Opening a savings account LISA for a child - opinions

[OnTheRoll]

I am not after financial advice, rather a life one.
With the way things are going with house prices, I am fully prepared to the idea that, if we were in a position to help our two DC with their first house deposits, then we should probably do it.

So I was thinking that a good way for saving for it would be opening a LISA account where you get a 25% top up from the government. DC are 18 and 20.

They could access the money when they are ready to buy their first houses and until then it would be earning a nice 25% top up every year.

My dilemma is that this is the money that we could also save for ourselves, for our own retirement. And what if the DC turn out to be high earners and don't really need help with the house deposits? Whereas these savings would be locked under their name so DH and I would not be able to access them anymore. I suppose if that would be the case the DC could give the money back but who knows what our relationship would be like in 10-15 years? They are great now.

Anyone has done it for their own DC? I have my own LISA too.

My dilemma is that this is the money that we could also save for ourselves, for our own retirement. And what if the DC turn out to be high earners and don't really need help with the house deposits?

Surely you should never be saving for them in such a way that means you can't also provide for your own retirement too?

I am maxing out my own LISA and adding to my pension about 10K a year. Although of course I could find use for the extra available funds too.
But if I were to help with our DC with the house purchase then I would be using my savings for that, so a LISA for them would help any of my dedicated money go much further compared to any interest that an ordinary saving account might offer.

If you are a higher earner a LISA is basically a shit pension in a dress as you get 40%+ relief on a pension Vs 25% on LISA.
On that basis I am not a fan.

Personally... we max out our 60k PA pension allowance (I'm actually putting in 80k this year as dropped contributions during mat leave so have extra allowance) then do 20k PA each into ISAs. After that if there is anything left it goes into DDs JISA we only put a small amouunt in there (£1k max pa)

My POV is I want flex with my money. JISA and LISA are locked up.
Pensions are too but I am fine with that and we have good overview as it's in a SIPP and I know we don't need to access it due to healthy ISAs

I am not a 40% tax band earner so LISA is a good option for me.

So you are still saving for your own home? I assume you are in rented property?

You can only tie up money like this if you know you will never need it. If you already owned outright or had a very small mortgage then that’s the position I would want to be in.

I honestly don’t think you are in a position to do this plus you have zero idea what the future holds. I intended retiring at 55 but illness meant I retired early at 50.fortunately I have an ok pension still not as much as wages obviously. So I ended up with a bit of a shortfall of what I could have saved.

Also be slightly beware of letting children know you will be assisting because what you want are your adult children to be strivers. Our DS knows he has money from his Grandfathers estate towards a deposit, we only told him in the last year and my Father died a decade ago. He has saved quite a few thousand, I haven’t told him we will match his savings when he wants to buy but we will. DH is totally against giving him as much as we could.

I suppose a LISA is at least tied to a house purchase only. When I was 17 my Mother gave myself and my sister 1k. This is decades ago so more like 3k today. I saved and invested mine and my sister spent hers on having a great time. You never know how your children will turn out.

ColoursChangingHue no, we own our home with some mortgage left. My LISA is for my retirement (still a long way to go for that).

Sound advice regarding wanting children to be strivers rather than counting on parents' help.

I would overpay my mortgage as long as no penalty was incurred, we did this and it was the best decision we made when we had an investment make good. Really without actual specific figures which I would not advise sharing online it’s hard to tell how well off you really are.