Which saving methods do you use?
Parents are saving around £3.79 billion a year for their children with the average family putting aside £54 a month, says new research from Castle Trust.
However, findings show that out of those polled only 44 per cent of families are able to save regularly with just over one in five not saving at all.
The housing investment and shared equity mortgage provider, conducted a nationwide survey among parents with children under 18, and found that mums and dads are trying their best to help save up for their children’s future.
The Bank of Mum and Dad is always open for business with nearly £3.8 billion being deposited a year by parents of under 18s
The most popular reason for saving is to contribute to their children’s education with 30 per cent of parents putting money aside for university or school costs, while saving for a first home is the next most popular reason chosen by 13 per cent.
Castle Trust is urging those who save to get the most from their money as its study shows that parents save money for their child in various ways.
The most popular savings vehicle is a bank or building society account, used by more than 56 per cent of those who save, with 23 per cent using Cash ISAs and 11 per cent using Cash Junior ISAs. Just one in twenty use stocks and shares, Junior ISAs, and seven per cent stocks and shares ISAs, despite cash not providing the best returns over the long term.
Sean Oldfield, Chief Executive Officer at Castle Trust said: “The Bank of Mum and Dad is always open for business with nearly £3.8 billion being deposited a year by parents of under 18s.
“The issue is that investing in bonds, equities, savings accounts or other products usually aims to beat inflation but parents saving for their children’s first home would benefit from beating house price inflation instead.
“A fixed-term tax efficient investment linked to housing can be used very effectively when you have a specific goal of saving for your children’s future home.”
Findings also show how saving for children varies across the country, as 57 per cent of parents in both London and Eastern England are most likely to save regularly compared to only 29 per cent in Wales.
Castle Trust is offering new investment products called HouSAs which enable parents to invest efficiently in the national housing market via Junior ISAs or ISAs and which provide returns in excess of the Halifax House Price Index. It has launched a guide to saving for children which is available at www.castletrust.co.uk/savingforchildren
Castle Trust’s Growth and Income HouSAs are suitable for stocks and shares ISAs and Junior ISAs and can be taken out for terms of three, five or ten years.
For more information, visit www.castletrust.co.uk
Which saving methods do you find to be the most beneficial? Tell us in the comments below or tweet us @FemaleFirst_UK
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