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Britain Has 'Strong Savings Ethic'

Jan 29, 2008
Mums and dads are increasingly making preparations for their children's financial future, new research shows.

Findings by Norwich and Peterborough Building Society (N&P) indicates that parents are saving an average of 1,346 pounds per year. The financial services firm went on to claim that should parents regularly save up this amount of cash each year until their child reaches 18 then they could be left with a nest egg of 24,228 pounds.

Following on from regularly putting money away, the company claims that consumers can "begin to build up a really healthy savings fund". It was suggested that such cash could be used to help meet the cost of university fees when children are older, be of assistance in making the initial steps on the property ladder or finance a "well-earned pocket money treat".

In addition having a significant savings fund might prove to be of aid to people wishing to make repayments on personal loans and store and credit cards in later life.

Research from the financial services firm also indicated that August and December are the months where the highest average amount of money is saved, with 153 pounds 09 pence and 129 pounds 72 pence put away respectivly. Such investment was put down to the additional cash that children receive at this time of year through chores, seasonal jobs and 'holiday money'. In comparison, September (95 pounds 08 pence) and February (93 pounds 43 pence) were revealed to be the lowest savings months. This was attributed to parents potentially having to pay for school fees and getting to grips with their spending after the Christmas period.

Commenting on the study, Gary Lacey, group product manager for N&P, said: "With so much doom and gloom surrounding debt, it is very encouraging to see such a strong savings ethic from - and for - the young. This data reveals that not only are regular savers potentially saving their entire children's benefit payment each year (941 pounds 20 pence for a first child) but also putting in over 400 pounds more. This is great news for the future of UK savings.

"While these figures are encouraging, more still needs to be done to highlight the benefits of saving to those who either don't save at all, or who do so rarely. Actively putting aside regular amounts instils a positive savings habit in children and adults alike and can really add up in the long run."

Those people who are concerned that the various pressures that their finances are coming under impacts upon their ability to put money into savings accounts may wish to consider applying for debt consolidation. Although this presents another form of financial constraint, a consolidation loan could help borrowers merge a number of commitments on their spending into a single low-rate repayment. This could see the amount of disposable income consumers have increase each month, so allowing for more to be invested into a savings scheme.

Indeed a cheap consolidation loan might be of particular use for older people, as a recent Birmingham Midshires study indicates more than a third of the over-55s have dipped into their pension schemes to provide monetary assistance to their grown-up children and grandchildren. An estimated 12 per cent have also gone into various investments and savings schemes to help their offspring manage demands on their spending.
About the Author
Tom Dawson writes for Essentially Home Loans. Our visitors can apply online for cheap secured personal loans and UK consolidation loans at the lowest interest rates.
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