Investing
Nearly half of parents cannot afford to save for their children
Financial pressures mean nearly half of parents are unable to save any money for their children’s future, a study has revealed.
Of the 45 per cent of parents who do not save regularly for expenses such as university fees or a house deposit, two thirds said they simply could not afford to do so.
More than one in ten parents said they would rather spend money on their child now than save for their future expenses, the research by YouGov and Family Investments found.
It also revealed that only 23 per cent of parents had set up a junior ISA for their child, suggesting a high number are missing out on a tax-free way of saving.
Junior ISAs are savings vehicles specifically designed to save for a child in a tax-efficient way.
Parents, grandparents and friends alike can invest up to £3,840 per year – increasing to £4,000 from 1 July – on behalf of a child in stocks and shares, cash or a mixture of the two.
Kate Moore, head of savings and investments at Family Investments, said: “We understand the financial pressures of parenthood, but one of the great things about a junior ISA is that once it is set up, anyone can contribute for the child.
“It’s perfect for grandparents and godparents who want to help out.”
The survey found that 21 per cent of parents who do not save into a junior ISA are contributing to other savings for their child, while 28 per cent could not afford to save into one. Nine per cent did not know what a junior ISA was.
