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

DillyDobby

The dilemma was when you set up the saving scheme in the first place because once a child reaches the age of 18years the money belongs to them.  If he is asked to complete a financial form asking what money he has he would be lying if he does not declare the money in his name.  When you set if up you hope that your child will act responsible but how can anyone know what that child will be like when they reach 18 years. The money now legally belongs to your son.  It was a risk when you set it up.

JayD

When you choose to tell your son - and hopefully have a reasonable conversation with him about it - is up to you, (although you may be pre-empted by the bank if you leave it too long. 

However, what he chooses to do with this huge sum of money is entirely up to him.

It is sad that such savings cannot be held until children are at least 21 - or even 25 - when they have matured a little more than they have at 18.

ZeroSum

University isn't for everyone. As long as he's doing something whether it's getting an apprenticeship or learning a trade it's not an issue. You could basically just tell him now he's an adult, if he's reckless with the cash he's getting chucked out of the house

mdomds

Perhaps he is worried about the expense of going to university or perhaps he has other worries about not getting good A levels.  A detailed discussion about his thoughts and fears for his future path might help if you haven't already done that.

tiger17bear

He can take the money out as soon as he is 18, those are the rules. Would you rather he made a decision with instant access or with time to think about it? Perhaps knowing that he could go to university without a huge debt might make it more appealing? 

Gosportmum

You know your son best. Why has he dropped out of A levels? Is it because he's worried how he can afford to go to Uni, so what's the point of carrying on studying if he can't afford it?
Once he's 18 the CTF money is his. You'll have no control, you can only advise him how to invest/ spend the money. As he seems a bit lost at the moment I would be worried that he's going to fritter this substantial amount of money away. I think you need to tell him about this money sooner than later, so he's got time to digest and consider his options before he's 18. He needs financial education asap.
Our 14 y.o is already concerned about future financial costs of Uni, as we're both retired /income has reduced, so we recently made her aware that she will be OK as her CTF will be sufficient enough to cover her fees. But once Yr 1 is paid, we expect her to invest Year 2&3 CTF money  until needed. If she decides to delay Uni/or not go at all, then we will have an adult discussion/ offer advice on what to do with £30k+. But she knows once it's gone, it's gone - there'll be no more ££ from us to subsidise delayed Uni. You can't hold your adult children's hand forever.

Mstake

Unfortunately this is not your decision. The child trust fund is set up in a way that as soon as he turns the Child Trust Fund matures. This means that:

your child automatically takes over the account

no more money can be added

Your child can either:

take out the money

transfer the money to an adult ISA

The Child Trust Fund will then close.

Until your child withdraws or transfers the money, it stays in an account that no one else has access to.

Drillsalter

I would not tell him. I have been in the same predicament, and would advise that you keep a hold of it. When he has his feet firmly on the ground, you can then give him a surprise for either his education or a good deposit on a house/flat.  

CarterNomad

My kid is still too young, so I haven't had this experience yet, but I've been thinking about it recently. Looking back, if I had received even some money at 18, I know I would have wasted it on nonsense—chocolates, impressing my dumb friends, or other trivial things.

You should definitely set that money aside for education or wait until your kid shows real initiative. The neocortex—the part of the brain responsible for self-awareness—only fully develops around the age of 21. Handing an 18-year-old access to a trust fund is like giving a grenade to a monkey.