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Children becoming a generation of mini savers

Children becoming a generation of mini savers

Category: Savings

Updated: 07/04/2014
First Published: 07/04/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Getting into the savings habit from an early age is something that should always be encouraged, and luckily it seems that a lot of children are on the right lines. In fact, research from Santander has found that an impressive 94% of all 11-16 year olds now regularly put money aside for their future, amounting to £28 per month – or an average of £336 per year.

This means that children save just over half of their average monthly income – currently £55 per month, primarily made up of money from parents (£26) and a part-time job (£15) – with 47% making regular deposits into a savings account. Happily, it seems that many of them have long-term aspirations too.

While 25% are saving for clothes or personal items and 22% are saving for the latest gadget, over a quarter (26%) are saving for college or university fees and 8% are even saving for a house, and a particularly forward-looking 1% of those surveyed are putting money aside for their pension. Not bad for forward planning…

Comparing these figures to previous generations, it would seem that today's children are becoming a nation of savvy savers with them far more likely to start saving than their parents. Just 83% of adults questioned saved money when they were their child's age and just 21% made regular deposits into a savings account, with 17% not saving any money at all.

Reza Attar-Zadeh, director of retail products for Santander UK, said: "The extraordinary economic climate of recent years is shaping youngsters' attitudes towards money. It's clear that many are more financially astute than grown-ups may give them credit for, and are adopting a positive approach to spending and saving their money."

It's encouraging research and means a lot of children are putting themselves in good stead for the future, particularly for those with long-term goals in mind. Compound interest will add up over the years and means they could be left with a tidy sum when they come to use that cash, and with savings being increasingly vital for the likes of house deposits and retirement income it's great to see that so many children are getting into the savings habit early.

But, to really make the most of those good intentions, getting the right children's savings account is key. Having a junior ISA (or child trust fund for those born between September 2002 and January 2011) should be a top priority as it means interest can be earned entirely tax-free, and because they can't be accessed until the child hits 18 there'll be no temptation to blow it on the latest piece of tech.

Other types of children's savings account should be considered too, thereby offering additional flexibility whilst meaning your children can access the best rates. Regular savings accounts could be ideal and the top account from Halifax currently offers 6% in interest, and even variable savings accounts can be found that offer 3%.

There'll be nothing better than your children seeing their savings habit pay off with a balance that starts to creep up, so make sure to find the best rates and see how proactive they are in putting money away – they might just surprise you.

What next?

Find a junior ISA

Children's savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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