How much to have in savings for your child at 18?

[Pineapples198]

I was lucky enough that my parents set up a cash ISA for me as a child and this was given to me at 18 with around £3k in it, this helped with a house deposit (our deposit was £8900 for our first house).

My husband and I have 2 children and they both have a cash ISA too. Realistically what amount should I be aiming for to give them at 18?
It’s on track to be at around £10k currently if we keep paying in at current rates.
I feel like that isn’t going to go far for a house deposit or something in the current climate. It would buy them a car.
what are other people planning on having saved for their children?

These threads always make me think 'oh shit I need to set something up' and then promptly forget until the next thread 😛For reference DS is 4 and has something like 34p in his Go Henry savings pot (couple of pound in the main account but can't see that lasting til the end of the week)

DMum has been saving £50/month for DS since he was born, so he'll have around £10-11k when he turns 18. He can spend it on what he likes ultimately, but we'll encourage him not to spend the entire amount frivolously. I think it's unfair to suggest that all 18 year olds are irresponsible with money though; both DH and I (with guidance) were good savers by that age.

Apart from that, we have a rental property that should be mortgage free by the time DS is 18, which we plan to use the income from to cover any money he needs whilst at uni and ultimately beyond. The property will stay in our name, though.

We had a horrible realization moving to USA with teens that we needed this kind on money rather than the 20k I'd carefully saved in the CTF.
We are going to make it but it is a different level of investment in your dc.

We gave 18 year old DS the proceeds of a small policy we'd been paying into (around £2500) He also had around £1000 his grandparents had invested.
He had a very 'good' first year at Uni - drinking and partying! He had nothing left to show for it.

Do not give your 18 year olds large cash sums unless you are happy for them to spend it on absolutely anything!

We gave ds(20), his £30k we saved for him since he was a baby, with some help from a couple of very small inheritences, when he turned 18. We also paid for his driving lessons and first runaround which thankfully started just as covid lockdowns lifted and prices went super crazy (24 x £25 = £650, car = £5k, first two years insurance £1k + £700).

It is all a hell of a lot of money for us and he is fortunate we only had one dc or it would be much less!

He is very boringly feeding it into a LISA at £4k a year for a house deposit with the balance in Premium Bonds. He is able to do this as first choice uni was local, so commuting (free) for first 3 years and plans to move out for 4th/5th year. He manages to support a decent enough social life, holiday, and car insurance by working PT (wont take a maintence loan until 4th/5th year).

Mine had £10k each towards university, essential as they only got the minimum loan. Made things a lot easier

@Ponderingwindow

I knew it was expected in the USA but I thought they got federal assistance and fees were often lower than here at state universities. Has it changed a lot, I read that fees were increasing

Nothing, we had savings in our name and he had £10k towards university, we may or may not help with house deposit, it depends on circumstances. You have to be careful, your little darling could end up not being such a darling with access to lots of free cash to do what they want with at 18

DC will each have around £20k each ; but it will be fed into a LISA, I’ve already told them while it may be legally theirs, the expectation is it will be invested in another financial product straight away. We’ve stopped paying into it, however, as the risk is that it’s legally theirs and they might just run off with it!

Other friends have paid in the max amount every year for their dc since birth and therefore have hundreds of thousands in their name. We didn’t have the spare cash to do that.

It depends on your income. Our child will not qualify for federal loans or sliding scale tuition at most schools. If she decides to attend our state university, we won’t need all the money, but I don’t think it’s the best choice for her.

tuition at our state university is 15k a year at this point. So quite cheap, but still need to pay living expenses on top of that.

Have you seen the cost of insurance lately?? 😱

I don't like the idea of giving an 18 year old a large amount of money. Sure some will be sensible with it but unlikely that most would. My DD will get 50k thanks to an inheritance and it really worries me that she'll just use it up over the next few years rather than using it for a house deposit or something similarly sensible, because of course at 18 she's not going to be ready to buy a house (or have the kind of income that would secure a mortgage). And then DS will have nothing which feels even worse because of the unfairness but I can't afford to save 50k for him to even things out.

We are in a fortunate position that we can save £100 a month for our DD, which we started a few months after birth. This is saved in a S&S ISA in my name. She's 4 now and has just over 7k thanks to stock market returns. With just contributions, it should be around 21k saved but hopefully with additional returns it will be higher.

