Husband fears putting money in a junior ISA…

[Twoanddonethanku]

…as he is worried that by 18 our children may be drug addicts or delinquent and therefore it would be incredibly risky for them to have access to a few thousand pounds.

Backstory: I have 2 children aged 6 and 3. My parents said they wanted to put some money aside for them each month until
they are 18. They are saving £25 per month per child so by the time they are 18 the kids will have at least £5,400, not accounting for interest. I opened a junior ISA for each child which my parents pay the money into. This was sorted out a good few years ago, with my husband fully in the loop.

I also save for my kids, from my own personal money (DH and I both pay into a joint account, then the rest of our salaries is ours to do what we want with). Depending on how each month is going I tend to set aside £50 for each child per month in regular savers in their names. DH does not contribute to any savings for the children. He prefers to spend his money now while he has it and is of the opinion that as we don’t know what the future holds then we shouldn’t trouble ourselves too much about saving for the kids. I find this stance fairly contradictory as he takes advice from a financial advisor on pensions and we overpay our mortgage to get it paid off quicker.

DH wants my parents to pay the kids’ money into my Lifetime ISA as I will have more control over the money and can give or withhold it from the kids when they are of age with more control, whereas a junior ISA automatically converts to an adult ISA in their name and parents lose control of the account. I don’t want to do this as it means the kids can’t access their money until I am 60 (I’m 37 now so that’s 23 years away - they might need their money sooner).

DH has spoken to a financial advisor and also his therapist about this. Apparently they both agree that it is risky putting money aside for kids in a junior ISA due to not knowing what your kids might be like at age 18.

Personally, I had always thought the money could be useful for driving lessons, helping the kids get through uni, or even getting them a head start with saving or investing for their own futures.I had not considered that our kids might have gone so far off the rails. Perhaps this is really naive of me.

We are doing ok for ourselves but deffo not rolling in money and do not have a huge disposable income. It means a lot to me to be setting money aside for the kids for their futures.

So: am I being unreasonable? Really interested in hearing your opinions.

YABU - DH raises a valid point and you should find an alternative account to save the money in
YANBU - DH is being too risk adverse, hold your ground and keep the money going into their JISAs

We save into a junior ISA for DD. DH raised similar concerns, but I suppose the balance of risk is that they are very likely to need a chunk of money as young adults, and very unlikely to be drug addicts!

If you wanted to save into an ISA you control, why not open a normal cash or stocks and shares ISA rather than using a lifetime ISA? Then you could access it when needed.

I have this concern about my daughter's, even though she's the sweetest little thing ever atm!

As our bank manager said, they'll only know it's there if you tell them about it........

We had this same conversation 🤣 we have JISAs for them all for the interest rates, but we do keep some money back in our own cash ISAs so that we have some control. We might want to gift them money at a later point e.g. if they get married, have a child, buy a house etc.

I think you and DH need to discuss the money situation though - it's not fair for you to be the only one saving for the kids, unless he pays more for other bills etc. And I don't know why his therapist is chiming in on financial decisions tbh!

Martin Lewis advises the opposite - says you should tell the kids and help then plan how they are going to use it. I agree with the bank manager though!

I have stocks and shares ISAs for my DC. Aiming for approx £40k for each by the time they are 18. They will either blow it - and learn a valuable lesson about money, or put it to good use and learn a valuable lesson about money. I’m excited to see which it is!

TBH it comes down to tax efficiency over the next 18 years.

If you are not using your own ISA allowance… well then yes, save there and give it to them when you think the time is right.

If you are both maxing out your own ISA contributions already, it’s tax efficient to use their allowance in their own ISA.

I’m not really concerned about them spending it as young adults - I will be very, very explicit with them that when it’s gone, then it’s gone ie no further help for a house deposit or similar.

If they turn out to be idiots and blow it… well, so be it I suppose.

I’m team husband. You don’t know what the future holds and will have ZERO control.
Based on your OP you also don’t have the luxury of letting them blow 50k then once they learned their lesson finding another 50k down the sofa for a flat deposit / uni fees

We are putting very little into the kids JISAs.
Ours are coming up 1 and 3 and have 5k or so in there (mostly from birth gifts) and it won’t grow at any great rate going forward as its just birthday and Christmas money.

i think they are a timebomb and i want control of my family wealth…

Unless both your personal ISA allowances are maxed in a tax year I wouldn’t be putting regular savings in a JISA. Even then we are looking at offshore trusts.

Maybe rather than worrying about money, your husband should worry about whether he is providing good quality parenting to ensure that your children are financially savvy, ambitious and sensible, and therefore less likely to become drug addicts.

Why does he want to control what you do with your money? I'm wondering if he's thinking about whether he'd be able to claim 50% of the money if it's in your name and not the children's in case of divorce - or whether he thinks that he'll be able to demand it's spent on him when you reach 60 and not the kids (how's his pension doing? Is he even contributing to one?).

His 'I asked these other people and they definitely agree with me' is always a questionable thing - why would he see a financial advisor when he doesn't save anything himself? Further divorce planning, perhaps? Or he's realised he's going to have no income at 65?

I have these concerns too especially as DH was very financially irresponsible when he was younger and blew quite a lot of an inheritance when he was 18/19 on nothing. But using a JISA is sensible and I plan to deal with it by simply not telling DS about it, until we know what personality type he is! He has his own bank account which he gets regular pocket money into and has a debit card for. He doesn’t know about the JISA which currently has about 5k in it and hopefully will have about 20k by the time he’s 18.

