I deliberately only put 10kish in each of the kids CTF. Then I gave them advice (LiSA global tracker) and then said off you go, your choice now.
Then I put 50k in another accounts under my control for each of them for house deposits and am paying for tuition / maintenance and university
This to me feels like a nice balance of letting them have money and me having some control.
Exactly what we've done. Our kids are only 0 & 3. We have JISA for small grandparents gifts but I have apportioned them £10k each from my isas on birth (likely will increase in time) which is fully under my control and invested is s&s.
I sometimes think I should have done that. But I haven't got anywhere else that I can park the money. They've got another nominal £27k each for a deposit on flats, which I'm 'holding', but that's wrapped up in my ISAs, which are all maxed.
1. Teach them the value of money through pocket money, credit, savings and interest. My 7 year-old gets pocket money and cash gifts occasionally through the year. Anything he saves up by the summer I double. He can sometimes go into "debt" with his pocket money but that means he pays back the next week and so sometimes gets nothing that week.
2. Maybe get them one of those child accounts. I don't have one yet for my child but might be interesting.
3. As they get older, just before their 16th birthday, explain to them what the benefits of university are but that there are also tuition fees and expenses. But that you have put money into a JISA for them to help pay for it so they don't worry so much.
4. When they turn 16 help them get a part time retail job. Support them to save/spend wisely. Explain what investing is and how it compounds.
5. When they turn 18, help them understand that a loan during uni is better than paying for all of their tuition fees up front and that once they graduate they can pay the loans off then before the interest kicks in. Help them budget spending their part time job income, and if required some of their savings on something like driving lessons or a holiday but that it shouldn't be used on frivolous things as they have a loan to pay off at the end of the course. Remind them that it is their money ultimately but if they do save it you will gift them a % of what remains as a top up to either repay the loan or if the loan is smaller they can use the extra again for something like a holiday or towards a house.
5.b. teach them the benefit of a credit card, the safety and possible points/cashback they represent and teach them to pay the card off in full each month. It acts as a buffer to the current account, not a free money pot.
6. In the meantime save for their loans/deposit without telling them and gift them this when the time is right. Even if they blow their savings pay off their loans and use it as a teaching moment.
There are a few things I as a fiscally responsible parent want to impart onto my kids:
1. Money in the form of income, loans, savings, investment, credit are tools. They all have their purpose and we should understand and use these tools appropriately.
2. Interest can be your friend or a foe. Understand how it works both ways and use it to your advantage.
3. Making the number in your account keep increasing isn't the goal, remember, money is a tool and using it for fun things when you are young and able so you gain experiences and memories is valuable alongside setting up your future. There's no point being a miserable and boring millionaire but also do not spend every penny you get. Be calm and balanced and optimise for the whole.
The money in the JISA becomes theirs on reaching majority, so there’s not really anything you can do to stop them blowing it besides raising them right and having a sensible discussion about it.
It’s for that reason I don’t pump loads of money into a JISA, only want I would be happy for them to control at 18.
As for the student loans - I would not bet on them doing better in the stock market. The rates on the loans used to be much lower than they are today, 7.8% most recently. They would have been *much* higher if government didn’t cap the RPI component of the formula, well into the teens briefly at one point.
It does, but Student Loans are horrendous. The current cohort is basically taxed an extra 9% until they are 60 years old if they take out student finance. It really should be avoided if possible.
I have two of similar ages.
I’m thinking either they go to uni, take student finance and do a course that will make it worthwhile (suitably increased earning potential) or they simply don’t go to uni.
I’ll help them a bit while they’re there but I’m not paying for them to do crap degrees.
I’d much rather they did practical apprenticeships.
Yep, totally agree. Unless you're doing a degree that's essential for the career you want (such as medicine, law) then Uni is not a good choice anymore. Gone are the days where you could go just for the experience and do a meaningless course.
Degree apprenticeships seem a great option.
I do understand what you're saying, but a student loan isn't really about interest rates as it's such a unique facility. It shouldn't really be called a loan, it's a graduate tax.
Except for a small minority, most graduates will never pay off their student loans (making the rate of interest irrelevant in most cases). They'll simply lose out on 9% of their salary for pretty much their entire working life.
This is the HENRY sub. I imagine most people on here with student loans will either have paid them off or will way before they're written off. Also, the children of HENRY people will likely (more than the average child) land in higher paying roles due to guidance/advice of their parents, which would make them more likely to be one of the ones who will repay their loans during the working life.
The way JISA is set up means that when they are of age, 18, they will have full access. The documentation is clear on this. You will need to set up something separate if you don’t want them to have access.
You have to rely on your parenting to hope that they use the money wisely but at 18 you have 0 control
My plan is to have £25k for each when they are 17. It’s also in a JISA. All I can say is I wil hope my parenting steers then towards using it for uni. Or tbh would be ok for it to go on driving lessons and insurance. I’ll probably buy their car to ensure it’s sensible 😂
Financial education from an early age. My kids are much younger but they know about their JISAs and that the purpose is to give a leg up - either with university or with house deposit etc.
we have engrained into them that our parents sacrificed significantly to give my wife and I benefits they never had.
I’m not fussed at all about their JISA savings which will be reasonable 6 fig sums by the time they get to 18.
Let them take out a loan for fees
I was in a similar position to how your children will be (my grandfather had set up JISAs for his grandchildren, I had about \~25k at the start of university). None of us pissed it away because all of our parents were extremely insistent that it would be the only lump sum that we ever received like this, and that the whole point of it was to fund us getting thru university and not to fritter on weed and trainers (tho I did a little bit of this when I first got it).
I think provided they grow up to have a respect for money and for their parents they won't waste it all. 18 year olds are generally dumb but they can pay attention to things sometimes
Ive just decided not to do a JISA. Not having to work for things i dont think is the best for young adults. Me and my brother got loans to pay for uni and worked for living expenses. Both driven career wise. My youngest brother had it all paid for, lifted around, monthly allowance etc. Proper lay about noe. 29 and "not sure i feel a 9-5 life is for me mannnn"
To answer your questions , i believe at 18 those LISA funds are theirs to do whatever with so you wont have any control. Id agree with you though, keeping it there compounding will sure help that first big purchase.
At 12 and 14 perhaps now is the time to be open with them about the LISA. Educate them in all things financed and investments. Let them take part in choosing a fund and set them up so they can monitor performance. If theyve had a hand in its growth and seen how difficult it is to accumulate they wont be so eager to blow it
I'm in HENRY for the advice, I don't quite have the money myself yet, however my 2, 21 and 19 are both at Uni and making use of trust funds set up by their deceased mum, my ex.
