Child Savings

[Puddinggulper]

Hi all,

I wanted to ask people’s advice/experience with child savings. DH and I want to start saving money for our DD for when she reaches adulthood to help with University/Travel/Car/House Deposit etc - though I highly doubt we’ll manage to save enough to cover much of that but we want to do what we can.

I know there are junior ISAs and savings accounts for children. But I don’t like the idea that she’ll have free access and total control over the money at age 18. In my view that’s too young to be financially responsible. I know my DH at that age would have spent it all on drinks for his friends on nights out and I probably would have splurged on clothes for example! Is it simpler to just open a new joint savings account in our own names and earmark that money for her and distribute it as and when needed, for instance some for Uni and hold some back for later?

Do you each have ISA's in your own names already?
If not, I would just save in those, until she is mature enough to take responsibility for the savings. Either a high rate account, or if she's 10 or younger, consider a stocks and shares investment ISA with very low fees, depending on your attitude to risk.
As inflation is high at the moment, I would discount Premium Bonds as an option. Unless you have a win, the value of the bonds is falling in real terms every year.

I’ve always given my kids some degree of financial freedom in the sense that they’ve always had access to petty cash in the house and they get paid for chores. They have had slip ups but mostly they are sensible. One DC has just passed their driving test and we offered to buy them a car but they would have to pay something towards it. They looked at the pros and cons and decided it doesn’t make financial sense as they are going to Uni in September anyway. I invested some of their birthdays and Christmas money into the CTF and they will have access to about 6k when they are 18. I see this as their money. Me and DH never had access to any money when we were growing up and I think that has influenced our decision to try and give our own children some capital to manage from an early age as we feel this would have helped us manage our own money much better. It’s very personal to you and your husbands attitude to finances so I think whatever you decide between you will be right for you I just think some financial responsibility is the only way you learn.

I’ve got a S&S isa in my name for any savings I’d like to use ‘for’ something for DD and a junior ISA I use to save any money she is given, for the moment, plus any bits & bobs I get from things like cashback sites, selling on eBay etc (she’s only 2) and she can spend that on anything she wishes when she turns 18.