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??

We have JISAs for our DC. As with so many things I can only hope they’ll be sensible with it when they reach 18. We’ve partly done it to take the pressure off paying for university later when we’ll likely be retired, but if we can pay for university then I’m hoping they’ll use it for a house deposit or travel, or just treat themselves to some little luxuries with the interest. We max out our own ISAs, otherwise I wouldn’t prioritise theirs over ours.

I agree with your concerns. When they were first started, a lot fewer people continued education to university, so much less of an issue, I would venture.

My son has £5000 in his, I stopped adding to it when I realised he was so utterly rubbish with money. No amount of telling him to save etc works. I know it’s just going to be wasted and that pisses me off. I paid into a pension for him instead. Figured he might be a bit more responsible at 55 🤣🤣

We have a JISA for both of our DC. We have added £100 a month. We have always encouraged the DC to budget and learn about money and how it works so that by the time the eldest was 18, he was educated enough to take the matured amount and drip it into a LISA and S+S ISA's. It has matured to about £45k now and has be allocated for a house deposit in a couple of years.

I agree, my sd had one, spent thousands we suspect on SHEIN

Positive story here - both my DC had JISAs. They knew for a long time before they were 18 they had them. I invested them in stocks and shares and used it as a way of teaching them about saving in a tax efficient way. They also both knew that if they chose to spend it all there’s nothing else until we are dead. DD is 23 and DS 19 and neither have taken a penny out. You have to accept your kids are adults at some point add trust you’ve bought them up to be sensible.

I can't believe the number of parents on this thread who will only trust their DC to spend wisely when they're 55. Talk about helicopter parenting 😁

Thank you so much. I thought jisa would be the best option for them. I estimate about 30k too. I'm going to contact the bank tomorrow about joint signatories. Obviously I don't know how responsible they are going to be at 18 and would hate for them to squander it on shit. I know it's not a huge amount but it's still a decent sum.

This is the exact reason I won’t have them, a relative offered to save quite a substantial amount of money for them into JISAs and a convinced them to put it into an ISA in my name. At 18 I was very impulsive and I would have spent it within weeks on clothes and holidays. The way I look at it it’s not ‘their’ money, they haven’t earned it, it’s money for them but for a specific purpose.

Really? My kids over 18 and have no idea…

They definitely write to child as they approach 18.

We had a JISA for Ds18 , just before his 18 we finally (took ages to track down) found his Child Trust Fund that had £250 paid into it by Government - I say found as we had no idea it existed (we adopted DS at 4.5) - CTF people wrote directly to DS as to what he wanted to do with funds- he chose to transfer it to the JISA we had set up that then matured to an ISA.

I didn’t think you could have joint signatories on an ISA as mentioned by a PP ?

Dont tell them - mine have and are unaware. We also save in to a savings account which they know about!
Eldest now 20 asked me a couple of weeks ago if he had one. I said yes - it is now an adult isa and you can access it. He asked how much and said you better keep that safe then till I buy a house!
He is oblivious as to which company has it.

Op there are so many variables.
Is the family generally wealthy ?
Have the Dc had bank accounts they manage from a young age ? Have they been privey to house hold fiances from a young age and seen the parents save money ?
Have they been taught to save from a young age ?
Do they undertsnd proper long term holding of assets eg investing ?
What money will they get at 18 ,from a poorer family 1000?
Or richer much more ? Have they been used to having some money from a good time or will what they get be a huge relief and a bit of freedom to have some fun from usually straightened circumstances ?

Are the DC from more comfortable families where they don't need to blow any money because they can have a good time ?
Do they work ?
My own DC will have a very robust sum at 18 and their financial education started very early with all the above.

They understand if they spent their money they have no money.
If they keep it invested they can skim off their capital and have money and their capital.
It wasn't my choose it was inheritance.

Once DC hit 18 they start their journey and make their choices.
We have to arm them with information to make food choices.
Too many people on here do no financial education and expect their DC to be careful with money.

@GreenSmallBird yes because you have woven it into their life
Not presented them with a huge sum and 18 then said ....don't touch it !
What do people expect !!

You cant do that for a junior ISA.

Can only move it to another junior ISA. Or close it if your child has a terminal illness.

It must not have been an ISA.

Quite! I’m a bit shocked tbh! How does anyone imagine their offspring will learn?

Didn't the JISA provider contact him directly and ask for his instructions on what to do with the funds when he reached 18? How did he not know that it had become an adult ISA?

It obviously depends on how trusting and compliant your DC are, but I set up accounts in their name but don't give them any details. They can't withdraw, simple.
Tbt I think I've instilled enough financial awareness for him to not contradict what I've tried to instill in him. He's not getting his hands on 'free money' to do what he wants. Like I had to learn, he earns it, working. .

I would absolutely intercept mail to ensure that his money was safe. I have no qualms with that. Not legal I know but I would tell him about it and keep him updated. If I felt the time was right, he can have it. Atm, he's far too young to be responsible for large sums of money.

Totally agree. I’ve seen cases on MN where the 18yo blows the ISA, which is what alerted me to the problem. We’re building one but it will never amount to much, so it won’t be problematic.

We chose a savings account with Foresters Friendly which DC has no access to until they're 24! This was opened a long time ago so don't know if they still do them

Because when we were 18 DH and I both inherited money, and wasted it on student shite as we were only 18!

Hoping by 24 there'd be better choices made 🙈

All 3 of mine had access at 18. None have wasted it, all pretty tight really and like to see their savings build. One of my nieces blew hers, she is a spender. She’s just bought her first house and contributed zero to the deposit. Her sister is much more sensible. So yes, probably best to save it for them in your own name as some kids are spenders. We have spent time educating mine about value of money and don’t waste loads on endless takeaways etc so that’s never been something that are used to as normal.

Mine will have quite a bit in JISAs, mainly grandparent contributions, so I am quite concerned about how sensible they will be. They are primary age at present so it's hard to say.

My understanding is that if it's not in a JISA but instead in a savings account in their name then it would be taxed at my (additional) rate as I'd be able to access it. But I should check if that's still true even if the money comes from grandparents, rather than from me.

My ISA is maxed out so I can't use that.

This thread has been a good reminder to look into this.

Vernan Dudley!!!!!

Well, we’ve set up JISAS for the Gdcs, and yes, I do worry/hope they’ll be sensible enough not to blow the lot - which should be a fairly substantial amount by the time they get it.

We have a very good relationship with them, eldest is coming up to 11 and TBH it’s entirely possible that neither dh nor I will be around by the time the first hits 18, and even less likely for the youngest, still only 6.

So I have drafted letters to be given to them on their 18th birthdays, saying that while they may well want to blow a small part of it, and that’s fine, do please remember a) that it’s an awful lot harder to earn or save money, than to spend it, b) they’re unlikely to be given any similar amount for a long time, and c) that one day they will probably want to buy a flat or house of their own, rather than paying rent, and will be very glad of a lump sum available for a deposit.

I have no doubt that dd will reinforce all this, and point out that Granny and Grandpa could easily have blown all this money on flash cars and all sorts of wildly expensive stuff, but chose to save it for them instead.