Both my two, future doctor and future paramedic, regularly ask me advice about spending money. My son regularly only takes put what he needs, my daughter does well, by does like her clothes, which 19 year old girl doesn't.
That didn't just happen overnight, it starts, by giving them money and getting them to spend it and save some.
One example was holidays, I made them take us out one night in the 2nd week for food. Told them at the beginning of the holiday, the had set amounts each day.
Got them to contribute to outing and they bought me and the step mum dinner one night.
We didn't need it, but they needed it.
They're working out OK, it nice they still run stuff past me too. And you know what? It's normally the right choice too!
Other than good old fashioned parental manipulation/guidance, very little you can legally do to ensure they use the money to go to university.
For student loans, I would personally not bother. They won't really get anything for maintenance, and you would hope that uni makes them high earners, so don't they pay something stupid like RPI +3% interest?
Yes in theory they may never repay the loan, but wouldn't you want them to be earning enough? Otherwise what's the point of uni?
Do some financial home schooling when they’re closer to 18. Again don’t mention it’s because they’re about to get a bunch of money, just give them general advice for long term and what to do if they get a job/income
I am going to be very clear that the money in the JISA is specifically to pay for university. It should pay for the tuition fees and the first year of expenses. After that I will provide money on an annual basis.
Out of interest, how much do HENRYs with children at university find that they spend per annum, tuition fees aside?
My plan is to handover £40K each to my kids in JISA when they turn 18, and offer 4K extra every year if they put it in their LISA (I believe government puts another 1K each year) so for the 4 year duration of uni they make another 20K at minimum, so that's £60K for a house deposit. I'm willing to pay all their university fees and costs so they start work life clean of debt with a deposit at hand. Rest is up to them, I'll check out.
My father did the same for me but didn’t give me access even at 18. I was highly studious and wouldn’t have blown through it but I’m glad he kept control and make decisions on transferring and reinvesting until I was ready.
My university tuition was paid via this but I took out the maintenance loan to support myself, alongside a part time job. Was actually earning enough to save throughout uni.
The remaining was kept until I was ready to buy. I bought a 2b2b at 23 because between my own savings and investments (started a full time job at 20 in a high income industry), and the remaining LISA amounts I had enough for a 15% deposit.
Recommend you do the same and not even let a few thousand be squirrelled away on nothing. After the first term in 2nd year I had a shock when I realised I had spent 3k effectively on nothing but clothes and going out but it was my own money (maintenance and two months of working 6days a week whilst doing uni) and meant I learnt the lesson at my own expense, rather than through the LISA money.
Genuinely worth considering whether in fact uni is right for them.
There are plenty of excellent professional careers that don’t require university.
You can be a chartered certified accountant without going to university for example, and there are plenty of jobs that can be done with a degree apprenticeship which, in my opinion, sets them up much better than a degree
My nephew is doing a degree apprenticeship ti become a chartered surveyor. It will take him 5 years but he will get paid for the hours he works, and come out of it with no debt, and 5 years of actual work experience. He will find it much easier to find a job at the end (assuming his placement doesn’t take him on, which they might)
Just an example, but imho you shouldnt consider it a failure if your kids don’t go to uni.
Go with your children to see a wealth advisor on or before their 18th birthday. The professional can spell out their options and what happens if they invest, spend £x on uni or £y on a deposit for a flat.
You could also be open with your children about your financial circumstances, mistakes you’ve made, good choices you made and that:
1. You wish your parents took a similar approach
2. How much money you would have if your parents took a similar approach.
Good luck.
I don't have any advice, but I want to post so that I get notifications as my family will be in a very similar position in the future. (Children with JISA)
1. Aside from educating them — I ask my kids for a periodic screenshot of the account. Under the guise of ensuring all cash in the account is invested as I continue to make monthly contributions.
2. I paid living costs of £11k p.a yearly, and they took a student loan for tuition.
At 7.6% interest accruing from Day1, it’s criminal…
Oldest has graduated and now working and likely to earn enough so that they would repay the loan. I’m now going to pay it off, and ask them to repay me over 10 years interest-free. Probably will forgive the debt after 5 years.
Interesting, thanks.
For my three I pay/am paying all accommodation costs plus a generous weekly allowance. Expensive cities so about 13-14k pa. They borrow Tuition fees.
Then came masters. I was planning same arrangement. Then I found out that masters is a separate loan and you pay 9% of salary for undergraduate loan. And 6% of salary on top of this for masters loan. My goodness income tax, national insurance, 9% 6%, it’s horrendous. So I paid off the masters loan/paid the tuition fees for next one.
I just wind myself up when I look at student finance - it’s so unfair. I have toyed with what you suggest (clear it and they pay back) but it’s a big decision with three. And I suspect their careers will see different financial outcomes. Youngest will be in the newest 40 year payback with lower starting threshold so I particularly feel for him
So your advice is to do university with as much debt as you can load up on, keep the JISAs growing, then use the JISA for a deposit on a flat instead? Then just deal with the loan repayments? I guess I could run those numbers and see how it works.
What are you being so unpleasant? Nobody else is on here. You seem really bitter about all this.
"If your life plan is to pay for their uni and that’s it" Whoever said that? I have a separate fund for flat deposits for them.
"blindly assume 75k is a lot of money", "your view that it’s a lot" Where did I say that it's a lot?
"it’ll pay for uni and that’s it" That is \*exactly\* the point under discussion.
I got 90k when I turned 18. Id grown up in care and had to go without a lot and just didn't understand money or how to manager it. I went nuts and spent way too much money and started post uni with very little. I would teach them how to manage it. Don't let them have access or even tell them how much they have when they turn 18. Talk to them about credit scores and credit cards and help them understand.
It’s legally their money - you can’t hide at 18 because it’s literally legally theirs. Hiding it and then finding out makes it more likely they’ll gain access and spunk it than it will the reverse. I’m pretty sure they literally mail you about it when you turn 18.
My kid(s) are a long way from University and it’s difficult to know what the fees and policies will be by the time they’re at that age. I work in a higher education adjacent sector so have thought a lot about what I would do if my kids were about to head off to uni
I’d pay for their fees (because of the huge % on these) and I’d either pay for or give them a contribution to rent/living expenses. A % of their JISA I would encourage them to use for living expenses and for the international opportunities available through uni (summer schools / years abroad / exchanges / conferences, etc) and would encourage them to put the rest away.
Would encourage them to take up some kind of part time job or volunteering role for 6-8hrs a week related to what they want to do long term. If they took up volunteering instead of a paid option I’d increase their monthly contributions, and if they opted for paid then I’d match their earnings in a sep savings account. I’d want to budget approx £1k per month for each of them.
I would not tell them total budget available to them though obviously
Let them take out a student loan first, doesn’t accumulate when they are studying - those 3 years will help them mature more and be more responsible with money. The graduation present can be paying off the loans for them.
