My child is not ready to receive their Child Trust Fund (CTF) - What next?

rhunte79

Hi all,

So my daughter received the free £250 Government trust fund cheque when she was born, and ever since then I have been adding to it with regular monthly payments and any cash she received from Chirstmas and birthdays.

Now she is soon approaching 18 and I understand the she will now receive these funds either on her birthday or soon after.  However, I don't think she is financially responsible to manage that amount of cash.  

Currently there is around £8k in the pot and judging how she spends her money now on what I class as "silly things", I'm worried she will blow the lot, very fast and have nothing to show for it.

Does anyone know of a way I could access this money before she receives it, so I can put it in a private trust fund or savings account until she really needs it (e.g. deposit for a house, car etc.)?

She doesn't know about this fund, nor how much is in there, so she is none the wiser. 

Thanks

R

JGB1955

Once she is 18 she is considered to be an adult and can spend it as she sees fit.

Ayr_Rage

Time for a conversation with your daughter not an internet forum.

boingy

rhunte79 said:

Does anyone know of a way I could access this money before she receives it, 

Nope, there is no way. The money is hers. Your only option is to try to persuade her to put it somewhere longer term but she is free to ignore you and can spend or save it however she wants.

In a similar position my friend's daughter used hers as an initial payment on a car she couldn't afford and ended up handing the car back when she couldn't make the monthly payments on it. I don't know if she learned anything from that experience but I suspect not.

mebu60

Maybe suggest a split e.g. spend 20%, save 80% and have some savings options lined up to suggest for the latter and explain how much 'free money' she will get. 

Petriix

Ayr_Rage said:

Time for a conversation with your daughter not an internet forum.

I'd say it's extremely late for having that conversation. I've been giving my daughters ongoing education in managing their finances responsibly from a young age. They've each had access to a reasonable chunk of their own savings from age 11 with a companion current account and a debit card.

They save their birthday and Christmas money along with the older one having a (2 hours per week) part time job. They spend some of the interest they receive but are both able to grow their savings over time. When they feel it appropriate, they (not I) will choose what they want to spend their money on.

I am retaining a separate pot of savings for each of them in my own name, just in case, but I fully trust them because I have always demonstrated sound financial practices in a very transparent way. Ultimately, though, money is pointless if you never spend it on anything so I hope it goes towards enriching their lives in some way. 

Speculator

My daughter turned 18 in March and luckily for me, my daughter hates spending money. She avoids all branded clothing and luxury goods. 

She has put me in charge of managing her matured Junior ISA.

rhunte79

Ayr_Rage said:

Time for a conversation with your daughter not an internet forum.

I've had many conversations with my daughter about being financially sensible.  From the age of 11 she's been earning her pocket money and I taught and encouraged her about saving some and spending some.  Goal settings for big ticket items that she really wants.  I've taught her about understanding interest rates and how to appreciate the concept of "free money" by always looking for the best savings deals, when I'm doing so for myself and I've started introduing her to stocks and shares.  So she has an understanding. 

However, being of an impressionable age and with the additional pressures of being in college and working, she wants things "now" and is no longer in the mind frame of wanting to save.  She feels she has enough time to save for things later on.  I dabble in property development and she see's how expensive it is to buy a property, especially as her older brother is struggling to buy somewhere despite financial help from myself and his savings.

I hope that when that time comes, she will understand and listen and will allow me to help her keep the majority of it safe until she's ready, or it may have to be that she learns the hard way if she spends it all, but that would be disappointing because she will live to regret it, when she really needs it.

p00hsticks

rhunte79 said:

Ayr_Rage said:

Time for a conversation with your daughter not an internet forum.

it may have to be that she learns the hard way if she spends it all, but that would be disappointing because she will live to regret it, when she really needs it.

Sometimes that's the most effective way to learn a lesson.that will stick with her her for life.

powerspowers

I think the best you can do is have a conversation, ask her what her medium term goals are- moving out? Uni? Car? Gap year? Don’t talk about owning a house, that’s too distant and £8k isn’t going to make a difference. Ideally you want her to reach the conclusion that saving some is a good idea. Even if it’s just in a short term fix.  Rather than you telling her what to do  

Equally, she may learn the same lesson by spending it. I worked very hard as a teenager to save up £4k  had planned a gap year but didn’t go and spent all my hard earned savings in the student bar. I really regretted it but I’m a better saver now 

Reaper

The only thing that might help is the CTF does not automatically kick out as a cheque. By default it will convert into an adult ISA. So maybe you can sell it as an emergency fund or towards a house deposit rather than a windfall.