Mums forced to reduce family savings to budget for essentials
Ahead of the Chancellor's budget this Wednesday, Family Investments reveals, in its first ever UK Mums' Budget, that almost half of mums across the country (47 per cent) will be reducing family savings by an average of £386.76 over the next year.
This means a total of £1.3bn will be cut from household savings as families struggle to meet the escalating cost of everyday essentials.
The UK Mums Budget research showed that not being able to save enough or anything at all was the second biggest concern after paying for utility bills, demonstrating that saving is still a priority for families across the UK. Despite this, saving levels have been hit across the board, with mums making the most significant reductions (£20.18 per month) to short-term savings such as instant access ISAs. Pensions have also been hit with just over a million mums (18 per cent) cutting their monthly pension contributions this year by an average of £159.60.
Long term savings for children have also been hit in mums' budgets, but have seen the lowest impact overall in terms of cut-backs. However, more than one in five mums (21 per cent) will be cutting back a total of £58.80 per year on saving for their children's futures. This is despite the rising cost of university fees.
The research suggests that savings cut-backs have been made necessary, despite the fact that families want to prioritise them, by the extra budget needed by mums to cover everyday essentials such as utilities, transport costs, groceries and housing costs. The most commonly felt spending squeeze among over three quarters (77 per cent) has been caused by utility price rises. In total, UK mums will be spending over £2.5bn more on utilities throughout 2011; this equates to £36.76 more per month, per household.
Furthermore, transport costs have risen for 75 per cent of mums; with the additional spend on transport across the UK totalling £2.2bn, or £401.64 per family per year. In total, UK mums will be spending £2.3bn more on groceries over the next year; this equates to £35.22 more per month, per household.
Asked what they would do if they were Chancellor for the day, Mums were clear that reducing everyday costs and helping them balance the need to work harder with looking after their children are the priorities. The three Budget announcements most Mums would like the Chancellor to make are:
Scrap April's fuel duty rise (74% of Mums)
Provide better provisions for flexible working for both parents (51%)
Remove VAT from child essentials e.g. carry cots, child car seats, prams and pushchairs (45%)
Kate Moore, Head of Savings and Investments at Brighton-based Family Investments said: "Our first Mums Budget clearly shows that Mums are under the financial cosh at the moment. They are being hit hard by the increasing cost of everyday items, particularly utility bills, petrol and food. This is forcing them to cut back on savings, even though they are very concerned about the consequences of doing so.
"Mums across the UK are attempting to be resourceful with 62 per cent saying they will go out and eat out less as a family or buy more supermarket own brands (59 per cent) to try and reduce grocery spending. However, they are clearly looking for the Chancellor to provide extra help and ease some of the financial squeeze.
"One thing we hope the Chancellor will announce in the Budget are measures to encourage savings. In particular, the planned launch of the new Junior ISA will be very significant as it's clear that Mum's up and down the country need a simple, accessible and affordable savings vehicle for their children."