Children's savings - it's just got easier

Andrew Hagger from Moneyfacts.co.uk looks at the vast array of children's savings accounts on the market and a recent innovative idea that will help boost the balances of young savers in the UK.

"The current credit crunch has highlighted the need for people to build themselves a savings safety net to help them through the more difficult times or unexpected circumstances where their finances may become stretched.

"It is never too early to start saving, and certainly doesn't make sense to wait until your children are out to work and saving their own money. Parents should seriously consider squirreling some money away from the moment they are born in order to give them a head start in later life.

"The Child Trust Fund initiative provides a £250 kick start for all children born on or after 1 September 2002 and pays out a further £250 when your child reaches seven years of age.

"If your child doesn't meet the criteria for a CTF, there are over 160 children's savings accounts to choose from with rates of up to 10% available.

"The recent launch of a new website KidStart.co.uk now makes saving for children even easier. Simply by doing your shopping online, your children or grandchildren can directly benefit on the back of your day-to-day spending.

"KidStart is basically a free children's savings club, which allows parents to enter the details of their child's savings account. Then, whenever they purchase online via over 200 well known retailers, a percentage of money spent automatically gets transferred to the child's account. Parents can invite grandparents or other family members to sign up and before you know it, the child's savings balance can really start to grow.

"The UK population needs to become more savings focused and to start to move away from the ‘buy now pay later' culture that has been so prevalent for the last decade. Initiatives such as the Child Trust Fund and the KidStart website make it easier to start building a financial foundation for the future."