N&P conducts child’s savings account research
Recent analysis by Norwich and Peterborough Building Society (N&P) found that in 2007, savers put on average £112 a month into a child’s savings account.
This figure equates to £1,346 a year or a nest egg of over £24,228 if money is saved regularly every year until the child reaches the age of 18. The highest average amounts were saved in August (£153.09) and December (£129.72) while the lowest were saved in February (£93.43) and September (£95.08).
The account data analysed reflects the savings habits of children, their parents and their grandparents – highlighting an all round view of the amount saved for each child throughout 2007.
The high amount saved by those who made regular monthly payments in August (£153.09) could be explained by additional income for children from chores, summer work and holiday money from relatives and grandparents. This bumper month is predictably followed by a low in September (£95.08) when children and their parents have less money to save due to a new school year and associated expenses.
February (£93.43) saw the second lowest regular savings amount – possibly reflecting restricted spare cash following a higher savings level in December (£129.72) and January (£103.97) as children credited their accounts with Christmas present money. The rollover expense of a new term’s school fees and costs could also be reflected here.
Gary Lacey, group product manager at N&P, said: “With so much doom and gloom surrounding debt, it is encouraging to see such a strong savings ethic from, and for, the young. This data reveals that not only are regular savers potentially saving their entire children’s benefit payment each year (£941.20 for a first child) but also putting in over £400 more. This is great news for the future of UK savings.
“While these figures are encouraging, more still needs to be done to highlight the benefits of saving to those who either don’t save at all, or who do so rarely. Actively putting aside regular amounts instils a positive savings habit in children and adults alike, and can really add up in the long run.”