Money Moral Dilemma: Should I open savings accounts for my nieces?

melee67

I don't think there is any issue with you wanting to set aside money for your family, and I don't think it's meddling (if anything, I'd say your husband is meddling... what reason does he have for not wanting you to do this?!).

You need to ask yourself a few questions. 

1. What do you intend the money to be for? Is it a bit of pocket money that you want them to have immediate access to, and to spend on whatever they want now? Or do you mean to build a nest egg for them for when they are adults? 

2. Do you know why your brother isn't saving for them? You need to be sensitive around this, but not overly. Plus, if it's because he is not good with money, I wouldn't set up bank accounts in the girls' names - and in any case I think you are unlikely to be able to do this without parental control on the account, which essentially gives the parents access to it.  

3. Do you want them to know you are doing it? If not, there's no reason for you to tell either your nieces or their parents that you are saving for them. 

I save monthly for both my nieces and my step son in childhood investment accounts, which allow me to designate the funds for a particular child (doesn't have to be my own). The money is held in investment funds, so there is some risk, but I intend to save for the long term until each child turns 21, so this works for me. In the meantime, the funds technically still belong to me, and nobody else has access, although you can nominate other adults to run the trust with you. My brother knows about it and is very happy for me to do this, but my nieces are blissfully unaware and I prefer it that way. 

wannabe_a_saver

The good thing about keeping the savings secret and in your own name is that if the worst happens and you fall in hard times, the cash is accessible for you to use and nobody will ever be upset at ‘losing’ what they never knew they might have got.

justworriedabit

wannabe_a_saver said:

The good thing about keeping the savings secret and in your own name is that if the worst happens and you fall in hard times, the cash is accessible for you to use and nobody will ever be upset at ‘losing’ what they never knew they might have got.

Good post. I've not done it but I know people that have. The few I am aware of heard of are all women. They often do this for the first 5/10 years of wedlock and if the see everything as good then they declare it. Never heard of a man doing that.
This is easily explained away as savings for a rainy day when declared.

justworriedabit

An important point no one has touched on is that Most banks won't let children open saving accounts without the consent of an adult, who is ultimately responsible for the minor's account If you're the one responsible, you have full access  to the money in your kids account.

Therefore, if a relative opened one only they could or a nominated adult could access the account until the child was of x age.

I stand by what I said about the childs parents being possibly offended by the gesture and indeed people will be aware not every agrees with everyone's comments hence this being a discussion form, no big deal.

justworriedabit

Marcon said:

Why ask the parents when you can ask a random bunch of strangers who don't know the family at all.

Just give them cash and let their parents decide what the kids do with it. Or suggest to the parents that you open a stakeholder pension for each of the children...that way they get a 20% top up from the taxman even though they haven't paid any tax.

what if the parents decide to spend it on themselves?

justworriedabit

jajx28 said:

I agree, I have had to do this for my grandson born during lockdown, as my bank required me to visit a branch to set up an account for him, which I obviously don't want to do currently, so set an account in my name online.  My other grandchildren, I set up child savings accounts for which had good rates of interest ( not so good recently) and I pay monthly DDs into their accounts and lump sums for birthdays, Christmas and Easter. I intend to change my grandson's account when I can get to the bank with his birth certificate. I see this as an entirely personal thing and would never involve anyone else in saving as the money is then a gift completely from me to my grandchild, when I chose or die. 

I think you may agree that setting up a savings a/c for a grand child is slightly different to setting one up for ones relatives as per OP.  It is common for grandparents to do that but not for nephews/etc.  Personally, I see it as meddling but then again some won't as is life.

James137

I think it is very kind of you to do so. You have not said what their financial circumstances are, and may not even know. But, by doing this you may help them when they are older. I opened an account for my nephew, and put money in it over 18 years for him as I knew his parents would do nothing of the kind. I gave it to him on his 18th birthday, I told my sister I was doing this, and asked her not to tell him, she did. But didn't tell me she had, and to be honest he did not appear to be that grateful. I was disappointed in his reaction, and was further disappointed when I later found out he gave most of it to his mother so she could enjoy a holiday. I saved the money for him, but, once you have handed it over it is theirs to dispose of as they wish.
On the other hand my mother in law unknown to us opened an account for my two children, put money in it every month for them (unknown to me and my wife) and gave it to them for their 18th Birthday. Both my kids were over joyed, very appreciative, and have decided to save further so as to help pay for a deposit on a property in the future. (They did treat themselves to a couple of hundred quid as a treat from it). If you did let the kids know about the account first then I think you would be obliged to inform the parents, but if you kept it a secret then it is your right to surprise them with the gift when you think it is right to do so. Good luck whatever you do. But, as Martin is always saying you are never too young to start saving.

hob_nob_bob

I have accounts in my own name for my two godsons, and put £10.00 a month into each. My plan is that when they turn 18/21 (I've not quite decided, and it's years off yet) I'll be able to give them a nice little lump sum to help with uni/buying a car etc. I'm not telling my godsons that I'm doing this as I don't want them to 'expect' it, I'd like it to be a nice surprise for them, although the parents know that I am doing this. 

meknowalot-51

Speak to the parents first as they may have already set one up and then you can add to that.I just can't imagine any parent saying no to a sugestion such as yours,very thoughtful and forward thinking.We used to give the grandchildren a cheque for xmas to help them start to save for the future.Now there early teens and we've explained all about why we did this and the importance of building for the future,they are very appreciative of all we've done.Today they get more techno. gifts than direct money,but the important thing is the building block is there for them to add to whenever they want,after the're 18 the main decision is there's.

SJPMaster

Most banks will not allow you to open an account on behalf of someone else. Banks will only open a child account at the request of their parent, who is then responsible for controlling the account until the child comes of age (usually 16). 
If you are not on speaking terms with the parent then there is nothing to be done.
I pay money to my grandchildren each month into a savings account set up by their parent. I promoted it to their parent as an Education Fund, which they accepted without fuss, after all what parent doesn't want the best education for their child?