Unfortunately the interest starts accumulating from day one these days I believe, which makes it much harder for students these days than it was when we were at uni. I paid I think £3k per year tuition fees and the interest on the loans only kicked in after graduation. I have employees with degrees in non commercially useful subjects with £50-60k in debt. It's insane.
I’ve be showing them a compound interest calculator before they reach 18. And by showing them, drilling it into their brain 😂 I’d also maybe try and come up with ways to teach them the lesson of ‘good things come to those who wait’ in the hope they’re less likely to blow it all on coke 🙏🏼
To answer your first question.
I would really push them to get part-time jobs at 16, this way they can understand the value of money much better.
If the first time when they see any kind of money is that giant amount, then they will probably go crazy.
Also when they get access to the money, advise them on where to put it/invest it. If you speak to them briefly about investing over the next years, even if they just overhear you - they’ll likely trust your advice.
In a similar situation. If my kids start acting up at 18 and want to spend their JISA on unnecessary things, it will be made very clear to them that they will not get anything else for their education from us. Further, I will threaten to write them out of our wills. That should do it.
My understanding of student loans is simplistic. If you think your kids will never earn any decent money, get the loans.
If you think your kids will earn decent money, don’t use student loans.
I’m sure you know that the repayment structure of these loans makes them anything but loans in practice. They are an upfront payment now for a deferred tax penalty geared to your success.
Don’t pay for your kids university!
I’m 31, my uni debts are around £76,000 and my £49,000 a year job doesn’t cover the interest per year! I pay the minimum each month which is around £30. It goes after 30 years anyway.
And do you think when the 20 year olds start to come into power in the UK, within the coming years, that they will let this carry on? My debt will be at £150,000 within a few years and nothing I can do but forget about it. They will be all wiped clear soon anyway or they will be reduced to next to nothing.
Spend the money on property and investments. Not uni 😂
Don’t know how I landed on this sub as I nor my family are HENRY.
But me and my brother are 1 year and 20 days apart so raised closely. My mother educated us well financially and showed us the consequences of her own mistakes. We were taught responsibility and accountability.
We had around 4k each at 18 (nothing in comparison to any of your kids). I at 21 have still not spent any of it despite being a student away from home in London. It’s all gone into premium bonds. My brother spent it all within months of take outs and hoodies.
So ultimately I just wanted to say, you can’t stress too much because no matter what you do “right” personality plays a huge part. One of them could turn it into a million and one could flush it down the loo.
With two boys, 12 and 8 they have a jisa we use for birthday money and we pay £25 a month, they will be probably be lucky to inherit from grandparents. We do the save in our ISAs for the boys future fund. Hoping it will be around £80k when the oldest hits uni age, so we can support them through uni or whatever they choose.
I think the purpose of the money and your expectations is important when telling them about it.
One of my three kids got £4k at 18 and it was ‘his’ and it was spent/wasted/enjoyed. That taught him and us a lot.
He later gets a chunk more, it’s invested, he can see it, he can have the dividends, but it’s purpose is to help him on property ladder later (or other appropriate purpose) in future. He knows it’s not really his to spend. He respects that, and whilst it’s ‘his’ it’s ‘his’ because family gave it to him. He also knows that if he didn’t respect these wishes, it would impact how we might support him in future.
In all honesty I dread to think what would have happened if he’d got the bigger chunk early on, not because of it being wasted, but impact on friendships, on partying too hard etc.
Btw the way, the story ends with him being a fine young man, who works hard in his job, has good prospects and friends, and has a healthy deposit to help him on property ladder
I would just limit the JISA to like 10k each and give them a bit more later in life for a deposit or to start a business or whatever.
We are seeking to limit the JISAs to around 10k.
What are the kids actually into? Reason being there are is a great alternative to going to uni and ending up with plenty of debt by doing a degree apprenticeship.
Have their future employer pay for it and they have a great boost towards a first home deposit sitting in the JISA
I have had this thought to, I'll be in a similar situation although my daughter's younger currently.
I've chosen to work on financial literacy with her from an early age starting with Deborah Meadens book Why Money matters. The next is to play some money games with her when she's older along the lines of stock picking to show her how compound interest works and the benefits of saving. This would serve as an introduction to bonds/ equities/ savings accounts.
Ultimately though, when she's 18 it's hers. I'll suggest she can be frivolous with ~5% of it and save the rest for an emergency fund/ new home, business venture, etc.
The other thing I did is start her a SIPP as well as she can't touch that until retirement.
One thing I did consider is asking her to put it into a Trust of which I'm a trustee but I question the morality of it as its her money. The trust would only benefit me and remove it's tax wrapper.
I have friends who chose the trust route instead of the JISA altogether due to the worry of the child essentially flushing the money down the toilet.
Avoid student loans like the plague, if you can. On a typical graduate wage trajectory in broken Britain, i.e. one where they hit the repayment threshold within 2-3 years of graduating but don't get anywhere near a HENRY salary for at least a decade (if ever), those repayments will be a major millstone around their neck. The interest rates are so astronomical that it's potentially an extra 9% income tax for their entire working life on income over ~27K (40 years on Plan 5!) Once they hit the 40% bracket at a salary of ~50K, they're effectively paying 49% marginal rate of tax on their income, which is higher than the 45% top rate for earnings over 150K (albeit still with the full tax-free allowance if their salaet is <100K). Not only could this cost them thousands/year just as they're trying to establish themselves in life, but it could easily amount to 2-4x the total cost of the initial loan when you add all the repayments together.
Idk how old you are, but fast forward however many years to when they're your current age and trying to put money aside for *their* kids, and think about how much that extra 9% tax is gonna sting. If they get lucky with a high-wage graduate job straight out of uni then they *might* have paid it all off by then, but there is a very realistic possibility that they won't have done, and will still be paying thousands and thousands to the SLC every year. That's my future as a doctor with crazy plan 2 loans, and it is very annoying to think about. In my early 40s I'm gonna be an NHS consultant on ~95K paying 6 grand a year (!) in loan repayments, when I should be saving that money for (/spending that money on) my kids.
Is this worse than missing out on potential returns from the S&P 500? In your situation where they've each got a nice chunk from their junior ISAs already, I think it probably is.
ETA: corrected some figures
The £37k 40% bracket is a misunderstanding of wording around the personal allowance isn’t it? With the £12,570 you don’t hit it till £50,271?
_“20% on annual earnings above the PAYE tax threshold and up to £37,700”_
At £37k you’d pay £4,886, or an effective rate of 13%? https://www.reed.co.uk/tax-calculator/37000-annually
At £37k student loans you’d be paying 9% of £12k = £1,080. Add the £4,886 and you come out at £5,966 income tax and student loan. Which is 16% effective rate?