Saving just in my name as don't want to give a substantial amount to our DD at 18! Means we can also control how much she gets and when- happy to help out with uni, car, house deposits etc but not a piss up in the pub!

I have 2 sons, older one has about 3k saved (he's 6) and the 3 year old has around 1.5k. This is money they get/got for being born lol, bday and Xmas etc and as we are low/average earners (more low) we aim to add around £20 each a month for them.. but they are getting it at a sensible age certainly not 18. So whenever I feel they are sensible enough not to blow it all

10k is a lot better than nothing, and at 18 it can be (as you say) used towards a car or university living costs or similar. Not all 18yos would blow it, and many who are planning on uni would use it for sensible things.

Equally, whilst it wouldn't be a full house deposit in most parts of the country, it will be a big help if they want to save it for that.

I wouldn't just hand it over at 18, but would be clear that it's for something that will make a significant difference to their future.

It might be that later on you can afford to add to it, or maybe they will get some inheritance or gifts you can add to it too, but ultimately anything you can give them or have for things they need is better than having nothing (which is the case for plenty of young people)!

We’re aiming for enough for a reasonable amount towards a house deposit each, so around £30k each. We also have a separate account in our names which has savings in for university, weddings and driving lessons. They are only toddler/baby at the minute so only got a few k each saved so far though.

We didn't save but have paid off our mortgage so will help with a property. They will pay half the mortgage on a small flat and eventually we will sign it over to them. We intend to do this with all our DC.

Some lucky kids out there
These threads really do show how different all our lives are. I don't have anything saved for my kids. They will have to get jobs and fund themselves. I've fed them, clothed them, kept a roof over their heads, and give them the best I can. I'm just happy to make it through the month with everything paid. There is nothing left to save.

£100 a month into regular savers for 2 kids - these deposit annually into children's savings accounts, not ISAs (no way am I risking that), although 6k each of that is currently held in premium bonds.

All being well with wins & interest they'll have about 22k each by 18.

@Overthebow how do u know they'll be enough for a house deposit in 10 years or so. They might need a much bigger amount

I don’t, but we probably won’t be able to save loads more for the DC unless we sacrifice our own retirement savings or get much higher salaries or inherit so that’s the rough amount it will be. I’m hoping it will be enough to at least go a decent way towards helping with the deposits.

We saved nothing in their name. We had about 30k in our own ISA's which we were then able to use to help towards our uni parental contribution. Ds also had about £500 in his child trust fund. We bought dd her first car and have a similar amount earmarked for ds's first car.

If anything happens to me then I have willed them £10k each from my ISA but that may end up being used before that if we decided to help with a house deposit.

Looking ahead is great but as someone whose youngest child is 18 you have to understand that any money in their name is theirs to spend as and how they want which is why we never saved money specifically for the children. We had a couple of savings accounts with the hope that we would be able to fund some things in later life. The hardest thing for them will be getting on the property ladder. Ds1 started moving his money into a LISA when he turned 18 but we knew he was sensible unlike a lot of his friends. Lots of threads on here of first year uni students living it large burning through their money.

Due to household income (£62k or more) Ds only gets the minimum maintenance loan for uni ie the loan that gives them money to spend on their accommodation and food etc. To give you some figures, minimum loan for living away from home and outside of London is £4767, expected parental contribution is £5460 per year per child. This equates to the maximum loan given to those households on less than £25k. As I have 2 children, based on that figure for September 2024 I have to fork £32,760 just to support them at uni. You might need to consider savings to cover things like that. We saved for that so it doesn't touch our monthly income.

Remember as children get bigger they cost more, they eat more, clothing is more expensive as they hit adult sized clothing in secondary school, school uniform costs more at secondary, no more £4 jumpers, more like £18 per jumper. Driving lessons were £1k, car insurance for Ds1 on my car is £1.2k it would be more if he had his own car but he has nowhere to park it at uni either on campus or where he lives.

So my advice is save with them in mind but honestly do not hand over all the monies saved by you, grandparents etc at18 because it might end in tears.

I got given 20k at 18 from an inheritance. It was suppose to be in the fund until 21, however my mother made the decision to give it to me several years early as she thought I was very sensible……

by 20, it was gone.

10k sounds good now, but as you said, popably only would help them to get a car in 10 or more years' time.
Depends on when you want to give it to them.

I am hoping to save up 20k for each child by the time they are 18 and keep putting money in as I will not give them when they are 18. They can have it later on for house deposit or something that I know it will be beneficial for them.