Are you saving for your child?

Rob_192

atush wrote: »

I saved into an investment trust savings plan for my 3 boys. Not to give them a Lump sum, but to pay for university expenses.

they all 3 went, not 100% sure what I would have done had one not gone. Maybe given them half to pay for a car for work (although they all 3 share one now so they do have one.

Otherwise, I would have kept the money and gifted it later in life like for a house deposit. cant say I would have given them the cash and just 'hoped' they would use it for something sensible.

Atush

We also saved a 'University' fund for our 3 boys. The eldest went to medical school and has managed to avoid spending very little of it during his first 4 years, but it has now allowed him to opt to do an intercalated degree this year which he could otherwise not have afforded as he is not able to get loan finance. He will then use the balance to pay for his elective next year, so money wisely spent.

Our middle son opted not to go the Uni and did an apprenticeship instead, so we said he couldn't touch the money unless it was for something useful, so earlier this year he bought a flat and used it for the deposit. Interestingly he is the only one of his fellow apprentices able to buy a property, because despite all earning the same, none of the others can afford a deposit.

Third son isn't yet sure if he wants to go to Uni, but if not, another deposit might be just the thing.

R

maria3104

I am doing my Grandson a pension. I hope the twin effects of compounding and the hope that in 65 years he will have more sense than at 18 will make this a wise decision. I am only doing enough, so that I can afford to do the same for all/any future grandchildren.

cydney65

I'm hoping to have saved 18-20K for our granddaughter when she turns 18. The money is in my name and can be taken out before then if she needs anything urgently, like school trip. I'm hoping it can be used for university or a deposit for a place eventually.

maria3104

Reaper wrote: »

I split it 3 ways. He has a CTF (soon to become a Junior ISA) which he gets at 18.

Next for some money gifted from relatives he has a Bare Trust with Baillie Gifford who (controversially) won't pay out when he become an adult until we parents, who are the trustees, permit it. So what he does with his CTF money will determine when he gets the Bare Trust payout.

Finally we have a child pension for the long term. Sounds daft but:
1) The earlier you start the less it costs
2) He doesn't have to wait until he retires to benefit. He will benefit from having to put less in himself when he starts work and money is usually tight.
3) The investment gets topped up with tax relief even when the child pays no tax.

What a relief. I thought I was the only one doing this. thank you:money:

enator

Set up a Discretionary Trust for my three children, with the intention of buying three houses and allowing them to have the rental income (about £8k p.a. each, neatly stays under the allowance so no tax to pay). The eldest has just gone to Uni so house no 1 is in the Trust - the twins are only 15 but within the next three years they will join him so the other two houses will be placed into trust then.


As long as I live for 7 years, it falls out of my estate & being in Trust the houses can't be used to pay off spouses, creditors etc.


Similarly, if their lives turn out not so good, they will have the right to live in the property.


Once they have left Uni, I will start providing Gifts from Income and may set up another Trust to absorb more capital.


I am determined that my money goes to my children & not to the Government.

xylophone

Gifford who (controversially) won't pay out when he become an adult until we parents, who are the trustees, permit it[/QUOTE

It's certainly controversial. The beneficiary of a bare trust has an absolute right to access and control at the age of 18 (16 in Scotland).


https://www.ageasprotect.co.uk/Document/0853_GuideToTrusts

"With a bare trust the trustees can’t make any beneficiary over the age of 18 wait before they receive property that the trust is holding for them. This can be a concern if the beneficiaries are young and the trustees think they should wait before they receive the trust property."

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0316

"With a bare trust the trustees are looking after
the trust property for the known beneficiaries.
The beneficiaries become absolutely entitled
to the trust property at age 18. Once the gift
is made the beneficiaries can’t be changed
and money can’t be withheld from them
beyond the age of 18. This aspect makes
them unattractive to many clients as they
prefer to retain a greater degree of control."


http://www.osborneclarke.com/connected-insights/publications/the-powers-and-duties-of-bare-trustees/

"As already indicated the trustees' duty will be to transfer the property to the beneficiary or elsewhere at his direction." -

http://www.hmrc.gov.uk/trusts/types/bare.htm

"Bare trusts are commonly used to transfer assets to minors. Trustees hold the assets on trust until the beneficiary is 18 in England and Wales, or 16 in Scotland. At this point, beneficiaries can demand that the trustees transfer the trust fund to them."

Savingdad

We aim for £1000 a year for our son with any extra income added to this, its currently held in my name and it may get raided in a few years to clear our mortgage, after that I will have the best part of £10,000 a year to invest and save for him.
I would like to buy a little 1 bed place to rent out until he is old enough to need it but it will remain mine until the equity is needed.
I also intend to take 50% of anything he earns as keep from as soon as he starts earning so he understands about tax, deductions and bills, all this extra will be added to his funds without his knowledge until its needed.

racing_blue

savingdad wrote: »

I also intend to take 50% of anything he earns as keep from as soon as he starts earning so he understands about tax, deductions and bills, all this extra will be added to his funds without his knowledge until its needed.

I smell trouble?

kangoora

We put a small inheritance from their great-gran when our two boys were toddlers into two ISA's (in our names) and then built it up from there. Unfortunately, not being clued up at the time, it was cash ISA's and it's now a little late to move to an S&S ISA as we expect to be giving the eldest access to his money in a couple of years.

We're going to cap each lad's ISA at £10k. They don't even know about this cash and they won't be told about it until they look to buy their first property - we've already told them to come to us before they buy as we 'might' be able to help them out

On top of that we are paying their rent and £50/week living money during Uni - we couldn't see them leaving Uni owing £50k - it will be bad enough for them owing £27k for 3 years tuition fees. That's costing us £7k/year

Finally, assuming they graduate, we are planning on a £2.5k gift for their first car as a graduation present (we've already paid for their driving lessons, partially from Xmas and birthday presents). They can either take that and buy a semi-decent banger, or they can take out a loan if they like and get something a bit newer.

That will be it - total of around £33.5k each if you add it up although about £3k came from their small inheritance (£21k Uni expenses, £10k ISA and £2.5k graduation present).

xylophone

And with regard to Baillie Gifford, I note that the latest edition of their Investing for Children brochure http://www.bailliegifford.com/documentgateway.aspx?_id=3A39B056-DE6E-474E-870C-3DB1B9BB88F3&disclaimer=ok
page 17 says,

trustees relinquish control when the child
turns 18 (16 in Scotland)