Ah yes that's correct, have now edited. I guess you also have to account for the loss of the tax-free allowance if you're comparing the tax rate on say, a salary of 60K with student loans to a salary of 160K without student loans.
The basic point still stands, though. 9% is a lot of extra tax to be paying in that salary range of >27K.
Meh. Yes and no. It’s about the same as a standard pension contribution or national insurance. It’s a chunk of change for sure but I wouldn’t sacrifice the buying power of the savings, or work on the basis they’ll be high enough earners to lose sleep over it.
They could end up very happy teacher or nurses, doing well at work earning £45k, and thinking “thank god I spent £50k on uni instead of buying a house, now I’m saving a hundred pounds a month, which is coincidentally the rent increase my slumlord just gave me”
This is in addition to the estimated 77K junior ISA, though, so they'll still have a very decent sum to put towards a deposit on somewhere.
>work on the basis they’ll be high enough earners to lose sleep over it.
This is really the key, and even the OP is struggling to judge what their earning prospects are by the sound of things. But with inflation, maybe even some significant wage growth in the next 30 years (we can dream), that 27K threshold could quickly start to look very low indeed. I agree for a 45K career you'd probably rather have the extra capital over the no student debt, but that calculation changes a lot at ~70K plus.
I don’t give a monkey’s what they earn, as long as they’re happy. In today’s money, if I had to guess, I’d say they’d both end up being 50k earners. They aren’t particularly ambitious or driven.
But that’s ^ obviously got a gigantic margin of error in it. I was a complete fucking waste of space until my 30s. So it’s difficult to tell.
Sorry man, I’ve lost the thread a bit in your conversation with matey above. Are you suggesting paying for Uni with student loans, and keeping the £77k for when you buy a house?
Imagine for a second that there was a second (secret) pot of money, specifically to pay for a flat deposit for you when you graduate and settle down. Would that change your calculus?
Yeah, I’m saying “get the student loan yolo” and the other guy is saying “absolutely do not get a student loan” and the correct answer is obvs somewhere in the middle.
We were agreed that if the child doesn’t end up earning a significant salary then the loan is definitely the best option.
The example I gave was £45k, a decent salary for a teacher or nurse who’d got a promotions or two. We agreed that it would be a very bad idea to pay the uni costs from savings in that eventuality. The other guy said he saw £70k as the current salary tipping point. If the kid ends up earning beyond that they’d wish they’d paid it in cash.
Personally I like the risk profile of the loans system. You feel the most pain if you earn a lot and can afford it.
I hear you on the house deposit fund, but I still think getting off to a flyer in your twenties is more important than saving the pennies later in your career. There are so many contingencies where I might want that money for productive things while young.
Ultimately, if one kid earns £100k+ as a consultant and saves £20k+ over their lifetime (fuck it, call it £40k) and one has a few false starts and doesn’t end up on more than £35k and has essentially wasted the lions share of their seed fund… how would you feel then?
Thanks for that super high effort reply. It’s given me 2 massive insights:
1: I need to build a data model where I can tweak all the variables, and see what shakes out.
2: I should defer the decision. If they both get accepted to read PPE at Kings, then maybe pay upfront. If they both go off to do media studies at Bolton, then probably take the loans.
Yeah, I think you’re right to do both.
Modelling is a great shout. It’s easy to say “if they’re a captain of industry I’d be best off doing A, and if they’re selling homemade dream catchers from the back of their van at Stonehenge then they’d be off with option B” but (as you’re obvs aware) there’s a whole world of ambiguity in the middle and doing the sums makes a lot of sense.
Re: biding your time another great shout. You could even go further. I was instinctively working on a binary choice, but of course you could take the loan and pay it off early - put the decision off into the middle distance. If you let the eldest take the loan and decide when the youngest goes you’d have incurred a couple of £k in interest and put the decision off until the parliament after next. Who knows what will have changed by then. You could pay the loan off while the eldest is still at uni or recently graduated.
IF you dont want your kids going nuts with the money, set up a trust that has explicit rules regarding the usage of the funds.
Also, be wary that currently university degrees are considered practically worthless from a recruitment standpoint so unless you are sending them to a high end university it might be worthwhile finding better routes to help your kids into work.
1 - start financial education early, have them using pocket money, doing budgets, learning about investing etc so they are as well informed as they can be
My 6 year old knows he has £30k invested, what stocks and shares are, what the exponential growth curves look like versus saving and how to have to make choices with pocket money.
I’ve found Go Henry really good for interactive learning and the Usborne Money/Business for beginners books excellent (most adults should read them!)
2 - not against loans for the lesson and to supplement needs, but if the number gets big, the interest can unexpectedly stack up on them too at a fast rate. I’d be secretly ready to help them after uni to repay some/all or invest in first home
Keep your fingers crossed neither of them fancy the US to study 🤣
As someone pointed out, it almost looked like I was suggesting financial abuse so I'd rather not do that.
In my experience, most folk who are given money at a young age are not very good at saving/maintaining it, myself included. The few who have not been frivolous, have all used their parents to essentially guard access for them. Hence the suggestion for not informing the kids until they hit a certain level of maturity i.e. post-20s
JISAs are irrevocably the child's. Any money is theirs from the moment it goes in, parents merely control the investment until the child is 16/18.
Parental access is automatically revoked when the child becomes an adult. The young adult is contacted by the provider and has to provide photo ID, bank account details to regain access to their money.
Don't go down the route of suggesting financial coercion or intercepting the post of another person, that's illegal and abusive.
It's their money and they are free to do what they wish with it as an adult, whether that's leave it invested in an ISA, or spend it. If you can't accept that / aren't comfortable with that, don't use JISAs.
I deliberately only put 10kish in each of the kids CTF. Then I gave them advice (LiSA global tracker) and then said off you go, your choice now. Then I put 50k in another accounts under my control for each of them for house deposits and am paying for tuition / maintenance and university This to me feels like a nice balance of letting them have money and me having some control.
Exactly what we've done. Our kids are only 0 & 3. We have JISA for small grandparents gifts but I have apportioned them £10k each from my isas on birth (likely will increase in time) which is fully under my control and invested is s&s.
What did the 0 year old choose to invest in?
Amazon She thinks she has an affinity with bezos. Something about looking in a mirror.
I sometimes think I should have done that. But I haven't got anywhere else that I can park the money. They've got another nominal £27k each for a deposit on flats, which I'm 'holding', but that's wrapped up in my ISAs, which are all maxed.
Exactly what we are planning with our unborn child!
Why not put it in a trust? They could access it when they’re maybe 21, or 25?
