How much to put in children's ISA accounts or keep control over.

[Waitingforthetimetopass]

There is some money that we know will be coming from an inheritance. We will use a chunk to pay off our mortgage. The rest will be invested and that will be discussed with professionals.

The bit I am unsure and wanted to ask others experience and thoughts on is that we will put some in ISA'S in our children's names. Ideally I want to try and save over 100k each by the time they are 18. However, I am not sure if it's a good idea that they get access to the whole lot with no strings on their 18th birthday. Is it better to have some just as family savings but mentally tagged as uni expenses/ first house deposit for each child.

We might be able to afford this after the mortgage is paid off. At the moment, not a chance.

I am probably overthinking but like most parents I want the best for DC and ideally that includes no student debt and a start for a house. I would love to do a SIPP too but that will massively depend on how finances pan out.

It's very much frowned upon here (as you can see on this thread) but I maxed out a JISA for DS for quite a few years. He was aware of it, and was also aware that it was to pay for his uni fees. The compound interest was fantastic and both DS and I enjoyed see how much extra was being added to the pot without us needing to do anything.

He obvious got access to it at 18 (well over £60k), when he put the majority of it into another ISA and high interest accounts, and used the rest to pay for his 1st year of uni. He's about to start his 3rd year, and will leave with no debt - and is ridiculously grateful to me for doing that for him.

I appreciate not all kids are sensible, but I knew he wouldn't blow it stupidly as he's autistic and loves 'rules'... So uni money was always going to be uni money and nothing else.

Thank you. I suppose I am wavering between trusting that with sensible conversations and guidance believing it will be fine and knowing that not all 18 year olds are sensible.

I just can't really imagine what the little children now will be like then.

Really good to hear from someone it worked for.

Are your own isas maxed out?

Not currently. We will max them out when we receive the inheritance.

Sorry I this is a silly question. Is there a trust that you can save in for your kids till 21? Or do you mean you would just save and give them the money in their 20s?

I'd just do bed and isa and keep all assets in your name.

If you arent going to need to use the money look at VCTs

I would be starting a junior ISA and a junior SIPP for them.

I would make them fully aware of the existence of them both and have regular reviews of how they are doing, so they learn the power of compound interest.

Keep reminding them that they will have full control of the ISAs when they are 18 and if the money gets blown on rubbish, it's gone for good. If that happens, I'd be blowing their inheritance on cruises or whatever you like doing.

The SIPPs should provide a reasonably comfortable old age.

Thanks I will look but mostly my IFA will handle the investing side. DH and I just need to make the choices about how much to put in children's names.

I am thinking of this. I suppose I am questioning how I balance it. To max both SIPP and JISA each year for each child is more than 23k a year. Certainly I could do this for a number of years until the inheritance is used up. Continuing to put that much aside every year after that could be tricky. Something definitely but sadly I am not in the position of saving quite that well

Good luck with trying to keep JISAs/Premium Bonds secret from your children. Your access will be switched off when the kids turn 16/18.

They will then need to be linked to a bank account in your child’s name that will be verified as well as a phone number for a security code.

I believe NS&I even demanded to speak to the child before allowing them access.

I wasn't thinking of keeping them secret thanks. I prefer the discuss st length including purpose approach

I would open a joint savings account so that the money you want to save for them has their name on it and is separate from your own adult savings account. That way you have the control when they are children and you can decide at what point they are sensible enough for you to hand it over.
You could agree together some extras .. like help with a car or teen holidays so there is some fun element but keep hold of the bulk until you feel is the right time
No way would I save in such a way that an eighteen year old is potentially getting access to £100000. This is a once in a life time opportunity. When it's gone it's gone and tbh I can't think of one eighteen year old I know or have known who would deal sensibly to feel rein of £100000 ...better safe than sorry 🤔😃

Definitely once in a lifetime. I will be trying hard to save for my children's future and have set myself big goals. I couldn't come close later.

My response was obviously to the ones who said they would keep them secret

Thats fine. I was just clarifying.

imo it’s important to teach children about money, how to mange it, financial goals, how to budget etc. When ds was in sixth form (over 10 years ago) we gave him £250 per month to mange and pay for his travel, lunch, going out with friends, gifts for friends etc.. He also managed all his money at university. He inherited over £400k when he was 22 and has it all invested- no advice required and researched everything himself.

Thank you for this. I am trying to teach responsibility with money but DC are very young atm.

My 2 year old has £8k in a S&S JISA that my parents gave him when he was born with the intention that it will be spent on a gap year, driving lessons, essentially fun stuff and extras.
They are also paying into an an account in my name so that he will have a house deposit and we are saving money towards uni. My mum has said that she wants him to not just be given it (I expect it will be c£150k when he gets to an age to buy a house) but that it needs to be used to “match” what he saves. It doesn’t need to be 1:1 maybe 5:1 but she doesn’t want him just to be handed the money at 21 to buy a house with no concept of saving. She’s seen too many kids fritter away thousands of pounds, or not learn the habit of saving. As a scare story, a colleagues DS inherited £55k, went to uni spent the whole lot in first term on eating out, drinking and drugs (treating “friends”), failed the year, colleague scraped the money for him to redo the first year and he failed second time too. He’s no prospect of having that sort of sum again.

Yeah. I went to uni with a few people who had no concept of the value of money. One racked up 10k in the first month! She lived in catered halls and had her fees paid separately. That was just on her 'spending credit card' which Daddy had given her.

I am trying to bring up sensible, well adjusted children who understand how much I am trying to give them. So far the eldest is 3 so can't really say that she is getting the concept of money or saving yet.

We save £100 per month in a JISA for DS. He’s only a toddler now. We also plan to encourage him to save in there, and we’ll do a ‘matching’ policy where if he saves birthday or pocket money in there, we’ll match it for him. He’ll have that at 18 and we’ll
encourage him to be responsible with it. I think it’s important that he has the trust and responsibility with money, and hopefully he’ll have learnt about how to deal with finances sensibly from DH and I.

But most of the money we have earmarked for him is staying in our names. As much as I’d like to hope he’ll be sensible, he might not be and while I think it’s important that he learns to deal with money himself, if that learning involves huge mistakes then at least it won’t be at the expense of all the money we ant to give to help him financially frittered away.

Thanks. Very interesting to hear different prospectives on how to balance this.
Its hard because I want to believe in my child growing up to be a sensible, mature adult. But will it be when they are 18?

There is regular communication from the ISA providers. The envelopes are always marked and it’s easy to tell who they’re from and tbh they weren’t that interested. We told the children that we were saving money for them (true) for future house purchases. They were happy to sign any paperwork that needed to be signed and none of them ever asked to see details nor want to know what sum was involved.

I think different children. Tiny atm but the most curious, interested in absolutely everything child going. I didn't expect to be explaining quantum physics yet but...

Ive got a bare trust for each of my dc in my aj bell account. In my name but for the benefit of each child who is named on the account. I have control of it & only gave them money from it for things such as a car etc (neither of mine went to uni thankfully!).

They have grown so much in value that even though I have had to pay some cgt its been well worth it.

2 of my dc are adults & I wouldnt have trusted either of them with this money at 18 & even now several years on they will only get the rest for a house deposit. Several of their friends blew their entire CTF that their parents had contributed to for years on ansolute shit so I was extra pleased that we never contributed to theirs - all our savings went into their bare trust.

I suggest you look into a bare trust as its worked out really well for us.