If you have savings for your children ...

[yoursworried]

Are they in an ISA in their name or in yours? DH and I have some stocks and shares Junior ISAs for our two DC who are currently 4 and 6. They are currently only at around 3k each but we hope for 10-15k in each by the time they are 18. (We are about to earn quite a bit more).
I am suddenly a bit worried about the fact they will have access to cash at 18; I want it to be for something sensible of course but I know what I was like at 18 and it would have disappeared on nothing much. Should I
A) Carry on investing in these and hope for the best in terms of their attitude at 18
B) stop where we are and save future money into accounts in our own name
C) carry on as we are and just take the money out and stick it elsewhere at 17 and a half leaving them 1k or so to have some fun with?

I can see that these ISAs are good as they've grown quite a bit since we started but I'm worried about them having money at 18.

DS has a child trust fund kicking around that his dad insisted on setting up with his control only. It had the vouchers go in and not much more, but he will get that at 18. He has a regular saver that matures into a savings account. These are in his name but I am trustee. He won't know about these accounts until he needs to. I have money in shares completely in my name which are actually earmarked for him when there comes a point that money is needed.

Our DC had CTF's which are now JISA's. Growth has exceeded my expectations and they are currently worth £65K+ & £57K+.

DC(15) is aware that the aim is to grow his pot to generate income for university expenses and beyond. I've started to discuss how I select the holdings in his portfolio and he knows that it's in his own interest to preserve as much capital growth as possible for his own future. Obviously, there is a risk that he would just sell up all his stock and splurge it all but I believe that a little financial education goes a long way towards him making self informed decisions regarding stock selection/purchase/sale. It's his own money at the end of the day - he needs to learn to preserve it. There's a finite supply and when it's gone, it's gone. The lesson is that it's easy to spend it but less so to earn it/preserve it/grow it and make it last for your own purposes.

@sansou

I'm looking for stocks and shares isa, are you able to point me towards which one you went for or the breakdown in it? Was it DIY or did you have pre set up one thanks

Obviously, someone took offence that I am a saver. I did think about not posting the actual amounts here but it’s an anonymous public forum and MN is one of the few places that you can discuss personal finances frankly which just isn’t possible in RL.

All I will say is I saved £100 pcm for the first 12 yrs and thrown in the odd £50/£100 Birthday Christmas money. We paid off our mortgage (modest one) in the last 3yrs and so have only recently be able to utilise the full JISA allowances. No inheritances or massive lump sums here - all stock market growth in fairly popular blue chip stock/funds.

I’m a prime example of what a regular £100 pcm DD saving in a S&S JISA over the long term could do and I refuse to apologise about it.

Yes, I realise that there will be plenty on MN who couldn’t afford to save £100 pcm but there are also plenty who can & do!

It’s not uncommon for parents of uni students atm to subsidise them by £400 pcm or more so for us, their JISAs mean that we don’t have to find the money from future income since we would like the choice to work less in our 60’s. You can’t see what’s in the future but I can control the here and now.

I’m a prime example of what a regular £100 pcm DD saving in a S&S JISA over the long term could do and I refuse to apologise about it.
Well said and I completely agree. Any small amount that can be put away regularly over a long period of time will grow well thanks to the magic of compound interest.
For higher rate tax payers it makes more sense to maximise the parents' ISA before investing in kids' names. With the allowance currently at 20k for adult ISA, that's a significant amount that can be saved each year.
Sticks and Shares ISA is a good option for long term savings. If money can be left untouched for 5 - 10 years, then the growth in Stocks and Shares ISA is significantly over and above inflation.

Any money given by relatives etc are in an account in her name, we also have a savings account for her in our names- and one which is in my name which is just in case we need etc for school stuff etc. So 3 in total but it works for us :)

I have a junior ISA for my son. I can find out the balance and obviously people can transfer money in but I can't touch the money at all, and neither can he until hes 18. However, as others have mentioned doing, I might not tell him about it until he is say 21 or 25. It depends what he is doing at that point, if he wants to buy a house, go to uni, go travelling. It will be a hell of a lot of money by that time and I'm not going to let it be wasted. It's quite a big sum already (from when I was working full time, I'm currently only putting tiny spare amounts in there) and therefore I couldn't afford to save it in my name for him as it affects benefits and my student loans. (I know this isn't the point of the thread but I have no idea how I'm going to keep saving for a house as once my own savings go above a certain amount they count towards everything, it's no wonder so many people never have a chance of owning their own home.)