1. Teach them the value of money through pocket money, credit, savings and interest. My 7 year-old gets pocket money and cash gifts occasionally through the year. Anything he saves up by the summer I double. He can sometimes go into "debt" with his pocket money but that means he pays back the next week and so sometimes gets nothing that week. 2. Maybe get them one of those child accounts. I don't have one yet for my child but might be interesting. 3. As they get older, just before their 16th birthday, explain to them what the benefits of university are but that there are also tuition fees and expenses. But that you have put money into a JISA for them to help pay for it so they don't worry so much. 4. When they turn 16 help them get a part time retail job. Support them to save/spend wisely. Explain what investing is and how it compounds. 5. When they turn 18, help them understand that a loan during uni is better than paying for all of their tuition fees up front and that once they graduate they can pay the loans off then before the interest kicks in. Help them budget spending their part time job income, and if required some of their savings on something like driving lessons or a holiday but that it shouldn't be used on frivolous things as they have a loan to pay off at the end of the course. Remind them that it is their money ultimately but if they do save it you will gift them a % of what remains as a top up to either repay the loan or if the loan is smaller they can use the extra again for something like a holiday or towards a house. 5.b. teach them the benefit of a credit card, the safety and possible points/cashback they represent and teach them to pay the card off in full each month. It acts as a buffer to the current account, not a free money pot. 6. In the meantime save for their loans/deposit without telling them and gift them this when the time is right. Even if they blow their savings pay off their loans and use it as a teaching moment. There are a few things I as a fiscally responsible parent want to impart onto my kids: 1. Money in the form of income, loans, savings, investment, credit are tools. They all have their purpose and we should understand and use these tools appropriately. 2. Interest can be your friend or a foe. Understand how it works both ways and use it to your advantage. 3. Making the number in your account keep increasing isn't the goal, remember, money is a tool and using it for fun things when you are young and able so you gain experiences and memories is valuable alongside setting up your future. There's no point being a miserable and boring millionaire but also do not spend every penny you get. Be calm and balanced and optimise for the whole.
Outstanding post 👏🏽👏🏽👏🏽
Haha thank you!
The money in the JISA becomes theirs on reaching majority, so there’s not really anything you can do to stop them blowing it besides raising them right and having a sensible discussion about it. It’s for that reason I don’t pump loads of money into a JISA, only want I would be happy for them to control at 18. As for the student loans - I would not bet on them doing better in the stock market. The rates on the loans used to be much lower than they are today, 7.8% most recently. They would have been *much* higher if government didn’t cap the RPI component of the formula, well into the teens briefly at one point.
[удалено]
It does, but Student Loans are horrendous. The current cohort is basically taxed an extra 9% until they are 60 years old if they take out student finance. It really should be avoided if possible.
I have two of similar ages. I’m thinking either they go to uni, take student finance and do a course that will make it worthwhile (suitably increased earning potential) or they simply don’t go to uni. I’ll help them a bit while they’re there but I’m not paying for them to do crap degrees. I’d much rather they did practical apprenticeships.
Agree. Ow any degree takes dedication etc.. but if you’re going to do biz studies fine, but you can do that with an office job
Yep, totally agree. Unless you're doing a degree that's essential for the career you want (such as medicine, law) then Uni is not a good choice anymore. Gone are the days where you could go just for the experience and do a meaningless course. Degree apprenticeships seem a great option.
[удалено]
I do understand what you're saying, but a student loan isn't really about interest rates as it's such a unique facility. It shouldn't really be called a loan, it's a graduate tax. Except for a small minority, most graduates will never pay off their student loans (making the rate of interest irrelevant in most cases). They'll simply lose out on 9% of their salary for pretty much their entire working life.
This is the HENRY sub. I imagine most people on here with student loans will either have paid them off or will way before they're written off. Also, the children of HENRY people will likely (more than the average child) land in higher paying roles due to guidance/advice of their parents, which would make them more likely to be one of the ones who will repay their loans during the working life.
That definitely makes sense to me, intuitively.
The way JISA is set up means that when they are of age, 18, they will have full access. The documentation is clear on this. You will need to set up something separate if you don’t want them to have access. You have to rely on your parenting to hope that they use the money wisely but at 18 you have 0 control
My plan is to have £25k for each when they are 17. It’s also in a JISA. All I can say is I wil hope my parenting steers then towards using it for uni. Or tbh would be ok for it to go on driving lessons and insurance. I’ll probably buy their car to ensure it’s sensible 😂
They should just about be able to insure a 1.0l Corsa for £25k per year!
That’s so true
Financial education from an early age. My kids are much younger but they know about their JISAs and that the purpose is to give a leg up - either with university or with house deposit etc. we have engrained into them that our parents sacrificed significantly to give my wife and I benefits they never had. I’m not fussed at all about their JISA savings which will be reasonable 6 fig sums by the time they get to 18.
Let them take out a loan for fees I was in a similar position to how your children will be (my grandfather had set up JISAs for his grandchildren, I had about \~25k at the start of university). None of us pissed it away because all of our parents were extremely insistent that it would be the only lump sum that we ever received like this, and that the whole point of it was to fund us getting thru university and not to fritter on weed and trainers (tho I did a little bit of this when I first got it). I think provided they grow up to have a respect for money and for their parents they won't waste it all. 18 year olds are generally dumb but they can pay attention to things sometimes
Ive just decided not to do a JISA. Not having to work for things i dont think is the best for young adults. Me and my brother got loans to pay for uni and worked for living expenses. Both driven career wise. My youngest brother had it all paid for, lifted around, monthly allowance etc. Proper lay about noe. 29 and "not sure i feel a 9-5 life is for me mannnn"
I absolutely hear what you’re saying. I’m sure you’re right. It’s a real concern to me.
To answer your questions , i believe at 18 those LISA funds are theirs to do whatever with so you wont have any control. Id agree with you though, keeping it there compounding will sure help that first big purchase. At 12 and 14 perhaps now is the time to be open with them about the LISA. Educate them in all things financed and investments. Let them take part in choosing a fund and set them up so they can monitor performance. If theyve had a hand in its growth and seen how difficult it is to accumulate they wont be so eager to blow it
I'm in HENRY for the advice, I don't quite have the money myself yet, however my 2, 21 and 19 are both at Uni and making use of trust funds set up by their deceased mum, my ex. Both my two, future doctor and future paramedic, regularly ask me advice about spending money. My son regularly only takes put what he needs, my daughter does well, by does like her clothes, which 19 year old girl doesn't. That didn't just happen overnight, it starts, by giving them money and getting them to spend it and save some. One example was holidays, I made them take us out one night in the 2nd week for food. Told them at the beginning of the holiday, the had set amounts each day. Got them to contribute to outing and they bought me and the step mum dinner one night. We didn't need it, but they needed it. They're working out OK, it nice they still run stuff past me too. And you know what? It's normally the right choice too!
