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

If the money is in their name, there's nothing you could do to stop them.

I think it’s appalling, if not illegal, to hide a competent adult’s post and deliberately prevent them receiving communication from their bank about their own money, yes. Not sure what’s hard to understand about that - not lying or stealing is hardly an unusual moral code to live by.

I think the problem here is that you see the money as being the cause of it all but actually it was likely to happen anyway - if you want money for drugs you will get money one way or another

what it does mean is that you are not saving for a small chance they end up wanting to spend money on drugs that if it does happen will find money anyway instead of saving for them

certaibly one of mine will spend sensibly the other maybe but will let me give it to him

We have already been putting money into S&S ISAs for 3 x young Gdcs - it’ll be 10 years before the eldest will have access. We just have to hope that she’ll be sensible.
We may well be gone by then (I’m 75) so in case I’m not able to say it in person, I’m going to leave letters for them, to say that we don’t mind if they blow a bit of it, but as they will probably have realised already, it’s an awful lot harder to earn or save money, than to spend it. One day they may well want to buy a flat or a house, and nice lump sums for deposits are not so easy to come by.

We will continue to add to their accounts every year - at least it’ll reduce the eventual inheritance tax!

I had a similar conversation with DH and we have money being saved for our kids in a savings account in our name rather than a junior isa. I just want to make sure the money gets used for something sensible when our DD's are older.

I have a friend who came into several thousands aged 18 and she literally spent the lot in about 6 months on nights out, and regretted it many years later when she could have really used the money for furnishing her home, learning to drive etc.

I'm just not convinced a lot of 18 year olds are responsible enough with money to have several thousand transferred to them on their 18th birthday.

Christ Almighty have some faith in your lovely children! Mine have used their ISAs as a massive motivation to continue saving and they have taken over the £50pm contribution I made every month from their part time jobs.

My DC are 11 and 14 and have about £25k each. DC1 knows how much there is as we discuss university and what additional amount will be required to fund it (i.e. above the amount in his JISA).

I think it’s bad planning to put it all in the parents name. If you fall on difficult times, it would be taken into account in any UC claim whereas funds in a JISA will not.

This. Not sure why he's getting to bang on as if he's the expert on savings and investments - classic mansplaining I guess. He comes across as pretty selfish to me: he want to spend all his money now and on himself - sure, who doesn't? But most of us don't use hollow excuses about not knowing the future to rationalise doing nothing for our kids.

Be aware that this attitude is likely to extend to you too. Expect him to make no plans to save for retirement etc, but still feel entitled to make use of yours and your kids' savings because that's only fair / it's something really important that he needs / you're being unkind if you don't let him. This is coming down the line. Make your own plans accordingly.

This exact thing happened to my friend. Hapless arsehole of an ex-husband took half of the money that she and her parents had saved for her 2 DC. She bitterly regretted not setting up accounts in their own names. At the time it had just been easier to set her own account up and save into that.

Wow really taken back by how many controlling people there are...

There is a massive risk if you have it in your own account something could go wrong there too. Post by @Wonderfulstuff nicely illustrates that.

Not sure how old your kids are but there is plenty of time for some sound financial education. We opened a S &S ISA for ds and also encouraged saving into a regular savings account and encouraged him to work and develop a savings habit. He took control if his ISA age 18 and has not touched it to date (he's 23). He will have a good house deposit.
If you're worried maybe leave savings in your name until you have a clearer idea of how responsible they might turn out to be.

Ds24 had 10k at 18. We helped him invest half, the rest went on fun, a car and to top up uni money. He worked all through uni and always saved as much as he could. He is about to have enough for a deposit as his girlfriend has done the same. They only piss it away if they have had no guidance on finances. Ds worked from 15 and always saved and now it is paying off, ds17 gets his next month and he will save half as well.

@mumonthehill i don’t think it’s fair to say teens will only piss their money away if they haven’t had guidance. We all do the best we can with parenting, but you just never know what you’ll get, as evidenced by some posts on here about siblings who’ve had the same upbringing but different approaches to money.

When I worked for a bank when the kids would turn 18 they had to come in with ID to have the blocks removed from the account and it would be solely in their name, no parental rights to it. It felt incredibly risky to me. Parents would be telling their kids white lies about the money and expect bank staff to go along with it, I think save into them as much as you’re willing to give your kids up front for their 18th birthday in cash.

I find this attitude annoying also, surely it's a direct reflection on our parenting skills? I wasn't lucky enough to grow up and be given money but my mum gave me great financial education which has put me in a good position for my life. I save for mine in JISAs and if they become drug addicts I think that's really the least of my concerns.

I wonder if there's really an underlying concern for most that it can't be accessed and used for them. After all the objections we often say are normally not the real reason.

Crack on OP. Financially educate your children and you'll be fine - we start to develop our attitude to money around 6/7

They only piss it away if they have had no guidance on finances.

If only it was that simple. No matter how much you discuss finances and saving there are plenty of reasons why they might spend the money.

Could you save into the isa and then make a judgement when they are 17? You could potentially move the money out of the account at that age and lock it down for a few more years if needed? Is that sort of thing allowed?

Yeah, they don't have to be drug addict delinquents to make poor decisions at that age.

I've kept DDs savings in an account in my name. That way she won't know it exists or have any rights to it in the sense of saying what she wants to spend it on, nor will she even think I've "stolen" her money.

The small reduction in interest is worth it to me. I can choose what I fund and she doesn't get a say in it. Its basically gift money I can dip into for her rather than her savings. I think you need to be clear about what's theirs, so like monetary gifts from your parents to them VS what you want control of.

If you want to divorce its worth knowing who gets rights on the kids accounts and whether they are part of a divorce settlement or not - if they arent considered part of the divorce pot then you may see sense in having money in their names to protect it.

Just don't tell them it exists.

Or you can say you save for them for when they are grown up. No more details.are necessary.

If they were a drug addict or gave it all to some one who was pressuring them when they were 18 you'd be devastated.

Give them a lovely surprise.

As a parent you will know when the time is right.

@Twoanddonethanku Our 2 kids (21 and 18) have isas, junior accounts initially, they both have over £40k now. I am designated account lead (some form filling, they have to give permission) and manage their investments. I can see if they access their accounts and they never have. They are both very steady and responsible. They intend to use the money for deposits on property eventually. I completely agree with you, and think your DH is actually very selfish and hiding behind the excuse they might use it for drugs. In my eyes you are an excellent parent. DH and I are both retired accountants.

The problem with that approach is that when they find out, at say age 22, that they could have had it at 18, and they could have gone on that holiday to Ibiza after all, or bought that bag they wanted etc, they’ll probably be furious with you for concealing it!

Well no and I wouldn’t. Thankfully mine have been really tight with it, funnily enough not so keen to spend their own money

The idea that good parenting prevents all ills is crazy, there are plenty of good parents who have reckless adult children or even kids that grow up to be wasters.

A few of my best friends are excellent people who were raised by grandparents because their own parents were alcoholics/drug users. It wasn't their parenting or the grandkids would have gone the same way.

I just wonder how it would work. Surely at some point the child is going to be closest to the front door when the post arrives. Unless you can use a PO box?