Four in five parents never needed to dip into children’s savings
New research from Legal & General Investments, one of the UK’s largest investment providers finds four in five (81%) parents have never needed to dip into their children’s savings.
The survey of over 2,000 UK parents showed that only one fifth (19%) have ever accessed their children’s savings. Of parents that have previously accessed children’s savings, over a third (38%) did so in order to meet short term cash flow demands. One in five did so to support childcare costs (19%) and one in twenty (4%) to boost their own investments.
Simon Ellis, Managing Director, Legal & General Investments, said: “Despite concerns surrounding the design of Junior ISA and the lack of parental access it is good to see that the majority of parents have not needed to dip into their children’s savings.
“We believe that saving for your children’s future is vital. Set against a backdrop of increased university tuition fees and ever larger deposits required for first time buyers, giving your child the very best start in adult life is paramount. All parents want to provide their children with choice and opportunity as they approach adulthood and ensuring money is available will help ease the transition.”
Children’s savings accounts have been high on the parental agenda since the withdrawal of Child Trust Funds (CTF) in January 2011. The new Junior ISA was made available to take its place on November 1st 2011, offering a tax free investment vehicle which children can access on their 18th birthday.
The design of the new Junior ISA allows parents to set aside £3,600 per year for their children’s future. Grandparents, friends and wider family can all contribute to a Junior ISA to help fund the financial demands of young adulthood where the average 18 year old faces issues from increased university tuition fees to first time buyer deposits.
Previous research from Legal & General Investments has revealed that UK parents are currently putting aside on average £42.45 per month per child, creating a pot likely to reach £14,716.