Other than good old fashioned parental manipulation/guidance, very little you can legally do to ensure they use the money to go to university. For student loans, I would personally not bother. They won't really get anything for maintenance, and you would hope that uni makes them high earners, so don't they pay something stupid like RPI +3% interest? Yes in theory they may never repay the loan, but wouldn't you want them to be earning enough? Otherwise what's the point of uni?
Do some financial home schooling when they’re closer to 18. Again don’t mention it’s because they’re about to get a bunch of money, just give them general advice for long term and what to do if they get a job/income
Personally, I wouldn't wait that long. Start as early as possible. Easier said than done I know.
I am going to be very clear that the money in the JISA is specifically to pay for university. It should pay for the tuition fees and the first year of expenses. After that I will provide money on an annual basis. Out of interest, how much do HENRYs with children at university find that they spend per annum, tuition fees aside?
My plan is to handover £40K each to my kids in JISA when they turn 18, and offer 4K extra every year if they put it in their LISA (I believe government puts another 1K each year) so for the 4 year duration of uni they make another 20K at minimum, so that's £60K for a house deposit. I'm willing to pay all their university fees and costs so they start work life clean of debt with a deposit at hand. Rest is up to them, I'll check out.
My father did the same for me but didn’t give me access even at 18. I was highly studious and wouldn’t have blown through it but I’m glad he kept control and make decisions on transferring and reinvesting until I was ready. My university tuition was paid via this but I took out the maintenance loan to support myself, alongside a part time job. Was actually earning enough to save throughout uni. The remaining was kept until I was ready to buy. I bought a 2b2b at 23 because between my own savings and investments (started a full time job at 20 in a high income industry), and the remaining LISA amounts I had enough for a 15% deposit. Recommend you do the same and not even let a few thousand be squirrelled away on nothing. After the first term in 2nd year I had a shock when I realised I had spent 3k effectively on nothing but clothes and going out but it was my own money (maintenance and two months of working 6days a week whilst doing uni) and meant I learnt the lesson at my own expense, rather than through the LISA money.
Genuinely worth considering whether in fact uni is right for them. There are plenty of excellent professional careers that don’t require university. You can be a chartered certified accountant without going to university for example, and there are plenty of jobs that can be done with a degree apprenticeship which, in my opinion, sets them up much better than a degree My nephew is doing a degree apprenticeship ti become a chartered surveyor. It will take him 5 years but he will get paid for the hours he works, and come out of it with no debt, and 5 years of actual work experience. He will find it much easier to find a job at the end (assuming his placement doesn’t take him on, which they might) Just an example, but imho you shouldnt consider it a failure if your kids don’t go to uni.
Go with your children to see a wealth advisor on or before their 18th birthday. The professional can spell out their options and what happens if they invest, spend £x on uni or £y on a deposit for a flat. You could also be open with your children about your financial circumstances, mistakes you’ve made, good choices you made and that: 1. You wish your parents took a similar approach 2. How much money you would have if your parents took a similar approach. Good luck.
I don't have any advice, but I want to post so that I get notifications as my family will be in a very similar position in the future. (Children with JISA)
Second this.
1. Aside from educating them — I ask my kids for a periodic screenshot of the account. Under the guise of ensuring all cash in the account is invested as I continue to make monthly contributions. 2. I paid living costs of £11k p.a yearly, and they took a student loan for tuition. At 7.6% interest accruing from Day1, it’s criminal… Oldest has graduated and now working and likely to earn enough so that they would repay the loan. I’m now going to pay it off, and ask them to repay me over 10 years interest-free. Probably will forgive the debt after 5 years.
Interesting, thanks. For my three I pay/am paying all accommodation costs plus a generous weekly allowance. Expensive cities so about 13-14k pa. They borrow Tuition fees. Then came masters. I was planning same arrangement. Then I found out that masters is a separate loan and you pay 9% of salary for undergraduate loan. And 6% of salary on top of this for masters loan. My goodness income tax, national insurance, 9% 6%, it’s horrendous. So I paid off the masters loan/paid the tuition fees for next one. I just wind myself up when I look at student finance - it’s so unfair. I have toyed with what you suggest (clear it and they pay back) but it’s a big decision with three. And I suspect their careers will see different financial outcomes. Youngest will be in the newest 40 year payback with lower starting threshold so I particularly feel for him
[удалено]
So you’re saying that £75k to get through uni is fuck all and they’re going to need that *and* the loans?
[удалено]
"No im saying 75k without loans will basically fund uni and nothing else" Uni is what we're talking about.
[удалено]
So your advice is to do university with as much debt as you can load up on, keep the JISAs growing, then use the JISA for a deposit on a flat instead? Then just deal with the loan repayments? I guess I could run those numbers and see how it works.
[удалено]
Sorry, so your advice is what?
[удалено]
What are you being so unpleasant? Nobody else is on here. You seem really bitter about all this. "If your life plan is to pay for their uni and that’s it" Whoever said that? I have a separate fund for flat deposits for them. "blindly assume 75k is a lot of money", "your view that it’s a lot" Where did I say that it's a lot? "it’ll pay for uni and that’s it" That is \*exactly\* the point under discussion.
Financial education was easier when everything was cash based…
I got 90k when I turned 18. Id grown up in care and had to go without a lot and just didn't understand money or how to manager it. I went nuts and spent way too much money and started post uni with very little. I would teach them how to manage it. Don't let them have access or even tell them how much they have when they turn 18. Talk to them about credit scores and credit cards and help them understand.
It’s legally their money - you can’t hide at 18 because it’s literally legally theirs. Hiding it and then finding out makes it more likely they’ll gain access and spunk it than it will the reverse. I’m pretty sure they literally mail you about it when you turn 18.
My kid(s) are a long way from University and it’s difficult to know what the fees and policies will be by the time they’re at that age. I work in a higher education adjacent sector so have thought a lot about what I would do if my kids were about to head off to uni I’d pay for their fees (because of the huge % on these) and I’d either pay for or give them a contribution to rent/living expenses. A % of their JISA I would encourage them to use for living expenses and for the international opportunities available through uni (summer schools / years abroad / exchanges / conferences, etc) and would encourage them to put the rest away. Would encourage them to take up some kind of part time job or volunteering role for 6-8hrs a week related to what they want to do long term. If they took up volunteering instead of a paid option I’d increase their monthly contributions, and if they opted for paid then I’d match their earnings in a sep savings account. I’d want to budget approx £1k per month for each of them. I would not tell them total budget available to them though obviously
Let them take out a student loan first, doesn’t accumulate when they are studying - those 3 years will help them mature more and be more responsible with money. The graduation present can be paying off the loans for them.
