Bank of mum and dad make children’s savings a priority
As the Government ends contributions to children's savings via the Child Trust Fund scheme at the end of the 2010, new research from Halifax reveals that parents of school children continue to make saving for their future a priority.
Overall, children have benefitted from a two per cent increase in their savings. Children between the ages of 8 and 11 recorded the biggest increases with 11 year olds (7%) seeing the biggest rise in the size of their savings pot.
Although, when it comes to saving for pre-school children there are signs that parents are cutting back. There has been an average decrease of three per cent in savings balances for the ‘under fives' and a drop of eight per cent for babies under one year.
Flavia Palacios, Head of Halifax Savings Products said: ‘As the Government ends contributions to Child Trust Funds it's more important than ever that parents look carefully at how much they can afford to put aside as a nest egg for their children.
‘It's encouraging that parents are managing to keep up with savings for their children over 5 years old. Our research shows it's the youngest children who are at risk of losing out as their parents tend to think that they can start saving later. However, it's better to put aside little and often for your child's future, when you're saving over a long period of time, looking after the pennies really does mean the pounds look after themselves."
School boys still pip girls to the post
The size of boys' savings accounts continues to be slightly higher than girls, but there are signs that the gap is narrowing. School boys' savings balances increased by two per cent over the year, compared to three per cent for school girls. Overall boys continue to have savings balances that are 4% higher than girls.
Scotland sees biggest increase in savings for over 5s
The highest increases in contributions to children's savings have been in Scotland where the size of the savings pot increased by five per cent. The lowest increases to balances were found in London and the East Midlands where the amount saved increased by just one per cent
Government contributions to Child Trust Funds were cut from £250 to £50 on 1 August 2010, those children from lower-income families received £100, down from £500. All payments will stop on 1st January 2011.
Flavia Palacios continues: "Once parents have worked out how much they can afford to save for their children, the next step is to make sure they are getting the best possible rate. Halifax Children's Regular Saver offers a 6% AER fixed for 12 months and customers can save from £10 to £100 each month on behalf of a child.'