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Original poster

Ideas on how DD can spend £22K Child Trust Fund - when it matures soon

60 replies

RaggedNature · 23/06/2020 16:53

In about 3 months time DD will be 18 years old.

CTF will be worth approx £22k.

I will encourage her to save some of course.

But has anyone got any ideas or suggestions for positively spending it?

A car, driving lessons are two I've thought of.

(P.S. Not sure if she wants to pursue higher or further education - she seems non-plussed at the moment.)

OP posts:
AnotherEmma · 05/07/2020 21:56

1 treat - set a maximum amount, maybe £100?
Driving lessons (could you afford to go halves with her?)
And the rest locked away in savings for a house deposit (Help to Buy ISA maybe?)

DianaT1969 · 05/07/2020 22:01

Lifetime ISA and use it for a deposit on a property. Give her a taste for flat-buying by looking at properties online.

goteam · 05/07/2020 22:34

Keep it in the bank or move to a lifetime ISA? It may seem like a lot to an 18 year old but in many parts of the country it is only the beginning of a house deposit. Maybe take some out for a second hand car but encourage driving lessons come out of earnings.

She will regret it if she spends it all. Agree with looking at flats online.

MiniMum97 · 05/07/2020 22:42

Feed it into a LISA for a house deposit.

threesecrets · 06/07/2020 19:53

Tell her she can spend £400 but the rest she should reinvest.

ssd · 06/07/2020 19:55

This is so unfair. My dcs missed this by months. We are on very low wages.
It's just not fair.

BigSandyBalls2015 · 06/07/2020 19:57

I wouldn't have told my DCs about this. 18 is too young to be sensible about it, in most cases, not always of course.

parentofteen · 06/07/2020 20:02

@ssd it's likely the OP has been topping it up also.

mrscampbellblackagain · 06/07/2020 20:07

Agree the OP will have been topping up quite a lot.

Heyhih3 · 06/07/2020 20:10

What has prompted you to give your daughter access to the money now? What is your daughter currently doing or was before COVID-19... studying/working? OP

lottiegarbanzo · 06/07/2020 20:10

She needs more than 'a chat'. She needs to learn, properly, about:

  • Compound interest and how her money would look over time, if invested in fixed interest savings accounts.
  • Pattern of increase in house prices in the UK over the last 70 years (as this money will help determine what she can afford over the next 70).
  • How mortgages work and play out over time, with different % deposit investments.
  • Pattern of change in value of shares over the same period, thinking about the points in life at which she might want to access her capital.
  • The potential mismatch between her need to access capital and asset value at that moment and how best to spread her investments to mitigate that.
  • Pensions, how the government gives you free money for saving for them and how the total asset can behave over time, with points of interest as above.

Then, were I in her position, I'd perhaps spend

lottiegarbanzo · 06/07/2020 20:13

Oh and, since she could be in a position to buy a property at a fairly young age, teaching her about how people do well, and badly, out of property, over time, would be valuable information. Where, when and what to buy, when to move up the ladder etc.

CherryPavlova · 06/07/2020 20:16

Independent financial advisor can suggest best savings account- they will be interested in 22k, lots of young people go with small amounts initially. She’d be mad not to keep it growing for a deposit.

mrsm43s · 06/07/2020 20:25

@ssd The government gave £250 for CTFs or £500 for those born into families on certain benefits, that's all. Your DC haven't narrowly missed out on tens of thousands of pounds, the OP (or someone else, but not the government) have been significantly topping up the CTF in order for it to be £22,000.

NotMyFinestMoment · 06/07/2020 20:28

Driving lessons and a car and reinvest the rest, or reinvest the lot and use it as her deposit for a property at some point in the future. Personally I would not be encouraging her to spend it at all so she can use it to get on the property ladder.

Oblomov20 · 06/07/2020 20:34

I was going to say, our CTF for ds's was £50 a month, and that certainly doesn't add up to £22k.

I'm saving for Ds1's driving lessons now.

csa26 · 06/07/2020 20:50

Agree with the house deposit. My grandparents gave us each half that amount and I didn’t touch it until I bought a home.