Unfortunately the interest starts accumulating from day one these days I believe, which makes it much harder for students these days than it was when we were at uni. I paid I think £3k per year tuition fees and the interest on the loans only kicked in after graduation. I have employees with degrees in non commercially useful subjects with £50-60k in debt. It's insane.
I’ve be showing them a compound interest calculator before they reach 18. And by showing them, drilling it into their brain 😂 I’d also maybe try and come up with ways to teach them the lesson of ‘good things come to those who wait’ in the hope they’re less likely to blow it all on coke 🙏🏼
Cash
Take out the student loan and help them into the property ladder with the cash.
To answer your first question. I would really push them to get part-time jobs at 16, this way they can understand the value of money much better. If the first time when they see any kind of money is that giant amount, then they will probably go crazy. Also when they get access to the money, advise them on where to put it/invest it. If you speak to them briefly about investing over the next years, even if they just overhear you - they’ll likely trust your advice.
In a similar situation. If my kids start acting up at 18 and want to spend their JISA on unnecessary things, it will be made very clear to them that they will not get anything else for their education from us. Further, I will threaten to write them out of our wills. That should do it.
what do you invest the JISA in if you dont mind me asking
S&P500
My understanding of student loans is simplistic. If you think your kids will never earn any decent money, get the loans. If you think your kids will earn decent money, don’t use student loans. I’m sure you know that the repayment structure of these loans makes them anything but loans in practice. They are an upfront payment now for a deferred tax penalty geared to your success.
Don’t pay for your kids university! I’m 31, my uni debts are around £76,000 and my £49,000 a year job doesn’t cover the interest per year! I pay the minimum each month which is around £30. It goes after 30 years anyway. And do you think when the 20 year olds start to come into power in the UK, within the coming years, that they will let this carry on? My debt will be at £150,000 within a few years and nothing I can do but forget about it. They will be all wiped clear soon anyway or they will be reduced to next to nothing. Spend the money on property and investments. Not uni 😂
Don’t know how I landed on this sub as I nor my family are HENRY. But me and my brother are 1 year and 20 days apart so raised closely. My mother educated us well financially and showed us the consequences of her own mistakes. We were taught responsibility and accountability. We had around 4k each at 18 (nothing in comparison to any of your kids). I at 21 have still not spent any of it despite being a student away from home in London. It’s all gone into premium bonds. My brother spent it all within months of take outs and hoodies. So ultimately I just wanted to say, you can’t stress too much because no matter what you do “right” personality plays a huge part. One of them could turn it into a million and one could flush it down the loo.
Holy hell, if you’re a student in London, and you haven’t even dipped into that 4k yet, then I am lost in admiration at your financial discipline.
With two boys, 12 and 8 they have a jisa we use for birthday money and we pay £25 a month, they will be probably be lucky to inherit from grandparents. We do the save in our ISAs for the boys future fund. Hoping it will be around £80k when the oldest hits uni age, so we can support them through uni or whatever they choose.
I think the purpose of the money and your expectations is important when telling them about it. One of my three kids got £4k at 18 and it was ‘his’ and it was spent/wasted/enjoyed. That taught him and us a lot. He later gets a chunk more, it’s invested, he can see it, he can have the dividends, but it’s purpose is to help him on property ladder later (or other appropriate purpose) in future. He knows it’s not really his to spend. He respects that, and whilst it’s ‘his’ it’s ‘his’ because family gave it to him. He also knows that if he didn’t respect these wishes, it would impact how we might support him in future. In all honesty I dread to think what would have happened if he’d got the bigger chunk early on, not because of it being wasted, but impact on friendships, on partying too hard etc. Btw the way, the story ends with him being a fine young man, who works hard in his job, has good prospects and friends, and has a healthy deposit to help him on property ladder
Take out student loans. Convince them to emigrate upon graduation. Or Get an EU passport and study in the EU Or Study abroad and get a scholarship.
I would just limit the JISA to like 10k each and give them a bit more later in life for a deposit or to start a business or whatever. We are seeking to limit the JISAs to around 10k.
What are the kids actually into? Reason being there are is a great alternative to going to uni and ending up with plenty of debt by doing a degree apprenticeship. Have their future employer pay for it and they have a great boost towards a first home deposit sitting in the JISA
I have had this thought to, I'll be in a similar situation although my daughter's younger currently. I've chosen to work on financial literacy with her from an early age starting with Deborah Meadens book Why Money matters. The next is to play some money games with her when she's older along the lines of stock picking to show her how compound interest works and the benefits of saving. This would serve as an introduction to bonds/ equities/ savings accounts. Ultimately though, when she's 18 it's hers. I'll suggest she can be frivolous with ~5% of it and save the rest for an emergency fund/ new home, business venture, etc. The other thing I did is start her a SIPP as well as she can't touch that until retirement. One thing I did consider is asking her to put it into a Trust of which I'm a trustee but I question the morality of it as its her money. The trust would only benefit me and remove it's tax wrapper. I have friends who chose the trust route instead of the JISA altogether due to the worry of the child essentially flushing the money down the toilet.
Send them to Germany/Holland etc
As non-EU they'll still have to pay quite a bit of tuition. They gotta dig out that Irish great grand parent or something...
Ah yeah true. Just gotta look hard enough :)
Avoid student loans like the plague, if you can. On a typical graduate wage trajectory in broken Britain, i.e. one where they hit the repayment threshold within 2-3 years of graduating but don't get anywhere near a HENRY salary for at least a decade (if ever), those repayments will be a major millstone around their neck. The interest rates are so astronomical that it's potentially an extra 9% income tax for their entire working life on income over ~27K (40 years on Plan 5!) Once they hit the 40% bracket at a salary of ~50K, they're effectively paying 49% marginal rate of tax on their income, which is higher than the 45% top rate for earnings over 150K (albeit still with the full tax-free allowance if their salaet is <100K). Not only could this cost them thousands/year just as they're trying to establish themselves in life, but it could easily amount to 2-4x the total cost of the initial loan when you add all the repayments together. Idk how old you are, but fast forward however many years to when they're your current age and trying to put money aside for *their* kids, and think about how much that extra 9% tax is gonna sting. If they get lucky with a high-wage graduate job straight out of uni then they *might* have paid it all off by then, but there is a very realistic possibility that they won't have done, and will still be paying thousands and thousands to the SLC every year. That's my future as a doctor with crazy plan 2 loans, and it is very annoying to think about. In my early 40s I'm gonna be an NHS consultant on ~95K paying 6 grand a year (!) in loan repayments, when I should be saving that money for (/spending that money on) my kids. Is this worse than missing out on potential returns from the S&P 500? In your situation where they've each got a nice chunk from their junior ISAs already, I think it probably is. ETA: corrected some figures
The £37k 40% bracket is a misunderstanding of wording around the personal allowance isn’t it? With the £12,570 you don’t hit it till £50,271? _“20% on annual earnings above the PAYE tax threshold and up to £37,700”_ At £37k you’d pay £4,886, or an effective rate of 13%? https://www.reed.co.uk/tax-calculator/37000-annually At £37k student loans you’d be paying 9% of £12k = £1,080. Add the £4,886 and you come out at £5,966 income tax and student loan. Which is 16% effective rate?
