nah. He wasn’t born in the UK so doesn’t have a government one"

Oh right, you said he did 🤣

I didn't put anything into ds's for exactly this reason. We did save in an ISA.

He was 18 earlier in the year and got about £500. We have been able to be much more flexible and fund other stuff for him before his CTC money came through such as musical instruments and the NYMT course.

We have a savings account for DS who is 10, By the time he is 18 it should be at 30K, it is in a savings account under our name so we can decide when and if he gets it.

We just left the original cheque in the CTF, Ds got that last year and it was about £1300 I think. We saved separately under our control and because he is a sensible chap handed that over last year too and it has been invested wisely thankfully. There was no way I was paying into a CTF that means they get everything. You can raise children to be really sensible with money but once they actually have that cash in their bank accounts there may well be the temptation to blow it all. My niece worked from being 15 and now regrets all the money she has blown on what she now considers trivial stuff. It means she has to work whilst at uni whereas if she had saved just half of what she earned she would have funded herself without a job.

We saved into a completely separate account for university for our "expected contribution" and we have started to dip into that as Ds is about to start his second year. Ball park figure is just over £5k per year. However, rent costs vary wildly for accommodation costs depending on where they are in the country. Eye watering at times.

Also on the National Insurance Number letter addressed to said child - it very very clearly mentions CTF and JISA accounts and how to search for them.

But then CTF and JISAs was the talk of my sons crowd so he knew anyway

I've got funds set up for them but haven't added to their ctfs as I don't think it's a good idea to give any 18 years a wedge of money and expect them to be sensible with it. I know I wouldn't have been!

Funds are bare trusts designated for them but in my name. They won't know about them until I want them to give the money.

I've always been a saver. My DM did this for my dch and we added to it. They knew about it and were really grateful but didn't get their paws on it until they were 21 as it was in my name. One put theirs towards a deposit on a flat and the other one spent it on university fees. I suppose it depends on your dch - keep it in your name and if you think they're going to blow it, don't transfer it to them until they need it for something sensible.

its tricky isn’t it? I recently had an inheritance and decided to put a significant sum in an account for my daughter, but I had the exact same conversations with my husband about it. The logical thing for me was to put the money in premium bonds for her, but then in her name she would have access to it at the age of 16, or a child savings account Immediately gave it to her at 18. I decided to put it in an account in my name and then IF, and only if, I think she needs/deserves the money, I’ve got some to give to her. But it’s certainly not something I would ever tell her about.

Your friend will be screwed if she thinks her child won't find out about it. Once they turn 18 all the correspondence gets addressed to them and she will have no access to the account any more.

Oh I see, I misunderstood I think.I guess it depends if it’s being seen as a gift of money or a gift with stipulations I suppose

We put child benefit into CTF simply because it seemed the easiest way to deal with it in the context of household finances, without benefiting one parent more than the other. That would not have added up to an amount worth worrying about, especially as we stopped getting any net child benefit after the first several years, but then my mother started giving away her spare money, and the share that came to me went into the same fund belonging to DD. 12-year-old DD now has nearly 90K, if she wastes that at 18 I'm going to be a bit annoyed with her.

My trust fund was spent by me and my friend on a LOT of crap and alcohol and drugs. My friend then got hers and we spent it on a lot of crap and drugs and alcohol. We didn’t learn. This was the ‘thing’ to do really. Shite for our parents but fuck me what memories I have of doing absolutely ridiculous shit that I’ve never and would never do since!

I would never put significant sums of money into a child's name. Even a lovely 14yo can go off the rails at college, it isn't worth the risk. We never added to DDs CTF for that reason, though have money earmarked for them.

I made a deal with my kids. Once they turned 18 if they let me have access to the account, so I could see what they are doing and don’t touch it, I would keep adding to it.

Every month, I check they aren’t dipping in and add to it. Seems to work for us.

I have only just told DS he has some money kept in my name that my Father left him, my Father left strict instructions as to what was acceptable to use it for and it was education or housing only. When my Dad died 10 years ago it was enough for a deposit on a small house, it isn’t anymore.

I did this for my son, when he turned 18 the bank wrote to him directly as the money needed to be moved out that account as it was a childs savings acc. He never knew the money was there prior to this and I was not planning on telling him as he was going through a lazy phase. Needless to say he withdrew the whole lot and squandered it on takeaway and clubbing. If I could go bk I would just put it in my own savings so I could decide whether to give it or not at 18 or wait.