Do you save for your children's future?

[GreenTiles22]

Inspired by other threads, if you have any disposable income, do you put any into an account specifically for your children? Such as a trust fund or savings account?

I don't.

We have 2 healthy incomes, but also high outgoings - 2 new cars (leased, monthly payments), 30 year mortgage of £400k, 2 preschool kids with childcare costs each, usually 3 holidays abroad per year. We are fortunate to put savings aside and overpay our mortgage a bit each month. But I don't save for the kids. I figured that when they are older, we will assess our financial situation and gift them a sum of money when they are 21. We use most of our spare income to either build our savings or pay off the mortgage, which I thought would leave us in a healthy financial position in 15/20 years to gift any money.

What do others do?

Saved 80 per month since birth in a kids savings account which still get 2 percent. DD is 10 so has over 10k now, so I recently moved 2k into a nutmeg stocks and shares ISA, it's doing well with 5 percent profit in 2 months. I'm glad I just set up a standing order and forgot about it, then I know the kids will have money for university etc whatever my financial situation.

I don't save for my children, but only because others are kind enough to do so for me.

My children have private pensions, started at age 3 ish with a lump sum of about £3k. It doesn't feel like much, but it will grow for 20 years before most would even begin to think about pensions.

They also have stocks and shares ISAs which grandparents contribute to for Christmas and birthdays. While the kids have been young, the grandparents have all been happy to spend about £100 on a birthday/Christmas present, and the kids have been just as happy with a sticker book from granny as they would have been with something spendy. There really only a few big-ticket items that can be bought, and I tend to find them second hand and buy them myself. So the grandparents money goes straight to their ISAs, and over the years has mounted up.

We am saving in our own names and then will be able to help the kids when they need it if circumstances allow at that time. Who knows what will happen to me/DH; I'd feel a bit resentful if we need the money to look after ourselves and have given it away to the kids accounts when they're young and don't need it

I have a friend who has always saved regularly into her children's accounts. She is now struggling financially, while her primary school kids have ££££ in savings. She can't access it because a) she would feel guilty, b) she worries how she'd explain the withdrawal of money to her kids at 18 years old and c) she'd have to account for the money to her ex husband. Weird situation where the kids have money but mum struggles to pay the mortgage

I save specifically for their education. Should something happen to us financially I can’t leave it to just if there’s money left over. Education is a non-negotiable for me.

My DCs are older than yours (upper primary) but we've been saving a small amount for them from birth. DC1 has a child trust fund but they scrapped those for new savers shortly afterwards, so DC2 has a savings account with the same BS. We put £25/month into each account which will give them a useful, but not life-changing, sum when they're 18.

Inspired by the "How much should you save for your child to go to university?" calculator on the MoneySavingExpert website, we're about to start putting aside money for that, in case either of them wants to go to university or equivalent training. This isn't money for fees - it's to make up any shortfall in maintenance loans - we're not tremendously high earners but the household income is enough that our DCs won't be able to borrow the full maintenance loan. We're saving now so we top it up with a parental contribution (as is expected). Obviously, the sooner you start saving for this, the less you have to contribute each month!

I don't think I would feel comfortable just relying on unplanned savings or mortgage overpayments for this, but everyone's priorities and attitudes to risk are different, obviously! I wouldn't rely on mortgage overpayments to provide extra income in 15 years, as you'd only be able to realise the savings if you've paid off the mortgage completely by then (i.e. have no payments to make each month), or can significantly reduce your monthly payments but keep the overall term the same, or can sell the house and downsize to release some equity. But by the sound of it, we have a much smaller household income (but also smaller outgoings) than you, so perhaps we're more dependent on long-term saving for future commitments?

I didn't save anything in their names. It's usually theirs to do what they want to do with it when they are eighteen. I have heard of parents being very disappointed when the money has been spent on rubbish ( including lots of take aways, in one case)
I have saved all in my name, but know that they will have it to spend when required.

I worked out roughly what we'd need to contribute for university so topped up the Govt child trust fund from age 1 with the child benefit money and invested it in a stocks and shares ISA. At 15, there is now £22K in the pot so I'll be moving it shortly to a safer fund. That will be used to top up the maintenance loan or mean ds doesn't have to take out so much of the maintenance loan.

I didn't really miss the money as I'd never got used to it.

