Would you trust your teenager with a large sum of money? New research by YouGov, commissioned by wealth management company Brewin Dolphin indicates that most adults in the South East do not trust 18-year-olds to inherit or handle significant sums of money and feel the early and mid-twenties is a more financially responsible age group.
Legally, once a child turns 18 he or she can access the money in a junior ISA (JISA) – as set up on their behalf by parents and grandparents – and spend it how they please. However, over two out of five adults (42%) in London and the South East believe 18 is too young for children to be given control of such savings plans, according to the survey, in line with the national average of 43%.
When asked about what age a child is responsible enough to inherit £100,000 or more, only 7% of adults in the SE and London felt that those aged 18-21 are old enough, with under a quarter (23%) thinking 22-25 year olds are mature enough to take on the responsibility. 28% felt 26-30 year olds were responsible enough, while a further 29% felt that people need to be older than 30.
The majority of respondents in this region also felt that restrictions should be placed on children inheriting wealth – only one in 10 (9%) people felt that no restrictions are needed – with just over a quarter (26%) of people saying that children should be at least 25 to inherit without restriction.
Commenting on the findings, Rob Burgeman, Divisional Director of Investment Management at Brewin Dolphin, said: “While there is a commitment by parents and grandparents to ensure that their children and grandchildren have the best financial start to adult life, they do not want to see their money wasted or become the cause for financial recklessness and frivolity. Some would rather wait until the recipients of their wealth have reached an age of financial maturity, so that the money is spent in a way that reflects the spirit in which it was given.”
Despite this, 41% of Britons in the SE and London say parents should help with paying their children’s university costs. Surprisingly, there is a huge divide in this area across the regions – almost half of Londoners (46%) agree that parents should help pay for university, compared with just 16% and 17% in the North East and East Midlands respectively. Help towards a deposit for a new home also tops the list of ways in which Britons in the SE and London think parents should financially support their children, with 39% of adults citing this. In addition, 29% said that parents should pay their children’s wedding costs.
When it comes to financial education, the overwhelming majority (91%) of adults in this region agree that it is the job of parents to teach their children about responsible money management. 85% of adults also agree that pocket money is a good way to start teaching children to appreciate money and instil a sense of financial independence.