Shell Island a most definitely busy in August and yes you can get noisy neighbours but tbh you can get that anywhere. If you pick your spot (ie dont go in the 'party fields' in the dunes or anywhere near the clubhouse), you should be OK.
We go a lot and have to go in the school holidays as we have kids, we also go most bank holidays. Last August Bank Holiday we watched a couple of young men set up a fantastic, brand new (still had the tape on the box) tent with a coleman event shelter, kitchen tent, shower tent, toilet tent and every camping accessory ever mentioned on this forum. It took them hours. They then cooked their tea over a tripod stove. Later on a few more friends joined them and they started drinking. No problem though and we all went off to bed about 12ish.
They were in the middle of the field, we were at the edge. At 2am the girls in the party decided it would be fun to start the car engine, put the radio on full blast and sound the horn. A quick call to the wardens office and security were round to shut them up. They patrolled regularly and then came back again at 7am to check that everything was still quiet and spotted the stack of chopped down trees that the group had collected for cooking breakfast and gave them an hour to pack up and get off site.
In my experience Shell Island is very well managed and any trouble is stopped quickly although I know some people have had bad experiences. I do think though that we are all quite intolerant of other people having fun these days. The only thing I would ever really complain about is music. Not what I want when I'm camping.
It is quite a magical place if you can get your head round the fact that you are sharing it with people that you probably don't normally mix with (and I'm sorry if that sounds patronising but it's true) then you and your kids will love it. You will probably not leave the island all week if the weather holds out.
Nantcol is lovely too (I have only visited, never camped) There isn't enough for our teenagers to do there for more than a weekend (on Shell they go fishing, swimming, crabbing, kite flying, etc) but your children are quite young so will probably love just playing in the water.
Shell Island for me every time. It can get a bit windy though
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