Fears over growing trend of families without savings

Research from Abbey Savings has highlighted that over one in four (28 per cent) British parents with young children have no savings or investments to use in times of difficulty or to use as a nest egg for their children's future.  Indeed a further 20 per cent of these parents have less than £1000 to fall back on.

There is a growing concern for families, especially those with children of primary school age, who are contending with the higher costs of raising a child. This has resulted in a quarter of these parents reducing the amount that they are saving by as much as £3,300 a year.  What is more parents are also dipping into existing savings, withdrawing an average of 28 per cent (£1,800) of their total savings this year.

Reza Attar-Zadeh, Director of Savings and Investments commented:  "It's vital for everyone to have a rainy day fund even more so for parents, who must juggle the need to build up a nest egg for their children's future with the need to provide for the here and now".

Parents are facing an up hill struggle as they contend with:

The cost of childcare rising by 6.5 per cent since December 2007. Childcare from six months until the age of 14 could cost as much as £53,818, or £332 a month, for a typical UK household with two working parents.

The increasing cost of education, where the average household could spend £50,240 over their child's lifetime. This includes a whopping £34,300 on a three year university degree course, accounting for annual tuition fees, travel, books, and living costs, including rent, bills and household items.

However, on a positive note, nearly one third (29 per cent) of parents intend to start saving more each month, going forward.

Reza Attar-Zadeh continues "It is concerning that many families are saving less, as this could leave them facing financial difficulty in the future. It's encouraging to see that some families are looking ahead and planning to save more - we hope this trend will continue".

Abbey's Fixed Rate Monthly Saver allows savers to put aside as little as £20 a month up to £250 a month and pays a highly competitive 4.00 per cent gross/AER fixed for one year.  This could be an ideal home for those looking to build up a lump sum.