Regular savers put aside over £1,300 a year for children’s futures

New analysis by Norwich and Peterborough Building Society (N& P) of nearly 3,000 children’s savings accounts, where money was paid in monthly, found that in 2007 savers put on average £112 a month into a child’s savings account.

This figure equates to £1,346 a year or a nest egg of over £24,228 if money is saved regularly every year until the child reaches the age of 18.

The highest average amounts were saved in August (£153.09) and December (£129.72) while the lowest were saved in February (£93.43) and September (£95.08).

The account data analysed reflects the savings habits of children, their parents and their grandparents – highlighting an all round view of the amount saved for each child throughout 2007.
The high amount saved (by those who made regular monthly payments) in August (£153.09) could be explained by additional income for children from chores, summer work and ‘holiday money’ from relatives and grandparents. This bumper month is predictably followed by a low in September (£95.08) when children and their parents have less money to save due to a new school year and associated expenses.

February (£93.43) saw the second lowest regular savings amount – possibly reflecting restricted spare cash following a higher savings level in December (£129.72) and January (£103.97) as children credited their accounts with Christmas present money. The rollover expense of a new term’s school fees and costs could also be reflected here.

Gary Lacey, group product manager at N& P, commented: “With so much doom and gloom quite rightly 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 (£941.20 for a first child) but also putting in over £400 more. This is great news for the future of UK savings.

“While these figures are encouraging, more needs to be done to highlight the benefits of regular monthly saving. The ability to actively put aside regular amounts each month instils a positive savings habit and can really add up in the long run.

“With regular small deposits into a children’s savings account like N& P’s HeadStart, people can begin to build up a really healthy savings fund. This money can then be used to help fund future university fees and property purchase or allow for a well earned pocket money treat!”