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

Open a junior cash ISA with a small amount in which they get told about.
Open a junior stocks and shares ISA with a separate provider which the majority of money goes into and they don’t know about. Once you’ve worked out if they’re a sensible 18 year old or not you can let them know about the S&S ISA.

This is bad advice if you opened a JISA. You can’t remove the money except in extreme circumstances (terminal illness / death of a child).

also don’t forget that interfering with mail is a criminal offence (for anyone planning to hide / open the letters addressed to a child at 18, telling them how to access their accounts)

Why does everyone have such fears that their children will be so financially irresponsible. I never have been. Money saved for ds's and CTF, and given whey they were 18, and explained in a sentence that we expected them to do something very serious with it i.e. basically only towards a deposit on a mortgage, nothing silly or trivia like holidays, cars, helping or impressing friends out at uni, none of that nonsense. Which they agreed.
What sort of children are you raising if they are silly and don't have money sense , maybe you should be addressing that first.

I think there will always be a risk there but sometimes you don’t have a choice. My children inherited directly and we’ve invested it on their behalf. By the time they come of age they could have a fairly substantial pot. We have to do our best to educate them over time that it’s there as a house deposit and to safeguard their future. If they spend some on travel or life enhancing hobbies etc I wouldn’t see it as a waste.

We put Christmas and birthday money into a more accessible account for them and that is the money they’ll learn how to spend/save and make mistakes with.

As a counter balance, any money we’re saving for our children will go into junior SIPPs. They won’t be able to touch it for decades and the value of compounding over that time will give them a leg up when we’re potentially not here to help anymore. The biggest thing I’ll be teaching mine 18 is about pensions, investments and the power of compounding.

Why does everyone have such fears that their children will be so financially irresponsible. I never have been. Money saved for ds's and CTF, and given whey they were 18, and explained in a sentence that we expected them to do something very serious with it i.e. basically only towards a deposit on a mortgage, nothing silly or trivia like holidays, cars, helping or impressing friends out at uni, none of that nonsense. Which they agreed.
What sort of children are you raising if they are silly and don't have money sense , maybe you should be addressing that first

@Oblomov25 gosh you’re so right. Please can you start a parenting blog. It’d be great to get more advice from you on the regular.

Valid concern. We couldn't agree so my DH has an account he pays into and he will be a joint account holder with DS when he reaches 18

I / my family pay into a smaller account which he will have when he's 18 to do as he pleases. I'm praying he's sensible (don't we all?) but I'm not as bothered about it as my DH is

You need two different savings vehicles for your children.

A trust that can be accessed at, say 30. The bulk your savings go there.

A few thousand in a Junior ISA that matures at 18 which the child can control.

Some people add a pension product to the mix in addition to those.

I saved for my eldest in a Child Trust Fund. Saving that money took a lot of sacrifice and I was proud that I could do that for him. I didn't tell him that it existed but the bank wrote to him and I didn't intercept the post! He has spent half of it on something I would rather he hadn't but I had to accept that once it was given, I lost control. I am saving for my youngest and have decided to do it differently - in an account in my name so I can decide when they can access. I will still give it freely though - it is not my money to dictate what it is spent on - I just don't want to give it at 18 necessarily

I think it's a valid concern, and it makes sense to put it into into your own ISA if you haven't hit the limits.

I don't save into JISAs for my dcs as their tax position is complex, and it's simpler to invest money in my name on their behalf. Legally it's mine but I will transfer it when it feels appropriate, some of it will be handed over at 18 but probably some will be held back. I don't think they'd waste it on drugs but I could see it frittered away.

Going to read the rest of the replies when I have time. But I have this growing issue atm and it's causing issues between myself and my husband. I have stocks and shares JISA's for each of my 2 sons. My youngest son (11) I dont have a worry about (I hope!) as I know he'll be happy and possibly dependant on my direction of what to do with the money at 18 - although I'm not planning to tell him about it until he's got something 'proper' to spend it on, and hopefully as it's invested money it'll carry on growing well as it's doing now.

