How much are you putting away for your children?

[Pinkdreams]

I have a 10 month old, I've recently opened an NS&I account and have started depositing small amounts in here, my plan is to continue to do this every month and then give it to my daughter when she's older. At the minute I can only afford to put £50 a month, which would work out around £10,000 when she is 18 (probably won't give it her until she's older), this got me thinking, besides inheritance, how much if anything are you planning to give your DC's when they're older to purchase a house etc.

Can't you put away those CB?

We didn’t but have supported them with education including university fees, tutoring, etc. We had other commitments at the time and didn’t get ourselves organised; however many 18 years old will waste it.

Better to save for university fees, house deposit, pension, etc.

DD1 didn’t hate us but wasn’t too impressed we didn’t save for her; however we have helped her with lots of other stuff. We gave her 1k to compensate for it.

It's tough out there, and sometimes money isn't available. I started too late, initially £25pm, so didn't benefit from compound interest much. We started JISAs during covid. Hope to be able to give them DCs £12k each at 18.

@Gaz1978 everybody's circumstances are different. Saving for your DC is a luxury tbh. If you can its nice. If you can't I wouldn't hold it against my parents. Your DC are old enough to understand.

@Happyturtlelife I wouldn’t have been very impressed with my dc’s attitude if they thought we should have delivered them a lump sum. My kids expect nothing.

We are well off - we have not saved for our DCs specifically, we haven’t decided how much they’ll get yet. They are living at home after uni, saving a good chunk of their salaries, not going crazy with the spends. Learning to budget, feeling the rewards of saving.

We are supporting them to get there by allowing them to live rent free but we are very conscious of allowing and encouraging them to feel like it’s them putting the money in their bank accounts not us. I want them to practice being a grown up whilst it’s safe to get things wrong with their budgeting.

We have used our money to provide for as they grew up - giving them a comfortable life, good education and experiences but we have also had access to our entire savings to make decisions, to take a risk and build our own business, it would have made no financial sense to lock away money that could have saved the roof over our heads had the business gone wrong - impacting the entire family so we could hand them a big nest egg at 18

We will most likely pay off their student loan and give them a big leg up with property - but we’ll wait till they’ve been saving for a while and developed good habits before telling them. I know it’s not the normal way to do it on MN, but habits and self dicipline with money are important and there was no way I was handing them a nest egg at 18 when I had no idea what kind of spenders they would be. We’ll deliver the big smile when the time is right.

£2880 into his children’s pension each year. The govt top it up with 20% basic rate tax relief so it ends up being £3600. He has about £20,000 in there now. Hopefully we’ll
be able to support him with Uni/property ladder when he’s older. I wouldn’t want him to be given a lump sum at 18 or 21 to go wild with - which is what I would have done at that age!

Thank you for sharing this. I feel absolutely terrible reading some of these replies as feel like I am letting my kids down so badly!!

I can't believe the amounts of money some people are putting away each month.

Forgot to mention but yeah, I am in my overdraft all the time, too. I basically rely on it every month and factor it into my finances.

Can't work more hours; already at the point where I miss assemblies, volunteering on school trips, the up-coming Harvest Festival...

@SkinCareExpertxx putting money into savings in your kids names when you are skint is not only not wise it would be stupid so don't worry, your first priorities as you know are trying not to be in overdraft then building emergency savings for the household then contributing to a pension so you won't be relying on your kids when 70, in your situation keep any savings in your name as if your car breaks down you don't want to be putting it on credit because all your spare £££ are in kids savings accounts

Instead of cash savings you really should be putting the money into stocks and shares. You have an 18+ year horizon before the money will be given to her so to maximise the potential growth you should be taking some risk and investing in a global track fund .
You can open an ISA on her name, although it becomes hers at 18 or in your name and keep it for her. Either way, make sure it's in an ISA to avoid capital gains tax, income tax and dividend tax

DH and I never had any money from family, so we’re trying to put away what we can. Hopefully to help our DC with a deposit for a house, but it isn’t much, just whatever we have left over.

We never saved for our children but we paid for first cars ,driving lessons and weekly allowance when at Uni .