I agree with your DH.
My kids benefited from the government child trust fund. I remember when DS1’s friends started turning 18, all of them getting at least £2k (some a lot more if parents had paid into it too) and many of them basically pissing it all away on alcohol and clubbing. None of them had any money left after a year.

I’m a single parent, and I have a section in my will that states that if I die my kids don’t inherit until they’re 25. Up till that point they would get an allowance as decided by the executor, or a lump sum for a house deposit etc, but they wouldn’t get free rein of all the inheritance.

OP if your kids want to start learning to drive at age 17, as most do, you’ll have to pay for driving lessons anyway, as they won’t be able to access their savings for a year. They may choose to buy a car when they’re 18, or they may choose to spend it on beer, clubs, Ubers and vapes!

I wouldn’t tie it up in your LISA, but nor would I put significant money in a children’s ISA for my children - not because I think they’ll be drug addicts or whatever, but because I don’t think a big lump sum at 18 is necessarily wise or going to be spent well. DH and I have substantial savings, but it’s all in our names in various ISAs, bonds and investments and will be given to our children as adults as and when we deem appropriate. If it turns out that they have a sensible use for money at 18 we will give them what they need then for uni or whatever, but at least we have the option of keeping it longer and deciding based on the situation at the time.

Money from my parents (kid’s grandparents) is different, that was given to them as children at various points and that is theirs, is saved in their names and will be accessible to them at 18. It’s enough for driving lessons or the like, so it’s significant but not enough that I’m going to be devastated if they don’t spent it as I would prefer. That’s between them and their grandparents as far as I’m concerned.

That said, I don’t think it’s right your DH trying to dictate how you and your parents use your money - if you have separate finances the way you do then it’s your choice, not for him to be discussing with his therapist!

I’m a bit appalled by people who don’t intend to let their 18 year old know of money that is legally and rightfully theirs though - the bank will write to them so unless you’re doing something dodgy like hiding their post then they will find out!

We do similar for our kids but they don’t know that it’s there tbh! We are quite clear that they will only get access to it to help pay for university or towards a house deposit. Granted that if we give them access for uni they might blow it all in a month but thus far they’re both pretty good with understanding the value of money.

@Squidgemoon you may find that the bank contact your DS directly when he’s 18, to tell him he can now have his money. Also his friends may have savings plans at 18, so he’ll probably ask you direct if he has one when the time comes.

Your parents and you are putting the money away where you beleive is most appropriate. If the money is in your name and you split, he's entitled to half of the money.
Tell him it's really not his concern as none of it is his money.

if it’s in their names they can do what they like with it at age 18. Never mind university or a house, if they want to they can put the whole lot on Bet365!

It sounds like you’re saving relatively small sums of money so you don’t necessarily need an ISA, just open a savings account to put some money into for them, in your name. You never know when you might have an emergency and need to use the savings, even if only temporarily, which is one reason I wouldn’t use a junior ISA, the other reason is as your husband says they might blow it at 18, I know I did and I was a fairly sensible kid, but I would withdraw £10 here and £20 there to buy clothes or a night out, and poof it was gone fairly quickly!

We've just had an eldest child turn 18 who has a decent amount saved up in a child trust fund (the precursor to JISA). We talked to her about it and she knew it was there but not the exact amount. She also doesn't know how to access it yet. She knows it was saved to help with uni fees but that she can take loans and save that money for something else eg towards a flat deposit (but then would have to pay all the student loans back without support).

It's fine as she's sensible but if she wasn't I think I probably wouldn't have told her about it at all

There's also the issue of them meeting a partner and then getting access to some of the money when most people have saved it for their child's future (uni fees/property/training courses etc) rather than blowing it on a gap year with a boyfriend they split up with 6 months later...

I was very sensible as a kid, and grew up poor so I knew the value of money. At age 18 I received a large amount of compensation for a crime I’d been a victim of a couple of years previously. Probably equivalent to about £12k now. I spent almost all of it in a year, on fun stuff. Couple of nice holidays, nice make up, top-of-the-range hair products, shopping trips to London. I had about £1k left when I went to university, so that just boosted my grant and got spent on alcohol and kebabs!

That's interesting. Did you regret it or happy you spent it that way?

DH can have an opinion on their savings when he is doing any of the saving.

Until then your parents decide for their money and you decide for yours.

Everyone else’s opinion is mute.

DS turns 18 this month and will get close to £6k, mostly from his child trust fund. I feel this is a good amount for him to get and I’m glad I didn’t save so much he’d have lots more than that.

He’s had an allowance since being in sixth form with the hope it would teach him to be fairly responsible with money. (I never had my own money and blew through my student finance pretty quickly). This new money will give him an extra £1,500 a year through his planned four years of study. So a bit extra but not loads. Enough that if he can’t live on his student loan he can fall back on this before asking us for any more.

Risk is that he’ll blow it all - but I don’t think he will. He’s fairly sensible and saves a chunk of his allowance already. He realises he’s getting what feels to him like a lot of money - but in reality it was mostly saved through adding £15 a month to his initial £250 over 18 years (in a tracker) - so doesn’t represent a massive sacrifice on our part.

Bit of both really. I’m 57 now and I’ve had a decent job for 30+ years, so money hasn’t been a huge worry for me. I don’t regret going on holiday to Kenya, but I wish I’d put some in a savings account and used it on a house deposit, I’d have bought a house much sooner and been mortgage-free by now!

I'm with your husband

His bloody therapist?????