to think that adding massive amounts to you child's (gov) trust fund is a silly idea?

[bogie]

I think saving for your children is the best thing you can do obv... But with the child trust fund they have complete control of that money when they turn 18, you have no say in what happens with it.

I speak from experiance my mum saved 20,000 each for me and my brother, I was given acsess to 10,000 when I was 16/17 and I shit you not I spent it in 5 months on going clubbing, out for meals, and genral tat.

I have spoken to people who are planning on (or already have) put thousands of pounds into this account.

I understand that some 18 year olds will be grown up enough to use the money wisely but surly you would rather invest it in a high intrest account that you could control so they used it for things they really need (uni fees, car, deposit for a house ect.)

I have a savings account which is in my name. I save money for the children but have control over it so when they are older if they need money for uni or whatever it will be there they just need to ask. If my husband and i die before then it goes to my sister (who would look after them) to help with the cost of raising them as we have three (hopefully soon to be four!). I had a savings account in my name when I was a child and ended up giving the money to my parents (who were very bad with money) and so I have been so careful not to let my kids be left with nothing if I die!

I thought this was about the fact they seem to be decreasing in value - i'm avoiding opening DD's for that reason

I have seen this a few times with people at school who (very sadly) lost a parent.

Come 18 the lots was blown on drugs, nights out and impressing their mates.

I had one friend at Uni who lost his Dad in the second year so was slightly older, and he spent the money on a house which must be worth a lot by now.

18 is still quite young, and realistically probably not an age when you are going to be making big financial commitments etc like buying a house.

Our savings for DD are in accounts in our name. When the time comes for her to need help with a house deposit we should be able to help her. Same with University.

I strongly believe that if we've chosen to graft hard and put money aside for her future (which is optional, unlike clothing, feeding her now etc etc) then it is up to us to decide what we want to help her with.

Yanbu. I blew a couple of grand when I was younger I regret it and I don't want to tempt my dc's to do the same. They have separate accounts that I won't be telling them about and will only get when I think they need it, probably towards a house.

I think a lot of kids are going to blow the money. Can you magine the carnage / shopping spree's when they turn 18 in their second years at college.

Some kids will be good with it, but I think they will be in the minority.

Our children will have access to some money at 18 via the trust fund. I think it is important for them to learn and understand the value of money, and we will try to teach them this. If, at 18, they blow it, it will be gone.

However, we will only invest a small amount. And we will invest the bulk of it elsewhere, which we will give them when we feel they are responsible enough to manage it. It might be at 18 with the CTF, or it might be later as a deposit on their first property or car, or who knows. If, then hey blow th CTF they will not have blown too much money and ruined any potential for benefiting from our saving and hopefully learnt a valuable lesson in the process. If they do not learn anything, they will not get any more money.

It is all very well saying how responsible you were as an 18 year old but no one knows what the future holds for their children. And that is exactly the point.

I came into some money at 18 from my grandparents, which I got in half-yearly allowances of about £250 a time. It was great - enough to pay for me to go on holiday in the summer and to save my earnings for paying towards the cost of living. It was enough to make a real difference, but if I had blown it on booze (which I was far too sensible to do), I would only have blown £250 at a time. Probably a good call from my grandparents.

grendelsmum see, that is a great idea. It is sensible. You chose to use it sensibly, but would not have wasted so much if you did go on a blow out.

I'm with the not putting alot of money into the child trust fund camp. I have put away the £250 and £10.00 a month which I thought wasn't enough. After reading this I might cancel it and put the £10.00 into his building soc account which I control (I'm also going to double check that)GrendelsMum I like the £250 twice a year.
For years I have put money in a works saving that pays out every 5 years. The interest rate was never great but it paid for one-off fab holidays when I was single. paid for me to be at home a little longer with Ds. I think when the time comes I won't be too nutty so not offer Ds some sensible financial help e.g uni, house, cleaner when he has his first baby! (I'm going to be a fab MiL)
[Smile]

mine have had what the government have put in plus £5 each a month.

When my father died, he left a sum of money to DS aged 6 (his only grandchild) This was placed in an investment scheme by the solicitor dealing with the will, and he and I are executors. DS cannot access the money without our permission even when he is of an age for it to be released to him. As he was so young when he inherited, I didn't tell him about it, and he still knows nothing now. I wish the investment wasn't linked to the stock market though, perhaps in the next 2 years the value might pick up.

