Her concern was that if she put it into a Junior ISA for her child, once they hit the age of 18 and the money belonged to them, they’d waste the lot. I was shocked by just how many of her friends agreed.
Part of their concern comes from the fact that they’re in their late 20s and early 30s, so their mistakes are fairly fresh in the mind. At the same time, parents of newborns are used to a role where they have to control every part of their child’s life and protect them at all costs.
It’s why when we asked people how they saved or invested for their children, one in four said they just put money in a savings account in their own name.
However, this isn’t necessarily as sensible as you might think. Most importantly, 18-year-olds are far more responsible with a nest egg than other aspects of their lives. Among our JISA clients, when children turn 18 and the money belongs to them, they don’t rush out and spend it on rubbish: more than 90 per cent are still invested a year later.
Having the money in their name can really help, because you can build their sense of ownership and responsibility over the years. If it has been invested, it’s also a great idea to talk to them about the funds and companies their money is supporting.
My kids’ JISAs are in a fund which holds Ferrari and one that holds Tesla – among other things – so, whenever my car-obsessed son and I have passed one of these makes in the past, I’ve said ‘that’s your car too’.
This is in stark contrast to keeping the money in your name, which either they don’t know about or they don’t feel any kind of connection to.
Once they’re old enough to borrow money, withholding their nest egg won’t stop them running up debts, so the money you’re keeping safe for them could end up being wasted paying credit card bills. Then there’s the question of keeping it in cash or investing the money. Around 70 per cent of JISAs are cash, which is perfectly understandable, because keeping the money in savings feels like the least risky thing to do.
However, because most savings accounts are running well below the rate of inflation, the spending power of this money is falling over the years. Some children’s savings accounts offer reasonable rates of interest, but if you’re keeping it in your name with a high street giant, you’re probably making 0.01pc.
Over the long term of 5-10 years or more, your money has a better chance of beating inflation in stocks and shares, and while the value will rise and fall over the short term, it has the potential to take advantage of long term growth in the markets.
Savings accounts also suffer from being too easy to access.
We all hit times when money is tight, and there’s a risk that either you or your child will end up dipping into the nest egg as you go along.
There’s no single answer that works for everyone. I don’t imagine for a second that my kids won’t make some daft decisions at 18. I’m just aware that by that stage, I won’t be able to control their lives, and have to let them make their own mistakes.
It’s an essential part of growing up, and letting them manage their own money is just part of this.
I’m fairly certain that blowing all their JISA money is unlikely to be one of these daft decisions.
The pandemic caused a boom in home working, but if you continue working from home for the long term, there’s a real risk you’ll miss out on pay rises and promotions.
An ONS study found that before the crisis, those who had worked exclusively from home for years were paid 6.8pc less than those who never did. They were less than half as likely to have been promoted between 2012 and 2017. There are clear implications for the gender pay gap. Women are far more likely to have to work flexibly for caring responsibilities.
Not all homeworkers are treated equally. Those who had moved to home working recently or who mised home and office work earned more than those who always went into work.