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

I think it’s only worth even thinking of if you are already contributing at the max with your own ISAs. That’s £40k a year between you! Or £20k a year if only in your name due to DH not contributing. I don’t know much about lifetime ISAs but that looks like another £4k a year but as you say can’t access till later.

We did save in DC names but stopped a few years ago after thinking about it like this after a post I read on Mumsnet. We weren’t anywhere near our own ISA allowances.

It just gives us a bit of peace of mind. It’s still £10k per DC at 18. We have a few DCs and so far sensible except for 1 and we are dreading when they turn 18.

I agree with your DH. I hope my kids turn out great and sensibly spend money on driving lessons, uni, house deposits. But loads of 18 year olds are total idiots and would drink the money or spend it on rubbish.

so my kids have savings accounts they know about and other savings accounts which I simply haven't told them exist.

And when they are old enough/sensible enough then I will let them know they are there.

For context my parents did the same. They had 4 kids. Three of us were sensible with our known savings and one frittered his. But all 4 of us were able to use the secret savings we knew nothing about on house deposits.

My biggest concern isn't that he doesn't want money put into a JISA for whatever reason, it's that he's not interested in putting ANY money aside for them himself. Plus he wants anything your parents put in, to be in your name.

And reading between the lines, he's been prepared to be economical with the truth to persuade you to his thinking - unlikely as I said before for a licensed IFA to advise not investing at all for the children, and would be exceptionally unprofessional for his therapist to offer any opinion on financial affairs!

I feel you need to have a long hard think about his views on spaffing all his money away because it's there - does he have any savings or investments of his own other than the pensions?

It's usually kids who haven't had any money training or access to money who suddenly go wild and spend it.

It won't be hard to blow 5 grand. Why not try stock and shares isa you would get far more with that in a low cost index tracker. N

Then train the dc in money and capital and investment.

Keep some in a normal bank at paltry interest so they can see the difference.

Then they can blow the bank stuff if they want but keep their capital in stocks and shares.

Yes but most 18 years would not seek at this information as it wouldn’t occur to them.

I raised this concern when I opened bank accounts for my DC, largely because DD has a learning disability and I don’t want a situation where neither she nor I can access the money properly. The guy at the bank basically said move it out before she turns 18 as it’s mine till then! My boys know it’s there, they are 7 and 8 but I’ve told them it’s for driving lessons or university. They might not want driving lessons or uni but at least they know it’s for a specific purpose rather than pissing up a wall.

They would if all their friends started talking about theirs!

@Twoanddonethanku YANBU, teach your DC about financial
planning - budgeting, savings, investments, interest rates, debt etc. This is the best way to ensure they grow up to be responsible with money.

It’s at 16 the institution will write to them, because from 16 the child can take a role in choosing the investments (in a stocks and shares ISA).

I work in a building society and have seen many JISAs mature. Once the money is in their account you have zero control over it. When the child reaches 18 they can do what they want with the money - I've seen many teens spend it sensibly, others continue to save and others blow the lot.

Please don't think your child will not find out about the account - they will. It's a hot topic amongst 17 year olds, it's on their NI letter and the building society will write to the child. I've even had an 18 year old come into my work (with Id) asking if they had any accounts with the society!

It doesn’t have to be anything as radical as drugs, it could be buying something expensive a couple of times. Treating lovers or friends. We didn’t open a junior ISA but I saved money for DS towards a house deposit. That is the only thing that chunk will be released for.

Here is a great example, colleague had two sons, one is an accountant and Mr Boring and sensible from central casting but makes for a great DS as in zero worry. The other raised the same is terrible and has been in prison. Parented the same, the younger one just had a very impulsive personality plus always wanted to impress people. Went to a nice village primary, no inner city shithole and no known reason just his personality.

You can influence your children but deep down they are who they are. The majority of my friends children are 18 to 25. I have known loads since birth or from first year of primary school. So far none have gone off the rails, one is about to becime a Dad at 22 which is a shock but that’s it.

You are right DD just got her national insurance letter (which she definitely needs to keep as well it is her number) and it said about it there - although that might change as she is still a child trust fund baby where the government paid money into it so anyone born before 2011 has at least £250.

it might change when the Junior ISAs kick in as there is no money to be found

they talk about it though - I have a friend who still tries to hide stuff from hers (14 and 11) such as the Florida hurricane and it is next to impossible given the amount they all chat with each other

and any professional who recommends hiding it though is recommending breaking the law!

I would save money for their future (university, driving lessons, first house) but I wouldn't put it in their name, how will you feel if you have scrimped and saved for years and hand over a chunk of cash to your kids at 18 and they take it and spend it all travelling for w years, or move out and live on it without getting an education/job? Or get conned into supporting a shitty girlfriend/boyfriend and lose it all? Your kids might be lovely, but completely trusting an 18 year old to make sensible choices for their future seems an incredibly risky strategy to me.

That's for your money- you can't control whatbyour parents do, but if it were me I'd prefer they kept the money aside and used it to pay for something specific in the future. Or made it into something they couldn't access until like 25

Interestingly, they don't. My dd is turning 16 in a few weeks and she has an ISA and they wrote to me saying she could have all the correspondence to her, but can't access the money until 18 and has to write to request that information goes to her.

I'm sure some parents might decide to not tell their children about that.

the kids won’t know about the ISAs unless you or the grandparents tell them. Speak to the grandparents to keep it quiet.
I also disagree with making big amounts of money available to young people so we have our set up differently in a way that makes sense to us.

Just don't talk your kid untill they express an interest in buying a house or something!

So smug

One of my kids went to Cambridge
One went somewhere very different

Same quality parenting but very different young people

Except that I think is far more likely that a couple will divorce and money saved in either parent's name is considered a marital asset. Or that it would need to be used for an emergency. I see having the money in my child's name as insuring their future, and protecting them from far more likely scenarios. The environment my kids have grown up in, whilst no guarantee, it is pretty low risk they will stuff it up their noses.

I've adopted a compromise. There is sufficient in ds' ISA to pay for a first car insurance or a really good post-A'level holiday, but everything else is in my pension fund.

I'll use it to help with his university fees or a house deposit. If I die before then, ds will get it all tax free at 25 when hopefully he will be mature enough to deal with it sensibly.

@Meadowfinch surely that depends on your age when you think he needs the money for Uni or a house deposit - you can't draw any part of your pension until you're 55.

Plus don't forget for those you who are married, and a divorce takes place, your pension is considered part of the marital assets

@Allergictoironing True.

I had my ds in my 40s so not an issue for me. And I'm single. My finances are structured to benefit ds only, in the event of my death.

That's good, looks like you're doing the right thing for him then 👌

OP don't take second hand financial advice from your husband's therapist for god's sake. He sounds flaky af and I doubt that your kids will benefit from his control over the funds that you and your parents (not him - why is that?) are saving up for them.
The posters planning to intercept their adult children's post from banks etc are just crackers.

We put money into a Child Trust Fund that did well so when DS turned 18 there was enough to cover his living costs for all of university. Thankfully he agreed to allow us to take the money and dole it out to him on a weekly basis as it was very scary to think that our hard earned money could have just disappeared overnight if he had wanted to.
Therefore with hindsight I would put it somewhere he couldn't access when 18, even if the interest was less.