Yes, paying off your mortgage is great but that money’s not necessarily going to go to your kids if you need to pay for care when your older. Also you may not have the same income in 10 years say so may not have anything to gift them.

Why are you asking? You have already clearly thought through your financial strategy to help you children when they are older.

@surelynotnever because I haven't really ever considered opening a separate account for them, but thought I would see what others do and if there are reasons I wasn't aware of.

Yes, we save into a JISA for them every month and my parents contribute a nominal amount to the JISA monthly too. We also have a lump sum which we consider to be for their future education which we're about to move into a stocks and shares ISA. We will probably prioritise that and move away from the JISA. Even £10 a month from birth adds up over 18 years with a decent rate of interest.

@Fcuk38 I am making an assumption that my income will continue to increase () in the next 15 years or so, at least i bloody hope so!

I also have a life insurance policy that takes care of all debts including mortgage, plus extra cash for the kids.

Overall I guess I am assuming we will be able to raise the funds as and when the kids need them for university, or house deposit if not uni etc.

I would be gutted if they had their own savings account and then spent it on junk once they could access it, as someone else mentioned. Also if we put aside money into their own accounts, only to come into financial hardship ourselves... as a PP said that would be a strange scenario to be in.

I'm fairly comfortable with our current plans. I might start a small savings account for them but I won't be making them rich on their 18th birthdays!

We save in our own names with a view to helping our kids out when they are older.

We don't save enough to use up our tax effcient allowances and I prefer the flexibility of having it in our name. It's there for us if we really need it but otherwise it will go to them.

I think what underlies the much of the MSE expert stuff is the assumption that people will spend all the money they have unless they hide it away from themselves. Whereas I don't think it mattesr how much a month you transfer to a specified savings account for a specfied purpose, it is your income and expenses that determine how much money you have.

Absolutely not in their name, but otherwise yes.

The most hardworking reliable 15yo can get caught up in drugs / unsuitable partner or whatever. You just don't know, however well you bring them up.

I will probably do it for small money when I are a bit older. I had a children's account with a few hundred quid in and used to enjoy going to the bank and checking my interest and learning if I put my birthday money in, I could get even more interest. It definitely shaped my attitude to saving. May have to go for higher risk investments at today's rates though.

We paid via direct debit every month into two DS accounts since birth. DC1 just turned 18 and has about £10k in there. No-one else has contributed. He's moved it over from JISA into Premium Bonds and adds to it with about 1/3 salary from pt job each month with no plans to touch it in the near future.
He also has several hundred in his bank account from the rest of his earnings/birthday monies etc which he can do as he wants with.
GP have put money aside for uni fees.

Gosh no, I wish I could but I can barely afford our present!

No.

I save for myself and my future, in my name.
It might be that in the future I will use some of my savings to assist them (uni costs, house deposit, etc). It will depend on my personal situation at the time.

They have some savings, from small inheritances, Christmas & Birthday money etc. And CTF's which my mum puts £25pm in for each of them (ds1's has now matured).

yes into pensions as I don't know whether their generation will have state pensions

Yes, but not a lot. £30 a month since birth. Now 18 they have about 10k.

We saved for ourselves and all our savings were always in our name. The kids had small savings accounts from birthday/christmas gifts but nothing major. Grandparents gave each of them a large-ish sum at age 18 (I wouldn't have done it myself at that age) and luckily they each agreed to invest it.

We've used our savings for university fees for them and I might be open to helping them get started with buying a home at some point ... maybe.

Yes, been savings since they were born as a university/house fund for the pair of them. I realised we'd have two going to uni potentially at the same time.

We are average UK salary earners, although our joint income was under 25k for a while but we managed to save bits and they have about £7-8k each at 14, although one of the accounts took a hit recently (we put one account in stocks and shares account and one in a savings account).

We saved tax credits, what it would cost for nursery each (we have 3 dc) and cb.
They each got a small house.

Yes. We put money away in DDs account every month. Much more important to me than leasing brand new cars!

I'm saving £50pm for DS. I wanted to do it from birth but I wasn't in the financial position to be able to until recently. I'm currently topping up his savings to include all of the months I've missed so far. If any other DC come along then I'll put £50pm away for them too

We save £100 a month into stocks and shares for DD. I'm hopeful she'll be able to use it for a house deposit one day. She won't know about it until she's old enough to do something sensible with it (I was one of those stupid 18 year olds who spent all mine - in my case it all went on casettes).