I think it's important to add (that I missed in my previous comment), I specifically chose an account with a bank that writes to me as the registered contact and requires both of us to go in before it changes over to a normal ISA, rather than just sending all the info and access to my son when he turns 18. Then we will sit down and have a discussion about it. Obviously, everyone hopes their child will be responsible with money and not blow it, I'm hoping I'm doing enough to teach my son the value of it too so that when I do tell him (hopefully as soon as 18 comes around), it is spent usefully.

bank.....requires both of us to go in before it changes over to a normal ISA

so that when I do tell him (hopefully as soon as 18 comes around), it is spent usefully.

But if you decide he’s not old enough to have the money at 18, what will you do? An 18yo can’t have a JISA - you either close it, in which case it will become his anyway (your link to it stops when it’s no longer a JISA) or it has to become an adult ISA. The latter has to be linked to a NI number in the adults (ie your sons) name - he will then be authorised owner, not you. All communications to you will stop, as an adult ISA can only have the adults name linked to it.

It doesn’t matter if you both need to go in - the bank can’t keep the money in a JISA once they are 18!!!

Once he’s the authorised owner, how do you intend him not knowing about it? Removing his post before he opens it? Surely it is better, as sansou said, to involve the child in investment picking?

Our two children both inherited significant six figure sums when grandparents died and they were about 10 & 12.
It is invested in the least liquid assets possible - a house and funds which need to be sold through a fund platform.
When eldest was 17 (and talking about Uni) we explained about the money and spent the next year before he was 18 discussing his options. Rent from the house now pays some of his uni living costs and he helps manage the property etc. He has left the funds invested though.
We figured it was best to keep the money away from banks and building societies which could be accessed with a couple of clicks on a phone! ( To be fair, his S&S isas could be sold relatively easily, but DS still sees them as more complicated and ‘for the long term’ as that’s how we’ve always positioned them.)

BTW - nothing to stop a parent consolidating all junior cash isas into a S&S ISA before they’re 18 but the account will transfer to them at 18.

Financial Services worker here - for those you who are saying you will not tell the DC they have accounts at 18 ...... JISA cease to become any of the parents business on the 18th birthday. The parent is a "registered contact" for setting up of the account until the account matures on the 18th birthday. The bank or building society will not speak to the parent after the 18th birthday as the "child" is now an adult. The bank will write to the child to advise them they need to do something with their maturing JISA and provide adult ID to the bank. If you intercept the post you are committing a fraud. Plus if they choose to pay into another ISA else where HMRC will write to them.

As for other accounts held in a child's name. Once you have put money into a child's account it then belongs to them - not you - them. The banks should be asking questions for every withdrawal that is made and whether it is for the purpose of the child. If it is not, or if they suspect money laundering, they are within their rights to refuse the withdrawal and freeze the account whilst financial crime can review the account.

This annoys me so much as I have been on the receiving end of 18/19 year olds doing searches of banks to see if they have any accounts and trying to get hold of money that is rightfully theirs.

Please do not hide money from your children - speak to them about money and think carefully about how much is solely in the child's name because banks and building societies are more aware of money laundering and parents hiding money more than ever.

Could a financial services organisation not launch a product that is kept in trust for a child until say 21 or 25? I'm sure there would be a market for it!
I know you can set up a trust with a solicitor etc, but it's a bit of a faff...

@Anotherloverholeinyohead - thanks for explaining this. I am saving regularly into an account in my own make for DSs as back when I started we didn’t want to take the risk of handing over the money if kids turned out to be irresponsible, into drugs etc. There is an account with about £1000 a junior saver in DS1s name.
Can I clarify- if I had concerns ( which touch wood I don’t) would I be entitled to remove money before his 18th birthday, and put it in an account in my/ DHs name? Needless to say I am not thinking of money laundering!

