Parental purses stretched to breaking point

With new research showing that parents will put their financial futures at risk to help fund their child’s education, The Children’s Mutual is urging parents of younger children to plan early and start saving.

According to the research, almost two thirds of parents said they’ll take money out of their monthly income to fund their child’s university dream, while 59 per cent will use their own savings and more than a third will take on an extra job or work overtime.

David White, Chief Executive of The Children’s Mutual, said he was extremely worried that parents could be jeopordising their own financial security to help their children avoid university debt. He said the fact that a third of parents (31 per cent) would dip into retirement savings could be misguided and lead to serious problems for families in years to come.

Mr White said: “We know that the cost of university is on the up and this research clearly shows that parents of students today are in a catch 22 situation; having to choose between their own financial security and bailing their children out. Parents of younger children have the choice to start saving now to avoid this conundrum when their child reaches adulthood. The Child Trust Fund has been introduced to try and encourage families to save.

“According to our calculations, if families were to save £100 a month into a Child Trust Fund account over the next 18 years, their children could graduate into adulthood with more than £37,000 which could really help towards the cost of higher education. And because the Child Trust Fund has been designed so anyone can save for the child, parents aren’t alone in having to find the money. If grandparents or godparents helped out by saving a little regularly now, families could help avoid a big financial headache in years to come.”

For further information on The Children’s Mutual, log on to thechildrensmutual.co.uk.