AIBU to avoid junior ISAs because children get access at 18?

[flipfloplaugh]

I was about to start a junior ISA for my kids when I realised they would get the money no strings attached at 18. That's insane!! They're small at the moment, and I have no idea what they will be like at 18... I would have probably wasted a bit of it at 18, but several of my friends would have blown it all almost instantly on absolute nonsense. The v few people I know who have trust funds have trustees to stop daft usage and don't get the money until at least 25 and possibly later. Why on earth would I save money now to have it potentially wasted by some dingbat 18 year old??

I feel the same, I will save up a bit and gift some if I feel he deserves it and can be responsible!

I totally agree.

Agreed. We will use our own savings to support our children.

We set up ISAs for both kids and had this realisation when they were 7 and 10. We moved the money into an account in our name and have continued saving. Depending on what they are like at 18 and what they want to do then we'll tell them. Money for uni? Fine. Travelling? Get a job and save half yourself. Car? If they get a job to pay for the petrol and upkeep etc.
Ideally it will be for a house deposit. We live in a city with 4 universities so if they do want to go (we won't be pushing it) they can live at home.

i set my kids up with junior pensions for that reason. They can’t use the money until they’re in the 50s.

Having said that I also pay their pocket money directly into their bank accounts and they save most of it by transferring it into a higher interest savings account. They have adhd so I was worried they’d be impulsive. They had a few months of wasting their money on utter crap and learnt from it and now dd2 is ‘saving to buy a house’ (she’s only 15) and dd1 is saving for university.

I completely agree. If you want to give them something which will support them in later life you could start paying into a pension for them now and put the age of about 50 or 55 on it. It won’t allow them to retire at that age, but would give them some stability then.

I'm saving in my own name and will give money if and when they are responsible enough to use it.

How did you move it if you don’t mind me asking? I would like to move my DS but not sure how to go about it! Thanks

My kids have Junior ISAs that I set for them as their grandmother is gifting them small lump sums annually. Her hope is they will eventually use the money towards further education/car purchase etc. I have no issue with this - I think our role is to teach them the skills to understand and manage their own finances independently. I was certainly managing my own by the time I was 18.

It just seems so weird that they're set up like that. Who really knows what a child is going to be like at 18 - you can see many paths that being landed with a chunk of money at the age could literally STOP a child becoming a saver. "Oh, it all disappears overnight, what's the point in saving ever?"

Definitely agree with the idea that kids have to learn, but I am not at all convinced that giving them a largish lump sum with no strings at all at 18 is the best way of teaching them.

I guess because the one thing you do know is that at 18 they are an adult. Whether they are a daft one or a sensible one is the unknown but they are an adult nevertheless.

You aren’t legally allowed to move money from a child’s JISA into an account in your name. It’s not possible, for good reason. It has to stay in an account in their name because once it goes into a JISA it’s their money. Even if you saved it you can’t take it back.

Yes agreed and we stopped saving in ours after I read on here no advantages unless you're already maxing out your own ISA limit.

I have a financial advisor and he asked what I wanted to do when my child turned 18.
I didn’t want them to have free access to the money without support and guidance at that age so on the advisors advice I put the ISA in my name.
as long as you aren’t going to exceed your annual ISA limit with both your and their savings combined then this is the smart thing to do, if you’d rather maintain some control over the money at 18.

(I’m hoping to give it to my son to support uni or a house deposit or some other worthwhile investment that suits his direction at the time. But much as I hope he’s sensible, there are plenty of 18 year olds who would blow it on drugs/parties etc and I can’t be sure he won’t be one of them when it’s still a decade away!)

Unless you’re maxing out your own ISAs there’s no benefit to doing this. Or perhaps if grandparents etc want to give money.

With respect, the best of their lives will be behind them at 50. Along with all the large milestones and associated expenses.

I think JISA is only worthwhile if you are already using up your own ISA allowances each year - because of the tax-free growth, which you can’t get elsewhere.

I have JISAs for my kids, the intention is to use the money as w house deposit. I plan on teaching them about finance and investing - and will make it v clear if they spend it the bank of mum and dad will be closed for further business. And if they don’t touch it - I’ll top up their deposit further when they buy a house.

If you aren’t maxing out pension / your own ISAs I’d focus on that, as you can just hand the money over instead. Maybe have a token amount in the JISA to teach them about investing.

I completely agree. My very irresponsible nearly 18 year old will get a few thousand pounds shortly and it may well be frittered away. In hindsight I wouldn't have done this.

They have adhd and autism and are not yet financially responsible.

Thankfully other savings are in my name only and will remain that way for the foreseeable.

I just don’t see the appeal in investing for my child’s retirement over improving their life from early adulthood.

How exasperating to be unable to buy a house while sitting on that sum in a pension.

And - it would be nice to see them enjoy that money while I’m alive!

I did this, one used it towards their deposit, one travelled, one for a fancy car. Each to their own. I also put some money aside that I control.

I agree. My son was in the cohort to get government money to put into a child trust fund. I added only £5 each month for the reasons you state. Miraculously the last time I saw the balance a while ago it was 3.5k.

My son (16) knows about the account. He wants to go to uni and if he goes to London I think he will need subsidising by about 1k each month, even borrowing the max loans. So if the child trust fund account reaches 4k that will last 4 months. Cost of living/studying away from home is crazy. We are trying to save 12k (including the child trust fund) to cover the first year. My son is also saving towards this from his job and has over 1k.

When he gets to uni I hope myself and my husband will up our earnings by £500 each month- this will be easier as we'll have one child to care for rather than 2 of different ages and different needs and I'm hoping that my son can work towards earning £500 each month so the finances are sustainable second year onwards.

I would say yes be sceptical about kids having access to lots of money at 18 but do save for them (even in your name) as wanting to learn to drive/go to uni comes around quickly and it is expensive!

The very reason why no money is saved in junior isas for my kids!
I know several people who's kids gained access at 18, absolutely swore blind the money would only go on something sensible, a year or two later significant chunks of money were gone as their DC simply couldn't resist dipping into it when short of cash or wanting something without having to wait to save for it. The money they imagined might go on a house deposit or similar was generally fritters a couple of hundred here, a couple of hundred there. 18 year olds aren't sensible enough by and large to he trusted with big savings pots!

My eldest DC was a recipient of a whole £50 child trust fund (narrows their birthdate to a very defined period!)

I’ve moved that into a JISA and opened one for other DC, add a token amount each month and that’ll be their 18th birthday presents to spend as they want. I’m hoping it’ll be a useful demonstration of how quickly it can be blown and how long it took to save up, also it’s a stocks & shares JISA so also some insight on to the importance of compounding when investing.

I had a government trust fund for my dd which she accessed at 18yo, it had around 12k in it.

She used some money for a car (around 5k) and some towards travelling but the bulk of it she still has in savings.

Not all 18yos will blow it on rubbish, how will they ever learn to manage money if they’re not given the opportunity to learn.