@whataboutbob - what benefit would your child be getting from the withdrawal? The money is not being spent on him just taken from him.

How would you feel if your parent took money out of your bank account without your knowledge "just in case" you spent too much of your wages on designer handbags (just an example) and put it in their bank account - would you call that good money management or theft? The principle is the same the ages of the people are just different.

You put the money into accounts in their name the money is theirs. You are the trustee (the child is the owner beneficery) and you are expected to act in the best interests of the child -yes if you see an account paying a higher interest rate - that is a valid reason to move the money - as long as the new account is in the child's name.

More teenagers/young adults are becoming more money savvy and know how to ask for information requests where - once identification is confirmed - financial institutions have to give details of all the information that is held about them. I've seen it many many times.

Just in case I misunderstood - @whataboutbob - if that £1000 is in a junior ISA then no you would not be able to withdraw before the child is 18. Withdrawals can only be made by the owner beneficiery (the child) after the 18th birthday.

As others on this thread have said, sometimes kids are not responsible with money and as a parent you might have to make the decision not to pass on a relatively large sum to them when they turn 18, that’s why I was asking.

You may feel that they are not be responsible at 18 - but legally they are an adult and the money is in their name in their account and they can spend it how they see fit.

Plus you are not "passing money on to them" - it was always theirs to begin with.

Having reflected on this thread I think some posts have been quite extreme, specifically morally.

I put money aside for my kids. Other money I was given to spend or save for them I put with my money for them. I put it in a bank account in their name. Based on this scaremongering I have removed it from their name into a bank account in my name. It is still all mine to do what I like with at this stage. I still intend to spend it on my kids.

I have some protection now to control what my kids spend it on.

I've not done anything wrong or immoral.

itsboiledeggsagain I'm sure yours and other parents' intentions are good when they do this, but the problem is that it's not really in the best interests of the child:

• children's accounts tend to have much higher rates of interest than an adult's saving account and with compound interest over a childhood, they're missing out on a sizeable gain
• children have their own tax free allowances, whereas money saved in your account contributes to your taxable amount (although admittedly, you have to save quite a lot before you're getting into the £1000+ savings interest which is then taxed)
• there's always a risk that money in your accounts can be taken into account in bankruptcy, eligibility for benefits etc
• junior ISAs allow the build up of an amount which continues to grow, tax free, even once the child turns 18
• in the event of your death, the money 'for children' would just be combined into your estate, with no guarantees they would ever get any of it.
• in the event of a divorce that money would be considered part of your share of assets.

It's really tricky - we all want to help our children by saving for them a bit if we can, but it seems you're damned if you do and damned if you don't!

I secretly saved for years for both my DC 17th birthdays for driving lessons. Then a nice 18th and 21st. I didn't tell them about it as this would have lulled them into not saving. When they inherited a few thousand from their Grandparents, I held it back until they wanted to buy a car each. So, I feel they were very grateful and it wasn't expected.

Sophie - sorry I didn't see it earlier - it automatically changed over to an adult savings account but I still have to go in to sign for my own name to be removed as registered contact. He's only 5 atm so I've plenty of time to think about that. He doesn't have a NI number, or an email address, or a contact number - it can only come to me.

Upon reading further comments, maybe mine isn't a JISA then as I thought. It definitely requires me to sign off on it before he has full access to it 🤷‍♀️

Our DS inherited £30,000 when he was 14 from my dad. We put the money into a building society account. When he was 18 we had a tAlk to him about what to do next with his money. As he was about to go to Uni he put the whole amount into a deposit for a flat which he now rents out in a town local to us. Because he only has a part time job to fit around Uni he couldn’t get the mortgage on his own so DH is also on the mortgage but we don’t contribute towards it. He is getting far more now for his money than when it was in a savings account. Later he can decide whether he wants to live in the flat or keep it as a rental property in the long term.

Ours only have £3000 each. DS12 has already said he will use it for a deposit on a flat or house or something worth the money. Dd15 is autistic and burst into tears thinking she had to move out when she's older. Won't even discuss money or growing up so not sure what we'll do.