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

Yabu. I've tried to organise the DC's savings so they have access to the minimum at 18. But as I'm on universal credit I've had to move a bit more into their names than I'd like. Luckily my eldest hasn't grown up with any issues so he's unlikely to blow it all. My younger DC might so I've kept as much under my name as possible.

@MumblesParty yes I know the bank will contact him directly, but if I don’t want him to find out about it because he’s not responsible then I will simply not give him the letter until he’s older! I don’t know why @Katy232425 thinks that is so appalling - what would be more appalling is an 18 year old pissing it up the wall when it should be used to set him up in life. Of course many 18 year olds are perfectly sensible - I was, and didn’t touch the money I got at that age (which was only about £3k) until I bought my first house, when it was used to pay the legal fees and removal company. Time will tell whether DS will take after me or his father - if the latter then I have no qualms whatsoever about filing away a letter he won’t know to expect anyway.

My daughter had £15000 on the 18th birthday for uni etc, she has always known she's had it and it put her through uni, car insurance etc, travelling, and now a deposit for a house, she has been very sensible with it.
Son will have £18000 on this 18th

Just don’t tell them it exists that what I did unless they write to every financial institution when they turn 18 to find out if one exists which is unlikely there is no issue.

I’ve posted about this before. I did a brief stint in family law when training and one of the saddest cases I was involved in was a family who had set up savings for their DC in infancy and were trying to prevent him accessing it as he was a drug addict.

Their efforts failed, he did access it and was dead within the year.

As a result I’ve never saved in my DCs names.

This seems pretty extreme, but I've certainly long been annoyed by a relatively common attitude that an 18 year old will automatically be wasteful and stupid with money. My siblings and I each inherited 5-figure sum when we turned 18 and none of us did anything stupid. We kept it most of it back for house deposits and I just used some of it to not have to live like crap just because I was a student.

My kids' ISAs will mature with about 10k each - I want to talk to my kids about this, in fact I should start doing it now as they are both teens, so they are prepared. My parents were very transparent about what we'd get, impressed on us it mean we could buy homes when we finished education and I think that helped us be sensible with it.

A bit harder to say what to do with £10k as it won't make a housing deposit, but I'd probably encourage them to reinvest in an ISA, and using it for things like holidays with friends. Oldest, I have to say, is giving all indications of not being great with money (probably have ADHD like their brother) though generally very sensible and mature otherwise.

I have a JISA in DDs name that I pay £25 a month into, I then have a S&S ISA in my name that I pay more into. The intention is that this ISA is for my DD, either for uni or a house deposit or whatever, however I don't know what will happen 10 years from now. I hope she will be sensible enough not to piss it all away, I hope that my financial situation will be stable as it is now.... but I don't know, so I wanted to be able to release it to her at that point or hold onto it as appropriate.

Any money that you save for your children that is in your or DHs name would be classed as joint savings if you were to divorce. Your DH is being an arse here. He also has very low opinions on his own children.

My DM saved £3.5k each for me and DB to get when we were 18. I spent mine on uni, DB blew his on partying within a few months.

You can't know the future so it hasn't stopped me saving for my DCs but I'm trying to teach them financial responsibility. Ultimately it's up to them how they spend it and it did teach my brother to be more responsible in the future!

I broadly agree with him about the JISA (although not about the LISA) and I haven't got JISAs for my kids because I want control of the money until the kids get it. You never know what other opportunity may arise.

HOWEVER he isn't actually contributing so IMO he gets fuck all say in the matter. When he puts his hand in his own pocket then he can decide where the money goes, can't he?

He sounds a right plum.

You’re correct. But I think we trust our kids at the moment to broadly do the right thing and also ourselves as parents for guiding them appropriately. Both dh and I aged 18 were very sensible so it’s not a given that they will just blow it.

It’s very easy to find out if there is an ISA in your name. There are several ways even if you don’t know the name of the provider. One is via HMRC.

Also will add, my two adult DC were given a (low) 5 figure sum on their 18th, one blew it within a year and the other invested it and doubled it.

if 5 years ago I’d bet on which one would do which I’d have lost.