Maximum spend of £1k (maybe 2 if very good reason) but I would want to put that towards an amazing travel experience rather than a car. You have no idea when you’re young that your current freedom to travel won’t last! And it’s completely nuts for any teenager to be driving anything worth much...

Greenandcabbagelooking · 06/07/2020 20:59

A nice holiday when Corona is over, then save for higher education or property.

TheLegendOfZelda · 07/07/2020 06:42

@ssd

This is so unfair. My dcs missed this by months. We are on very low wages. It's just not fair.
That's capitalism for you If you'd invested large amounts every month then your children would also have £££ That's how savings work

My kids have the ctf. Theirs is worth about £800 (and that was with a government £500). It's crap that the tories took it away but it was a bit random in the first place

If you didn't put £22k into their savings then it won't be there, will it?

Bambibear70 · 07/07/2020 21:35

Would look to putting some into a lifetime ISA for a house. You can put in 4000 a year and the government adds 25%. There is a penalty though if she withdraws it to not buy a house. My son got his mortgage at 21 and daughter at 23. Most of their friends are jealous at the fact they can do what they want, e.g decorate how they want etc. They've both been in their houses for nearly 2 years and are really glad they're on the property ladder.
We had some savings this year we didnt know what to do with and have put into Virgin accounts that mature after a year and give you air miles instead of interest. The return will pay for premium flights....just a thought if she fancies travelling.

Lovemusic33 · 07/07/2020 21:43

I was given a sum of money at 18 when my parents separated (not as much as 22k) but I went shopping and spent around 1k, the rest I saved, I still have the money now. Don’t assume she will want to spend it but maybe agree an amount to spend on a few things for herself, possibly a car and driving lessons and then put the rest into a savings account or invest it?

cheeseycharlie · 07/07/2020 22:05

If you need to think this hard about it then there isn't anything she should spend on and she should lock it safely away until it's use becomes clear.
I had the same, spent it on gap year travelling, lost a lot due to stock market crash and bad boyfriend who I'm fairly certain was stealing from me. But I had the rime of my life and met my now DH. I'd say I could have had all these life changing experiences and still had half left in the bank but I frittered. Young adults not known for their self control. She should put it away until she figures out what's important for her

cheeseycharlie · 07/07/2020 22:05

If you need to think this hard about it then there isn't anything she should spend on and she should lock it safely away until it's use becomes clear.
I had the same, spent it on gap year travelling, lost a lot due to stock market crash and bad boyfriend who I'm fairly certain was stealing from me. But I had the rime of my life and met my now DH. I'd say I could have had all these life changing experiences and still had half left in the bank but I frittered. Young adults not known for their self control. She should put it away until she figures out what's important for her

cheeseycharlie · 07/07/2020 22:07

If you need to think this hard about it then there isn't anything she should spend on and she should lock it safely away until it's use becomes clear.
I had the same, spent it on gap year travelling, lost a lot due to stock market crash and bad boyfriend who I'm fairly certain was stealing from me. But I had the rime of my life and met my now DH. I'd say I could have had all these life changing experiences and still had half left in the bank but I frittered. Young adults not known for their self control. She should put it away until she figures out what's important for her.

Also she shouldn't tell any friends of boyfriends about it. People get weird about these things. I was mistreated and used by the aforementioned boyfriend, also by my own family and to a lesser extent my friend. All due t having this money.
Life had otherwise been poor and fairly shit to was all a bit overwhelming tbh.
Good luck

Onthedancefloor · 07/07/2020 22:48

DD has a CTF with about the same amount maturing this year. She knows this and has seen a recent statement. I've strongly suggested that she puts it straight into an ISA, given that shares are currently at a low. She understand this and agreed.

I did make it clear to her that at 18, the money is hers and she can choose what she wants to do with it. She said she would like me to effectively manage it for her.

I mentioned it again when we were looking at universities, e.g. that she had 20k in her CTF which would be used up more quickly if she chose to live away from home for example.