How to save for DC's university so they don't get it in a lump at 18?

[llamalines]

My mum has very generously offered to put a significant amount of money aside for DS for university. (I have struggled financially over the last few years. DS is very bright and my DM is comfortably off).

She's suggesting she puts it in his child trust fund.

The problem with that is he'll get it all as a lump sum aged 18.

While he's a bright young man, I don't know if I trust him to hold on to all that money to see him through 3 years of uni. (I wouldn't have been able to do it at 18! We both have ADHD and are impulsive). And he's 18 quite early on in the year, so he'll get it nearly a year before university starts. Plenty of time to fritter it away!

I suggested it goes in a trust instead and he can receive it over time, but a quick Google suggests that might be prohibitively expensive.

If she just gives it to me, on the other hand, I think there are tax implications.

Does anyone have any idea of a way to do this other than handing over a huge sum to DS when he hits 18?

It'll be about £24k (£8k for each year).

Could she hold on to it until the time?

Or you can set up a trust fund relatively inexpensively

She says she wants to get it sorted out before the budget, in case things change.

I suspect also, as she's getting older, she wants to sort things out sooner rather than later.

Might be best if she keeps hold of it until the time and release it monthly when he needs it. But if you are on low income he will get full loan so money might be best saved until he leaves, to set him up in a flat ? Unless it works out £9k per year and he won't need loan ?

Then she gives it to you and you have control over it.

edit - our kids have no savings because I got both an inheritance and a compensation pay out at 18 and blew through the lot. Disney world was brilliant though.However the memories didn’t help me much at uni.

We will maintain control over money we save for their education or house deposit or car to ensure that it is spent on what we intended, and not Mickey ears and corn dogs. (We still intend on spending something on Mickey ears and corn dogs, just not the college fund).

I'm not on low income on paper. But I have debts I'm paying off.

Yes, this is exactly what worries me!

Could you adopt a half and half approach with half going into an account with his name on it and half being in your name? Also if he doesn't know about the savings account until he goes to university he might not find it and therefore spend it before he goes to university.

My son is nearly 18 and is about to get a get a large sum due to grandparents saving in a child trust fund for him. He doesn’t want to be tempted to spend it all on daft things. We have talked about putting most of it in a new joint account (with me), or in an account that is hard to access.

We have a Nationwide Future Saver account for DSD, but how useful that will be will depends on how much you anticipate putting in it. But the account is written in trust for the child and gives parents the flexibility to access the money if required. So it’s her money, but we get to agree when she gets it. She starts uni in sept although is already 18, so it’ll be used to support her. But if she’d chosen not to go to uni she wouldn’t have got the lump sum straight away, we’d have kept it till she needed it for a car or a towards moving out and living independently or a wedding or some other big life event or need, not to just enjoy because she reached an arbitrary age.

That's really useful, thanks.