Hi @SkinCareExpertxx . Really don’t worry. Giving your children a secure home with love is the best parenting that anyone can do for their children. Genuinely don’t think that the majority of parents are in a position financially to save for anything.X

I saved minimal amounts when DC was small. The CB was used to subsidise my part time earnings. I have found relatively small top ups make the most difference and don’t dull ambition or self reliance: top up of student loan so no term time working and enough to have fun and travel, paying for driving lessons, help towards cost of wedding, help towards paying off student loan, some money towards deposit to buy a property, money towards holidays.

100% this!

I don't save anything in their names. I just have an isa with money locked away so I can't spend it. It is probably for uni fees, but wouldn't have to be as it is in my name. I also have a high interest savings account in my name which I just put £20 a month in. I am aiming to give them around £2k each at 18, for a car or travelling or whatever they think they need. If the account ever gets over the amount I have in mind then I can use that money for general family costs.

My 18 year old will have about £6-7k at 18 plus a car

so will his siblings

not much but more than if got from my parents which was a big fat zero

Exactly how we're doing it, although with smaller amounts I imagine.

I know a few kids happy to live off their nest eggs while they evaluate what to do next as they have no requirement to work - I want mine to understand the value of money and get out there and earn it!

When my DC were young I had 3 DC and couldn't afford to save anything for them. As they got older I helped with deposits. When your DC leave uni and you no longer have those enormous cost to cover likely at around th same tome you finish paying your mortgage you will have so much more disposable income. That's when I saved. Don't worry if you can't putuch away now, as your mortgage comes towards its end you will be able to afford more. I used to feel so bad when DC were young and I just never had any spare cash.

DDs are 9 and 7. The only savings in their name are their standard bank accounts where we save half of any money they get given for birthdays/Christmas and we put £25 per month into a pension for each of them so that's in their names too.

Additionally we pay £150 a month into a Stocks and Shares ISA in my name which is earmarked to be shared between DDs when they need help with house deposits.

So £100 a month saved per child but most of it in my name rather than theirs.

I couldn’t afford to save a penny when my DC were growing up. 😕 We haven’t had the benefit of inherited wealth or highly paid jobs.

(Just to balance out the privilege on this thread a bit).

Wow so many people doing so well with savings!

We opened a stocks and shares savings account for each DC when they turned 1 and deposited £5k in there. They also have a SIPP each which we put the max into when we opened it. I was kinda hoping compound interest would be my friend but this thread is making me rethink.

Find a good investment fund. We did £50 a month and it was worth 40k when they turned 18

I’ve been thinking about the 3 biggest pots to save for on their behalf Pension vs Student finance vs house deposit. Like everyone we don’t have unlimited funds to help with everything.

Which one to focus on -

The student loan will be a drag on their finances most of their lives, However AI suggests that my kids who graduated June 25 would need to be on a salary of £50k a year or very close to it atm to consider that paying it off in a lump sum as a prudent move. Not to mention dd may step out of the workforce for a few years to have kids. So apart from saving for the parental contribution - this doesn’t feel like the area to focus on.

Pension - I think we all understand the benefits of compounding and tax advantage of putting away money for their pensions starting at a very young age but I feel there are 2 problems with this - it’s loed away for such a long time so in the event of an emergency that money can’t be accessible and secondly timing is not great - when they retire it’s likelly we’ll be dying - they’ll be receiving a massive leg up in the form of an inheritance and so it’s not the time they’ll really need more money in the form of a pension from us.

So I’m thinking contributing to the deposit wins it will give them more freedom to make choices and improve their quality of life when they need it. Choices and options with money has value and that is maximised with the deposit - it feels like this is the best place to focus the help - although again, I wouldn’t be saving it in their name - they’d get the money when they needed it for the deposit not when they reached 18.

Anyone else have any thoughts on this?

Coming back to this thread because the "they get it all at 18" worry keeps coming up. Something that's worked for families I know: from about 13-14, show them the JISA statement once a year. Not the exact figure if you'd rather not, but how it's grown and why. Then at 16, when they can legally take over managing it, sit down together and agree a plan for what it's for. By 18 it isn't a surprise windfall, it's something they've watched and planned for. The kids who blow it tend to be the ones who didn't know it existed.