Money Moral Dilemma: Should we keep our teenage son in the dark about his Child Trust Fund?

MSE_Kelvin

This week's MoneySaver who wants advice asks...

We saved for our son's university education in a Child Trust Fund, which is now worth over £100,000. He turns 18 later this year, but he's recently stopped studying for his A-levels, hasn't applied to any universities and says he wants to take some time off. He's currently unaware of these savings, but we're now worried that when he is able to access the cash, he'll fritter it away. Should we tell him and try to influence his decision-making before he turns 18, or should we keep him in the dark for as long as possible to try and protect the money until he's mature enough to use it wisely?

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marcia_

 I would keep hush until you have to, the bank may well send him a letter when he is 18. Find out if he will be going to study further after a break or if he intends to work instead, Maybe then discuss saving the money elsewhere for a house deposit if he doesn't want to study. 

Brie

you mean not tell him about money that will soon be legally his?

have you been talking to him about finances or is he the sort that just has his hand out and you've always passed him some cash whenever you've been asked?

personally I'd suggest that when he's 18 tell him there's a pot of money intended for uni but you'd like to help him manage it while he decides what he wants to do.  Maybe agree that he should take 10% or something now to go travelling or whatever.  

There's nothing wrong with him using it to set up a business, buy a flat, all sorts of alternatives to being in school.

Keep_pedalling

Not sure how this would be achieved the trust fund will write to the holder giving them the option of taking the money or transfering to an ISA. Only he can do that.

What you need to do is find a Time Machine and go back to when he was 10 or 11 and teach him all above saving and investment instead of him being presented a very large amount of money out of the blue. 

ShinyStarlight1

It’s a tricky question, this giving large amounts of money to very young adults. I have £ for my grandchild but I’m also aware that our brains are only fully mature at 25.

alexkent

I was given savings money under my control at 16 that came from my grandfather. Something like £15k 25 years ago. I can’t even tell you how I frittered it all away, but I did. It was stupid of me but even more stupid of my parents to set it up like that. If it all possible, keep him in the dark or be very strict with instructions how he is to use it. 

Marineboy81

Maybe he’ll surprise you and use it wisely.  You need to start treating him as an adult. You can’t withhold it from him of it’s legally his. That’s illegal and controlling. 

You knew you were saving this money for him. You knew he was going to be 18 some day and it would be his. If you wanted the money to be used for university why not save it in your own names?  

Idroid88

We faced a similar dilemma a few years back and had absolute trust in our daughter.  We had brought her up on understanding money, or so we thought.  Sadly, she did the same as your son and stopped taking A Levels and this was followed by behaviours so out of character, not helped by the passing of her grandmother to whom she was very close.  Sadly, our daughter frittered it away on so called friends that soon disappeared when the money had gone (albeit not as much as you have saved).  Now older, she admits she was not ready and regrets her mistakes.  She admits she should not have received the money till she was 25.  I don't envy your position but maybe an open and frank discussion may be better especially if the Trust was intended for University but he has decided that avenue is not for him.  Good luck

tulipchickuk

ask him what he would do if he were to inherit £100,000
then base your decision on his response 

Rd1994

If your followed anything Martin / the experts say it’s that you shouldn’t pay for your children to go to uni. It’s the best loan they will ever get and will unlikely not pay it back. Let them use the money for a house deposit or business idea later in life if they need it but I would save it until they’re working / find their feet / what they want to do in life. Also whose uni cost 100k?! 

jhmaria

My son didn't show any interest in going to university until he was 25.  And did an extra year at 'sixth form' 
 It took a while for him to find something that inspired him, he said he didn't want to go to uni for the sake of it. He used some savings to travel. And did a couple of little jobs in the meantime. 
We sat down and discussed how to invest money for best results. Never too late. 
Some young people take longer to mature.