Using a regular saver plan under a bare trust structure has become very popular. It is a great way of saving to helping out your children financially in the future and it does not impact on their future inheritance tax free thresholds.
The most common question I get…and the biggest fear…is what happens when their child turns 18? They are in 6th year of school and with limited resources. They are likely to go to college soon and have a very active social life that needs to be funded. Having access to a big pot of money is a big temptation. Are they going to raid the fund and spend it on beer and nights out?
There are no changes from an administrative point of view with the life company. There are no letters of notifications sent out to tell them they are the beneficiary of a pot of money. The legal policy owners have not changed so any instruction to make any changes to the policy must come from them i.e. the parents.
From a trust point of view, once the beneficiary turns 18, the powers under the trust cease to apply. In other words, the trustee does not have the power to manage the trust fund. The onus is on the trustee to let the beneficiary know the funds are there and either:
The conversation a parent has with their now 18 year old child is up to them. We have set up a lot of plans using the annual gift exemption where the beneficiaries are already adults as well as for minors. The general consensus among adult children is the same; indifference
They are told that this is a savings plan that their parents have implemented for them to help them save for a house deposit in the future. So far, no adult child has tried to raid the pot. They understand what their parents are doing for them and get on with being a young adult. It helps that the money is held in a policy that they cannot access easily and there is no app that they can be checking the value of all the time.
If you do get them to sign a supplementary agreement for you to continue to manage the policy after they are 18, you will need to have that conversation with them as you will be asking them to sign a legal agreement between the two of you.
Each parent knows the maturity levels of their own children, so it is up to each family to make their own decision on when they notify their adult children of the existence of this money. But there should not be a fear that their 18 year old will raid the pot.
Steven Barrett
08 June 2026