Is it wrong to use Children's savings...

amberspyglass

Hi there,

Many thanks for all your varied responses

The children's savings are not in a trust fund. They are in bank accounts and are monies gifted to them for birthdays, xmas etc from my side of the family, mostly from my mum and a small inheritance from my Grandpa who died earlier this year.

I haven't yet discussed my thoughts with my mum yet, we have a close relationship and I truly believe she will support me in whatever decision I make. She too was a single parent and brought up 3 of us on her own. I agree with your point Scrandas that ''If your kids where adults they'd beg you to use the money''. I know I would have supported my mum had she the option to do the same thing. Thanks for your support, it's going to be a scary road ahead, and things are still raw but it's for the best.

JohnRo, yes the children are wholly dependant on me - ages 5 and 2 and I agree about being pragmatic, I need to keep a roof over our heads.

Gadfium, I have thought about selling my property and I have looked into it. It's an expensive option because the rules have changed when it comes to solicitors fees etc. Everything now has to be paid upfront and it would cost me about £1000 to get my flat onto the market so I would have to find that money from somewhere too... Property prices are rising in the area where my flat is and it's not a big mortgage, about £25,000 so if I can afford it I'd rather keep it. I plan to sell it when the mortgage is paid off and the children will still only be in high school and I plan to repay their savings too. The rental income is sufficient enough cover basic maintainance. The reason for taking out the loan in the first place was because the flat needed gutted after a previous tenant left it in an awful state. I had to redecorate in order to let it again. The good thing was that after redecorating I increased the rent and it was let in a matter of days and the same tenant is still there 3 years later (and he looks after it well!).

Xylophone, I have never heard of the "£100 rule", can you explain what this is?

I'm still in two minds but I have to make a decision quickly...

Many thanks again

jackieblack

I think it would be wrong.
The money has been given as gifts to your children, not given to you to do whatever you like with it.
Your children are not responsible for the taking out of nor the repayment of your loans.

xylophone

The children's savings are not in a trust fund. They are in bank accounts and are monies gifted to them for birthdays, xmas etc from my side of the family, mostly from my mum and a small inheritance from my Grandpa who died earlier this year.

The inheritance should certainly have been held in bare trust for your children until the age of 18 (16 in Scotland) - you have no legal right to use this money for your own purposes.

With regard to the other money, this belongs absolutely to your children - with regard to the bank accounts, how are these held? http://www.candidmoney.com/askjustin/809/difference-between-designated-accounts-and-bare-trusts

As the funds were an absolute gift to your children they should be in accounts in their own names even if you are named as the adult on the account.

With regard to the "£100 rule" (which does not apply to tax privileged accounts like JISA/CTF), see http://bank.virginmoney.com/savings/learn/childrens-accounts/

Any

Was the inheritance direct to them, or to you and you put it away for them?
Because if it was direct to them then you cannot touch that money to pay your loan off. You would be on one hell of a slippery slope.
The money should have been safely tucked away and making more money to your best ability (ie best savings account/investment), paying YOUR loan off does not qualify as that.

waiax73

When I first started reading this, my reaction was 'NO' but after reading through your post I also think your better of taking it and then rebuilding it than wasting money on loan fees....

Good Luck

bjaich

When I was a teenager I had saved money in my own saving account.

My father did asked me for the money as he was in a similar situation and wanted to repay debts and of course he promised to pay me back in time. Unfortunately he never did… and it left a bad feeling.

Also at the time it worried me a lot to think my parents had money problems, and I personally do not think it is not something a child should have to worry about. I also think that taking money from children shows a very bad example in regards to managing your money.

But those are my personal experiences and feelings everyone is different.

JohnRo

How on Earth can it be wrong to use this money in the short term to make a better life for all concerned and then restore the accounts long term when the financial situation is much improved.

It's not like the kids will need it short term, or could do anything with it other than waste it anyway. When they're old enough to use it responsibly they'll be old enough to understand why it was used in this way.

I agree it's less than an ideal situation and I agree with the slippery slope comments but if the money has no legal title with the kids why would anyone not use it responsibly to better their lives now. The last thing they need is a bank account worth £3K and a distressed single parent.

You're talking about a 15-20 year horizon when this money is going to be available to them. That's plenty time to turn things around, sure the road to hell is paved with good intentions and all that but you have to make tough choices at times.

All that said there's a few alarm bells ringing, taking on £10K worth of loans in 3 years at very high interest for frivolous spending and then being unsure what you still owe doesn't bode well.. sounds like you'll need to get your priorities sorted big time if you're going to turn things around.

Haven't you explored 0% credit card or low interest loan options?

Archergirl

Oh for goodness sake, borrow their money, pay them back later when you can, it's common sense surely.

amberspyglass

Hi Everyone,

The kids have their own Nationwide savings accounts in their own names and I'm the named adult on both accounts. All money in their accounts of course belong to them, however I don't understand what ''slippery slope'' this will lead me down if I feel I have no option but to borrow it until I can pay it back, which I will when I sell my property in the future.

I took out £5,500 and I believe I have about £3,000 outstanding but would have to phone them to get the final exact figure. I actually take offence to your comment JohnRo, that it was for ''frivolous'' spending. I was investing in our future by ensuring the flat was in good repair in order to get a tenant to move in and therefore receive a rental income. I have a good credit rating and I like to think I am sensible with money, I budget and can account for every penny. Apart from my mortgage this is the only debt I have.

I agree that my children are not responsible for paying off my loan but I am responsible for my children and keeping us fed, housed and clothed. If we were made homeless tomorrow, would it be wrong to want to use their £3,000 to rebuild our lives or should I do the ''right'' thing and not touch it because it doesn't belong to me...

:):)

gasmanmartin

Archergirl wrote: »

Oh for goodness sake, borrow their money, pay them back later when you can, it's common sense surely.

Agreed! Go for it