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A new study from Nationwide Building Society reveals that eight in 10 parents are putting money into a savings account or other type of pot for their children, expecting to save an average of £7,000 by the time their kids turn 18 – £33.72 per month.
One in 20 are even more generous, aiming to give their child £10,000 or more, while 14% expect to save up just £1,000 or less. This doesn't seem to be related to parental salaries, either, as 77% of parents earning £15,000 or less are setting money aside for their child's future.
Despite all this generosity, 38% of parents worry that their kids will use the money unwisely. Because of this, many are saving with a specific goal in mind; 45% are putting money aside for their child's university education, 35% for their offspring's first home, and 30% are earmarking the money for a first car.
And yet, 25% of parents have never actually talked to their children about the benefits of saving, which might indeed be contributing to their concerns. With a choice between a children's savings account, Junior ISA or even a simple piggy bank – or indeed all of the above – there are plenty of ways for parents to teach their offspring the value of saving.
Children's savings accounts may hand over the reins a little sooner, but this can be a great way to teach your little darling about interest and the benefits of patience when it comes to saving towards a goal. Alternatively, a Junior ISA would allow your child to make use of both the Junior ISA allowance and an adult ISA allowance between the ages of 16 and 18.
If you're really concerned about what your child might do with the money, you could start your own savings pot – a regular saver is great to start with, and then a fixed rate bond until they're 18 or over. Once the time is right, you could choose to transfer the money (just beware of Governmental gifting restrictions) or pay for their university fees/car/deposit directly.
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