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 find it fascinating how some people spunk it all away and others don't. I have 9 cousins on one side and we all received a significant inheritance at 21. There are 5 girls and 4 boys. All 5 women bought houses with this as deposit. All 4 men had a brilliant year instead. Two of them still don't own their own homes and are we're all in our forties now.
I've always found it fascinating. I personally wonder whether it's about girls maturing faster. I appreciate my sample of nine isn't going to carry any scientific weight. My kids have ISAs but they only have one deposit in them which will compound. Anything else I save in my name as I don't hit the ISA threshold. I have a mix of the sexes. I'm going to keep hold of any other savings until they are 25 at least.

DS1 was born in 2005, so his cohort got the £500 government child trust fund. I didn’t add to it, but it was still worth over £2k when he got it at age 18. DS and all of his friends spent their child trust funds within a year or 2, basically on holidays and living at uni. Some of his friends parents had added to theirs, so they had even more.

I have no problem with it being used for just living, but if I’d been paying into it, with a view to it being used for something specific, I’d have been disappointed.

Luckily DS doesn’t smoke, vape or take drugs, but more of it was spent on beer than I would have liked!

That's what I thought about the junior pension too. They'll need the much more somewhere between ages 25 and 35, probably.

I assume you’re saying that any irresponsible behaviour on the part of young people is purely down to parenting?

Good luck! And please do come back in 10 years to update us 😂

Surely they are set up that way because legally when someone is 18 they are an adult. So they can no longer have a child ISA.

We did a pension instead for our kids but we did consider a junior ISA and just not tell them about it until you are comfortable with their attitude to money... they might technically be able to access it, but they can't if they don't know it exists...

All these righteous posts from parents of young children are making me laugh. You can be the best parent in the world, teach them about money, values, morals etc. But you just never know what might happen.

DS2 is 16, and has always been very very careful with money. He never spent his birthday and Christmas money, always saved it. Then he got a girlfriend. He loves her, and likes to buy her stuff. He’s spent about £400 on her in the past 3 months. I would never have predicted this. I despair when I see yet another Amazon parcel arriving.

I remember a post on here a while ago by someone whose son was a drug addict, and at age 21 was about to inherit a huge amount of money, all of which would be spent on drugs. There was nothing she could do about it. Her other kids were healthy and sensible, so it wasn’t a parenting failure.

Until you have an older teenager, you can’t possibly know what crazy changes occur in their brains.

I think it depends what you're putting in there. We put in the first 2 years of CB and since then, half his birthday and Christmas money. He is 7 and there's about 4k in there.

He's the only grandchild on both sides and set to inherit a fair amount so I won't really mind if he goes travelling or something with it at 18. He is older in his year so will still be in education or training.

Our own money goes in our own ISAs to give as we please.

I had access to the money my parents had saved for me once I was eighteen and didn't touch it (until I bought a property) because it was the hypothetical deposit on a house, same for my siblings. My DCs will each have a children's savings account, and I will make clear to them the importance of wise investment (e.g. in property). There's a point at which the money in the bank is too valuable to fritter away.

I recently set up Juinior SIPPs for the kids (which they don’t know about) which we will put a bit of money into every now and then. I think they are a pretty good idea, partly because of the tax that gets added (immediate return!) but also because there is so much time for the investment to compound, and time spent in the market is so valuable when it comes to investing. God knows what position my kids will be in by the time they can access it, but I really hope it will be a nice little boost when the time comes (and a reminder of their long departed mum and dad).

im tempted to also give them a bit of money each and talk them through how investing works, and how to think about picking a fund or two to put the money in within a Junior ISA. It could be a useful learning experience for them - they will see a real life example of how that investment changes over time (both the ups and the downs), and not being able to access the money might help teach them that you don’t respond to market volatility by panic selling!

We kept the Junior ISAs for the DC to choose to put their birthday / Xmas money in if they want and it's theirs to blow at 18 if they want.
We have family savings in our own names.