My eldest son (16) however is a complete nightmare and it's very likely he will move out very soon and disown us. He is also tragically awful with money even at this age. I have no doubt he will use the money at 18 for PlayStation purchases, tiktok shop shite, KFC and haribo. Or crypto (he's a scammers dream, he's already lost hundreds and I don't know how because he's sneaky and shady). Or he'll have a gambling habit. His is worth 13k now. I guarantee it'll be entirely gone with nothing to show for it before he's aged 18.5. And there's nothing I can do about it, because it's his money.

I will do everything in my power to not let him find out about it. He does know he has savings but doesn't know the ins and outs and is too much of a shit bag to ask. If he 'divorces' us, I'll give it him eventually but I'll drag it out as long as possible because his future is not bright tbh. If he doesn't divorce us, I'll have to tell him eventually too, as I suppose it could cause issues with his own personal taxes or benefits if he doesn't know about it, but I'm hoping there's a way I can still keep hold of it for him (i don't think he'd butt heads with me about it).

Tldr: I wish I hadn't started the JISA's and instead invested it under my own name for them, and just kept on top of the admin of it.

Stocks and Shares JISA are great, as it's already invested and can't be used like a bank account. Then you can teach them about dividends, growth and time in the market.

There's a risk they'll blow it. But there's a huge opportunity to teach your children financial literacy and set them up for life.

From 13 I've taken my little one through what's happening. The regular sums getting paid in, the ups and downs. She knows the time and effort to put this away. She knows I've got a target for when she hits 18, also knows it comes with no guarantees. Now and then we'll check in on it. I'll even explain why things are going up or down. It's a huge education for her and I'm hoping she comes out of it 100x smarter than I was at 18.

@LT1233 if he is 16 are you sure it is a child trust fund not a Junior ISA

either way at 18 it will become his money and transferred into his

It started off as a CTF many years ago, then I moved it to a JISA, and then 6 years ago I moved it to a Stocks and Shares JISA which has done amazingly well even through big dips (covid). But unfortunately, and very sadly, this isn't the child who will appreciate or even deserves all of this. He'll get the money, it is his, I just hope I can influence when he does.

And now I've read the replies, it makes me quite sad to think that some people think it's as easy as 'bringing a child up right'. If only.

I think it was more you just have to hope they grow up well@LT1233 and if you start by not wanting to give them the money because they might you are potentially actually starting it because you don’t trust them. 16 is tricky hopefully he will come back

you did the right thing opening the account and giving the money is also the right thing beyond that there isn’t much yiu can do but hope

Can't tell you how much of my adult life has been spent hoping on this boy! I feel like I've had hope obstructing my airways for 16 years now haha. Alas, the last 18 months have just got so much worse so I guess the next 18 months up to him being age 18 are unlikely to reveal some miraculous life pivot. It's not even because of the thread example of extremes where kids are turning out to be mad drug addicts, some of them are just very different and very challenging in other less obvious ways, and that's just always something you should remember when it comes to saving your hard earned money for them, or gifting them large inheritance etc. When they're 18, it's theirs, and your hopes and dreams for them when they're babies when you're commencing these financial products for them are just that... hopes and dreams!

Seems unfair that you ate treating the dc differently though.

I’m planning to strong arm my son into putting it into a 3y bond at age 18 on the agreement he leaves it to age 21. And I’ll pay his uni tuition fees as reward. Then he has the money for house deposit after uni

@Jaimenotjamie
Very funny. But seriously this is just common sense. None of Ds1's friends have touched their savings or CTF given to them at 18.

@Jaimenotjamie
Plus I've had plenty of massive parenting failures. But financial common sense in dc is something we should all be aiming for?

I won’t be saving in an account in my DDs name. I will save in my name & then help her where appropriate.

I agree with your dh but then my brother was a teenage drug addict.