Managing Child Savings - Potential JISA Regret

[CheerfulBramble]

Hi there,

I'm trying to manage my kids finances, and would appreciate some input.

DC1 (13) was given money when they were born, so I opened a Junior ISA for them, and since then I've paid into it monthly. When DC2 (9) was born, I also opened a JISA for them and paid in monthly into that too.

At the time of opening the accounts, I liked the fact that all the money would be locked away until they turn 18. Until now that it is. It turns out DC1 is not a saver, and any money burns a hole in their pocket. I'm trying really hard to help them understand money and it's worth, and I appreciate there is some time until they are 18 and a lot could change, but I do really worry about them having access to a decent sum of money at the age of 18.

In an ideal world I'd take the money out of the JISA, but I can't do that as per JISA rules. Instead I'm thinking about pausing paying into DC1s JISA, and opening a savings account in my name instead and paying what I pay into the JISA into there. The idea being that DC1 will get access to some money at 18, and then can get the rest when they are a bit older (potentially 21 or 25 - whenever we decide) - minimising the risk of them blowing all their money.

I'd continue paying into DC2s JISA until they turn 13 so they will have an equal amount in their JISAs. At that point, I'll switch to paying DC2s money into a savings account, so they also get the same as DC1 at the age we decide to give it to them.

Does this sound like a good idea? Or is there something I could do better? Or should I just keep paying into the JISA and hope with some guidance from us that they will be sensible with it?

Stop paying into JISA you won't be able to dictate what they do with the ££

You could be taxed on the interest if you pay enough in.

Alternate would be an ISA or premium bonds, or even pay onto your pension and hope the 25% lump sum allowance doesn't get removed.
I think you can also start a pension for your child. That money would be locked away for a long time.

Stop any /all money going into JISA

You have 2 good options imo

1. Open an ISA in your name if you are not using your full ISA allowance of 20k per annum. You will retain full control and can give them financial help as appropriate/ needed

Anything over the 20k you could put in premium bonds but I think they are a bit of a gimmick tbh

2.Put it in a J SIPP It's a child pension (note you will never be able to access this again once paid in) but he wont ve able to get at it until he is 60+ and it will help his financial security

You cannot legislate for life... which is why only kids Xmas and birthday money goes in their ISAs. You just xant know what an 18yo is going to do with 20/50/150 thousand pounds

Thank you @Lafufufu, @Rollercoaster1920, @cestlavielife - wish I'd never opened the JISAs! Think Premium Bonds in kids names are even worse though, as kids get full control at 16.

I don't want to lock the money away for their pension - ideally the money would be used to help fund a deposit for a property. But yes, think the ISA in my name might be the best way forward - I'm not using my full allowance.

Should I keep going with contributions to DC2's ISA so that they have equal amounts at 18, or just tell them when they are 18 they will get the same at what their sibling gets at an appropriate age?

I didn't want DS to get access to the money when he turned 18 so I set up a stocks and shares ISA in my name. I will give it to him when he is ready to buy a house which will presumably be some time in his 20s.

I'd stop all contributions and even it up at 18

Ie. Ds 1 has 15k in his isa at 18
At 18 DS2 has 11k - you would "give" 4k from your isa savings towards buying a car etc.

Its better this way because it gives you more influence / leverage over ds2.

For ds 1 you can still control the money somewhat by saying something like... i will pound for pound match a deposit for a house (or whatever) up to 30k - so if you smash the 15k up the wall you wont get anything but if you leave it untouched ill double it etc

In the meantime work extra hard teaching them both money skills,!!!

I did the same, took two JISAs out for my daughter’s when they were born and paid all family gifted money into them as well as our own savings for them. About two years in I realised it might not be ideal for them to have huge pots in their own name at a young age, so we decided to stop paying in when their pots got to 3k each. Now about 8 years later they have about £3760 after interest has been added and should be a nice amount towards their first car/insurance/whatever. We’ve got other ISAs in our own name for their future.

The other way to do it is to be very clear about its purpose so be clear that it is to be invested in an adult ISA on turning 18 and keeping it for a deposit and proving this to you on a regular basis. If they do that, you will continue to help with regular savings. Failure is not an option and will result in you never helping financially again though you will always love them.

Most kids want to please their parents. You can also say that you expect them to do the same for their own kids assuming they can afford it.

You are absolutely doing the right thing in educating them. This money is something you have worked hard for and you expect them to ring fence it and keep it solely for its intended purpose.