Savings for children

[LMonkey]

I really want to start paying into savings accounts for my two children. The obvious thing to do is a children's ISA - my issue with this and a lot of other accounts is that the children automatically gain control of the money when they turn 18, and I'd prefer to decide when they get the money when I feel that they are ready and are sensible enough to have it....maybe at 18 or maybe 20 or 21 (maybe not even then lol). Any ideas or does anyone know of any specific accounts which would allow me to do this?

How about just a normal ISA? -

Open an ISA in your name. You can then give them the money when you feel appropriate.

But I already have my own ISA. Aren't you only allowed to pay in to one ISA per tax year??

Sounds like we are talking about saving considerable amounts of money. You could consider stocks and shares or buying property. Both riskier but could work out well over the course of many years. You could also look at paying your mortgage early and saving at a much faster rate once you've done that (avoids you keeping money in a low interest account for years and years). Also some banks offer good interest rates when you least expect them, e.g. Santander has a current account where they pay 3% interest on balances up to 20k - prolly works out better than an ISA. If I were you, I'd speak to an IFA - you can talk numbers, options and risk involved- you could find sth that's a good fit for your approach to money.

Ummm no Jojo! Thanks but I'm talking about saving about £20-30 per child per month max...I'm definitely in no position to be paying my mortgage off early or buying property or anything like that

DP and I faced the same reluctance when deciding how to save for our toddler DS's future. At the time the most attractive returns came from junior ISAs, but DP was imagining that the day our son turned 18 all that money would be blown on a cocaine & drug fuelled bender in Ibiza or something... SUPPOSEDLY there is a way around something like that happening; you'd have to convince the bank that your (now adult) child is unfit to be responsible for the money. Obviously this would be a worst-case scenario, probably not achievable if it's just a matter of you and child disagreeing on how to invest their money. I don't know for certain because there was no way I could convince my partner to agree to the ISA, but I would really recommend speaking to an advisor at the bank itself about it. I'm sure plenty of other parents worry the same thing - and considering junior ISAs are very popular, there must be reason enough why people do start them after all!

Surely the answer to this dilemma and to Osquitos, is to teach your DC the value of money and savings so that they dont blow all the money at 18? Talk to them about eventually buying a house, how much money they will need for a deposit. Tell them you have a nest egg built up, but if they blow it at 18 they are on there own, no begging for a deposit later!!

My DS is 18 so I know of lots of 18yos, I know none that have gone on cocaine benders! I think the majority are very sensible these days, esp given how much university and house deposits will cost. There are always exceptions I know, but with good conversations in teen years, you will hopefully not have the exception!!

We have been saving up child benefit etc for my DC since birth, we transferred it into Junior ISAs when they could have one. We use a Stocks and shares ISA through Hargreaves Lansdown. It think the min is 50/month, if you could stretch to that. We have paid a bit more, across 2-3 funds, but 50 paid into just 1 general UK or global fund would be Ok. Yes the share market is volatile, but by paying monthly, into a fund containing a variety of shares, you smooth out the peaks and troughs.

If/when you can afford more, add a second fund. My DC funds (and mine/DH) have grown more than any cash ISA would have done.

Although the money goes in their name/control at 18 (& I don't know of any account that wouldn't - they are adults at 18), I think they are less likely to withdraw it from a stock market ISA. Not as easy as going into a bank to close a cash ISA.

If they don't know about the account then they can't access it. Although the woman in the bank got very funny with me when I said if he isn't sensible when 18 we won't tell him about it,

^ this
My dd won't know her account exists until she needs money. As in my definition of NEED, possibly not hers

Unfortunately most accounts opened for children ask for their DOB, the bank will then send them a letter on their 18th birthday with details of the account, esp an ISA which is converted into an adult ISA in their sole name at 18. In fact an ISA provider will also ask for their NI number on or close to their 16th birthday too, so keeping it a secret will not really be possible!!