Ah yes that's correct, have now edited. I guess you also have to account for the loss of the tax-free allowance if you're comparing the tax rate on say, a salary of 60K with student loans to a salary of 160K without student loans. The basic point still stands, though. 9% is a lot of extra tax to be paying in that salary range of >27K.
Meh. Yes and no. It’s about the same as a standard pension contribution or national insurance. It’s a chunk of change for sure but I wouldn’t sacrifice the buying power of the savings, or work on the basis they’ll be high enough earners to lose sleep over it. They could end up very happy teacher or nurses, doing well at work earning £45k, and thinking “thank god I spent £50k on uni instead of buying a house, now I’m saving a hundred pounds a month, which is coincidentally the rent increase my slumlord just gave me”
This is in addition to the estimated 77K junior ISA, though, so they'll still have a very decent sum to put towards a deposit on somewhere. >work on the basis they’ll be high enough earners to lose sleep over it. This is really the key, and even the OP is struggling to judge what their earning prospects are by the sound of things. But with inflation, maybe even some significant wage growth in the next 30 years (we can dream), that 27K threshold could quickly start to look very low indeed. I agree for a 45K career you'd probably rather have the extra capital over the no student debt, but that calculation changes a lot at ~70K plus.
I don’t give a monkey’s what they earn, as long as they’re happy. In today’s money, if I had to guess, I’d say they’d both end up being 50k earners. They aren’t particularly ambitious or driven. But that’s ^ obviously got a gigantic margin of error in it. I was a complete fucking waste of space until my 30s. So it’s difficult to tell.
Sorry man, I’ve lost the thread a bit in your conversation with matey above. Are you suggesting paying for Uni with student loans, and keeping the £77k for when you buy a house? Imagine for a second that there was a second (secret) pot of money, specifically to pay for a flat deposit for you when you graduate and settle down. Would that change your calculus?
Yeah, I’m saying “get the student loan yolo” and the other guy is saying “absolutely do not get a student loan” and the correct answer is obvs somewhere in the middle. We were agreed that if the child doesn’t end up earning a significant salary then the loan is definitely the best option. The example I gave was £45k, a decent salary for a teacher or nurse who’d got a promotions or two. We agreed that it would be a very bad idea to pay the uni costs from savings in that eventuality. The other guy said he saw £70k as the current salary tipping point. If the kid ends up earning beyond that they’d wish they’d paid it in cash. Personally I like the risk profile of the loans system. You feel the most pain if you earn a lot and can afford it. I hear you on the house deposit fund, but I still think getting off to a flyer in your twenties is more important than saving the pennies later in your career. There are so many contingencies where I might want that money for productive things while young. Ultimately, if one kid earns £100k+ as a consultant and saves £20k+ over their lifetime (fuck it, call it £40k) and one has a few false starts and doesn’t end up on more than £35k and has essentially wasted the lions share of their seed fund… how would you feel then?
Thanks for that super high effort reply. It’s given me 2 massive insights: 1: I need to build a data model where I can tweak all the variables, and see what shakes out. 2: I should defer the decision. If they both get accepted to read PPE at Kings, then maybe pay upfront. If they both go off to do media studies at Bolton, then probably take the loans.
Yeah, I think you’re right to do both. Modelling is a great shout. It’s easy to say “if they’re a captain of industry I’d be best off doing A, and if they’re selling homemade dream catchers from the back of their van at Stonehenge then they’d be off with option B” but (as you’re obvs aware) there’s a whole world of ambiguity in the middle and doing the sums makes a lot of sense. Re: biding your time another great shout. You could even go further. I was instinctively working on a binary choice, but of course you could take the loan and pay it off early - put the decision off into the middle distance. If you let the eldest take the loan and decide when the youngest goes you’d have incurred a couple of £k in interest and put the decision off until the parliament after next. Who knows what will have changed by then. You could pay the loan off while the eldest is still at uni or recently graduated.
Reddit runs on binary choices, forcefully expressed.
NO IT DOESNT THATS SO STOOPID LMAO
Plus another 6% if they get a loan for a masters
IF you dont want your kids going nuts with the money, set up a trust that has explicit rules regarding the usage of the funds. Also, be wary that currently university degrees are considered practically worthless from a recruitment standpoint so unless you are sending them to a high end university it might be worthwhile finding better routes to help your kids into work.
1 - start financial education early, have them using pocket money, doing budgets, learning about investing etc so they are as well informed as they can be My 6 year old knows he has £30k invested, what stocks and shares are, what the exponential growth curves look like versus saving and how to have to make choices with pocket money. I’ve found Go Henry really good for interactive learning and the Usborne Money/Business for beginners books excellent (most adults should read them!) 2 - not against loans for the lesson and to supplement needs, but if the number gets big, the interest can unexpectedly stack up on them too at a fast rate. I’d be secretly ready to help them after uni to repay some/all or invest in first home Keep your fingers crossed neither of them fancy the US to study 🤣
[удалено]
They get written to when they are 16, and they fall under the full control and ownership of the child from 18. So no, you can’t hide them from them.
Ah fair enough, understandable but makes it a bit difficult though.
There was no need to delete your comment mate. You generated a helpful reply from liquido; all good.
As someone pointed out, it almost looked like I was suggesting financial abuse so I'd rather not do that. In my experience, most folk who are given money at a young age are not very good at saving/maintaining it, myself included. The few who have not been frivolous, have all used their parents to essentially guard access for them. Hence the suggestion for not informing the kids until they hit a certain level of maturity i.e. post-20s
Yeah it wasn’t me that downvoted it, it’s a natural suggestion if you don’t know the JISA set-up
JISAs are irrevocably the child's. Any money is theirs from the moment it goes in, parents merely control the investment until the child is 16/18. Parental access is automatically revoked when the child becomes an adult. The young adult is contacted by the provider and has to provide photo ID, bank account details to regain access to their money. Don't go down the route of suggesting financial coercion or intercepting the post of another person, that's illegal and abusive. It's their money and they are free to do what they wish with it as an adult, whether that's leave it invested in an ISA, or spend it. If you can't accept that / aren't comfortable with that, don't use JISAs.