I'm with you on this. My dgs is a good lad at the moment, but who knows what he'll be like at 18?
I'm regularly saving money for him for when he's older. My dd is aware of this savings account and the promise that he can have the money for something worthwhile, eg, driving lessons, right of passage first lads holiday; but not for wasting it on crap at 18

Exactly. My partner received an unexpected inheritance in his mid-30s. Without it, we wouldn’t have been able to buy our house and our second child probably wouldn’t exist!

I'm probably naïve, but how does a young person find out at 18 that they suddenly have let's say 30+k somewhere? They get a letter? We are saving the money for their unis and we will make it clear that it's for that only. We don't brag to anybody or even them that they will have this and this money at 18 for them to spend on whatever they want. And we were not born here, so our parenting is probably less liberal and more traditional with strong family values, etc. Do you think this might make a difference or they are still very likely to waste it on trips, drugs etc.? TBH I would be incredibly shocked if that happens, cause we've lived quite frugally for our kids to have comfortable lives and no debt in the future.

There's a point at which the money in the bank is too valuable to fritter away.

This ^
Spaffing £5k on a gap year is one thing (& I wouldn't care if my DC did this). But burning your way through £50k is something completely different, surely most 18yo would understand this?
Also I'm not confident enough in the governing class of the UK to bet my cash on the stability of pension legislation over the next 50 years, so Sipps for kids is definitely out.

Literally just went to the bank and asked to move it and close the account. They never questioned it at all.

The ISA provider must contact the 18yo before their birthday and ask them how they wish to proceed. They will only act on the DC's instructions not the parents, intercepting letters, setting up accounts in the DC's name without their knowledge etc is illegal.
If you don't trust your DC to be sensible at 18 then don't fund their JISA

We have Junior ISAs for our children. Grandparent contributes £200 a month to it. My plan it to tell them early and always be consistent that the money is for something meaningful and not for frittering spending. They will also be told that spending it in an unapproved way will result in the consequence of us withdrawing other, big financial gifts to them.

Actually maybe it wasn't a junior ISA. It was a children's savings account with nationwide.
The had a monthly saver which the child benefit went I to which had a decent interest rate the each year it was transferred to another account. They were age 6 and 10 and between them had almost 20k.
They allowed us to transfer the money no issue.

Same. I keep all the savings in my name. I just have an account for each child. They’ll get it when they need it eg for uni or a house deposit or whatever

Not planning on telling mine they have money in an account until the right time

They write to the child to tell them just before they turn 18.

While I absolutely agree with this and hope it's the case it wasn't with my brother and I nor DH and his brother. Obviously both sets of siblings raised the same with both receiving advice from parents etc.
My brother received a lump sum at 18 and it was gone within 6 months. Has always been terrible with money, is renting and has no savings. I, on the other hand, received no lump sum but saved my ass off and got a mortgage at 30 and am now mortgage free at 44.
DH is very sensible but BIL spends as soon as he gets it.
Personality plays a big part too. I think it better to err on the side of caution as we've made sacrifices to save the money and I'd be gutted it it was wasted.

ds(22) was given his £30k JISA on his 18th.

He knew for many years it was coming to him, and we regularly spoke about where the money came from - our hard work, he saw how we managed our money so we could save for him, he knew some came from very small inheritances we had from his grand parents and shared with him.

We also made it clear it was his to blow however he wanted because we couldn't stop him, but he would never get gifted money like this again, and if he did blow it he would need to live with mummy and daddy until he was 35 and had saved it all up again for a deposit.

Allowing him to make mistakes with money and bear the consequences of them when younger, him knowing how much work we put into saving for him (we are far from wealthy) and having to stay living with us seems to have put the fear of blowing it into him 🤣

He has worked PT his way through uni so he didn't need to touch it, and is gradually transferring it into a LISA as his escape plan!

You can have the option of being joint signatories once they are 18 if that helps.

My DC will have about £30k at 18. They know about it. Hopefully they will be sensible. But we're unlikey able to support while at uni, so at least they will have that.