He was born before the child trust fund was started, but he had a savings account from birth, with money from GP's and child benefit in it.

What do you do if a set of GPs have already put lots into ctf or similar accounts and their grandchildren will be getting it at 18 whether you like it or not? How do you prepare a child, if you can, at all?

v interestingthread. We have been advised that the CTF is the most tax efficient way to save for our children and so are adding to it. We see it as saving for uni/college should our dc wish to go. However, I totally take the OP's point, as it is a concern to us. My brothers and I inherited money at 25. We knew nothing about it before hand and were sworn to secrecy not to let the younger siblings know once we had ours. Myself and 2 brothers spent it wisely, the other brother squandered his. But he is hopeless with money, bless him, and would squander it now at aged 40 if he were given it again.

I think it would be a bad idea for another reason: you have no access to it.

Better to save the money in your child's name somewhere that you have access to, so you can borrow it back in an emergency (my parents had to do this when my dad was made redundant).

meglet how old were you?

delphinus we are in exactly the same situation (see my post yesterday evening).

Ds1 has 2K in his currently and debates are ongoing with fil who wishes to put in 1K a year into each of my 2 dss ctf accounts.

We don't want him to do this - we want the money where we can control when they recieve it for reasons stated in this thread. Don't want to control what they spend it on and woudl respect fil's wishes as to how the money was used (and clearly very grateful for the money in the first place). We are actively saving ourselves for university / house / deposit / car / other 'sensible' stuff for the boys anyway so don't expect his money to go towards this which is one of his worries as he would like the boys to be able to do something special of their choice with it.

Fil is digging his heels in a bit and realistically he can giuve the dss whatever he likes when they turn 18 can't he so we are playig it carefully. Basically if he refuses to listen to our concerns we will be doing something along the lines of telling the boys to use fils money for uni / whatever is relevant for their future at 18 and that if they graduate with no debt / are otherwise responsible with it we will match it.

Clearly how we actually do this will have to be modified depending on what they are like / what they want to do with their lives but we thought this might be one way to play it.

We didn't even bother with the trust fund thing for ds to be honest.

He has a savings account which my father set up, (account is in joint names ds and I) which ds will not have access to until I deem it to be the right time. DS won't even know about it, my dads hope is that it will be a vast amount by the time he needs a deposit for a house/has a child etc so he can have it at a time when he needs it for something substatial instead of wasting it.

My mother saved £10,000 for me, I got acess to it when I was 18 and pissed the lot up the wall in the space of 6 months, despite being brought up to know the value of money etc. 18 year old are not usually the most sensible headed beings when handed a huge amount of money on a plate.

I'm glad that I didn't get any money when I was 18. at 20 I'm still learning about how to use money and save money, etc. I'd have blown it two years ago just as I probably would now! (I am learning to be a responsible adult in regards to myself and my finances, it's just taking a while )

Saving for a child via the CTF vehicle is tax efficient from both inheritance and income tax perspective, particularly if their parents are higher rate tax payers.

There is no need to put massive amounts in there (£1,200 yearly cap anyway) but a sensible sum could complement a savings plan that encompasses both CTF and other investments in the parents' name.

At 18, my dcs will have a lot of calls on the sum of money, namely uni fees and expenses, car, accommodation, gap year. That would be a good time to work out with them the best way to earmark that money. Of course, if they were profligate, then the heavy implication is that the bank of mum and dad would be closed to further largess.

I was very sensible at 18, as were my siblings. Heck, I was saving all the money I made from giving tuition and summer jobs. If I had a lump sum at that age, I would have invested it wisely and probably been in clover in my twenties.

Many of my friends had parents buy them flats around that age, which appreciated enormously, so that when they were ready to buy their first property, they were able to skip the starter home and go straight to an intermediate/final family home.

ignorant: but if you are an SAHM can't the money be tax efficient by going into your account?

Yes, you have a personal allowance of £6,475 (under current rules) which won't be consumed by employment income if you are a SAHM. So if the interest on your savings (and income from other investments) does not exceed that amount, you don't attract any tax.

Also, good idea to use up your ISA allowance to do that, particularly if you are investing in stocks and shares, as you won't be taxed on any interest income or capital gains.

We put a little bit into their child trust funds each month, and a bit more into a saving account to be split between them when we decide.