Talk to them about their ISAs from a young age and educate them about their finances. Make them aware that the money is for university, a house deposit or can be invested. Get them to agree a sensible plan for the money and take an interest in using it wisely.

The OP said this is likely to be less than £10k. It’s not a life changing amount of money, and assuming interest means it broadly tracks with inflation it’ll still not be life changing in 10 years when the kids get it.

If they blow it, then hopefully they’ll learn a lesson from that, but they we hardly ruined all of their life chances. And maybe those who are worried should be trying harder to bring their children up sensibly.

If we were talking hundreds of thousands I’d have a different view - but sub £20k we should stop infantilising adults, teach them the correct priorities in life, be clear that there’s no more money coming after that and let them make their own mistakes.

If you keep it in your name, it’s susceptible to divorce, bankruptcy, care needs, generally being absorbed by cost of living if it becomes needed for the family instead of being set aside for your children’s futures.

To those saying they are paying into Junior ISAs but haven't told their child - as soon as they near / reach their 18th birthday the bank will write to the child and tell them the account is now in their name so you won't be able to keep it secret once they hit 18.

surely if you are saving a better way would be to tell them and have conversations about how you expect / hope they will use the money - but of course you can't insiste

I was brought up sensibly but was depressed at 18. 2k blown in the 90's. I didn't really learn a lesson, I just felt awful about what I'd wasted and wish I'd not had access to it.

We don't have a junior ISA for this very reason. It's not just the risk of being drug addicts. There's lots of things that can go wrong around 18 they may later regret spending the money on.

Bad relationships romantically or even friendship group wise.
Struggling with school and direction. Decide to quit and live off the money (until it runs out)
Drinking/drugs/smoking/shopping/anything else you may not want money spent on.

You don't know how your child will be at that age. We all hope and work towards the positive but this is not always the case. I got given a few thousand my parents had saved for me at 16. I actually never really spent it. I hope DD is the same but no one knows.

We have a savings account set aside for DD but it is in my name. We have it like this for the reasons above. But also so we can dip into it in future should we need to for specific things for her if needed.

I'd consider carefully your options. Also junior ISAs last I looked didnt actually have the best interest rates.

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.

Sorry, his THERAPIST said it is risky? That’s either the world’s worst therapist or DH is lying to you.

I wouldn’t be too concerned about kids getting a few thousand at 18. If it was going to be significantly more I’d want to either keep savings in my name or set up some kind of trust.

I totally agree with your DH, GP put money into account for children which then by 18 was about 10,000 which they insisted as they were the joint holder or something on closing and handing check to grandchildren. Of there 5 grandchildren most acted in my view responsibly and it went into an ISA and has been used for car or house deposit but one was totally irresponsible and tbh I am quite disappointed the GP didn't trust parents with by consulting them.

Could you compromise and split between the 2 or is that not possible?

FWIW I’ve used a junior ISA for mine but will talk to them about budgeting and particularly about the importance of financial independence. I take the opinion that if they want to blow it on other stuff they take the consequences.

I spent previous inheritance on going to Galapagos and Antarctica which some people would frown upon but I have no regrets whatsoever! Too weighed down with responsibilities to do that now

I agree with Martin Lewis, you have a decent amount of parenting time and influence to guide them properly, talking about it openly and improving their financial literacy will remove the excitement about the amount and open their eyes to what it can do for them.

If I was 18 or above and found out my parents had decided to keep the fact I had savings contributed to by my grandparents a secret by hiding mail or other means of deception I would find it very difficult to forgive and it would likely ruin the relationship.

The children could piss it up the wall but that's their decision, it's their money at the end of the day and you have to trust them to do what they want with THEIR money.

If you don't feel comfortable trusting your children then use other means but do not keep accounts in their own names secret, it's not ok.

Your husband can have an opinion worth listening to when he puts his own monies towards the children's savings and I highly doubt a therapist would agree with him, he is being manipulative imo.

Good luck with that parental guiding! If only raising teens was that easy….

Are they your dh's kids as well or just yours? Do they have a different dad ?

My kids have had about 10k each and haven’t wasted it all on alcohol and kebabs. If they did, then they wouldn’t have received anymore so would have been a life lesson