Calls for saving scheme to be extended

The expansion of a government scheme for matching the amount of money saved by lower-income Britons could provide a real boost to the nation’s savings, it has been claimed.

The Tax Incentivised Savings Association (TISA) said that the Saving Gateway initiative, which was introduced to encourage saving in households that are not engaged with mainstream financial services, could provide valuable incentives if it is rolled out on a national level.

Tony Vine-Lott, director general of TISA, said that Saving Gateway is “the next logical step” on a path begun by individual savings accounts and child trust funds.

“By targeting those who aren’t saving and providing new, simple incentives, we believe that we can realise nearly two million new savers,” he commented.

TISA said that it has been taking “a leading role” to help the government create and trial the scheme.

The government began piloting Saving Gateway in 2001.

Tags: saving, mainstream financial services, lower-income britons, Financial services, child, logical step, Lott

Parents should open bank accounts for children ‘as early as possible’

Providing children with bank accounts as early in life as possible will enable them to have a better understanding of money say independent financial advisors.

MDM Associates said that opening a bank account as early as possible parents can then talk children through statements and show them where interest has been added.

Older children could receive an account with a debit card said the company.

Lisanne Mealing, managing director of MDM Associates, said: “That then starts to give them the idea of some financial responsibility – you’re trusting them because they’ll have access to that account themselves.”

Providing monthly pocket money to children can also be a good way to teach children about budgeting, she added.

According to an article on the Times Online, a recent survey by NatWest suggests that 51 per cent of young people want more advice from parents about how to manage money.

Many respondents said they were frustrated by well-trodden cliches such as ‘money doesn’t grow on trees’.

Tags: recent survey, respondents, child, Business Finance, MDM, cent, idea

Parents should encourage children to save

Parents should highlight the costs of raising a family and encourage children to begin saving from an early age, claims an insurance company.

Liverpool Victoria (LV) said that pocket money – which on average currently amounts to £5,469 from the age of five to 18 – could turn into “quite a nice sum” if invested into a savings account as the child grows up.

Lucy Pope, media relations manager for Liverpool Victoria, said: “It’s really good for the child to actually see how things are growing, and obviously with the onset of technology children can be more savvy with online savings.”

“I think actually being able to see their money grow and things like that is a really nice way of bringing it all to life,” she concluded.

According to the most recent LV annual Cost of a Child survey, the average cost of raising a child up to the age of 21 is £186,000.

The most expensive costs are estimated as over £47,000 spent

Tags: average cost of raising a child, lv annual cost, nice sum, Social Issues, cost of raising a child, child, savings account, Insurance

London’s ’stingy’ parents best at saving for kids’ futures

New research of parents’ spending habits by Engage Mutual suggests there is a direct trade-off between giving children generous pocket money allowances and saving for their future.

The study reveals that London is the bottom of England’s pocket money league – with just a third of the capital’s parents giving their children an allowance – but conversely it is the region where parents are most likely to save for their children’s future, with four out of ten doing so.

By comparison, in the East Midlands fewer than a fifth of parents make such provisions and yet they are the most generous on the pocket money front, with 55 per cent dishing out regular allowances.

Scottish parents, meanwhile, scored consistently low on both fronts, with only 37 per cent handing out pocket money and 40 per cent setting aside savings.

On a national level the proportion of parents saving for their child’s future stands at 32 per cent, its highest level for over a year.

Karl Elliott, 3GB spokesperson for Engage Mutual, commented: “In a credit card society that is driven by a have-it-now culture, it is pleasing that so many parents are saving for their kid’s future”.

He added: “Those children in areas where parents are the tightest on pocket money will thank them in years to come when they enjoy the benefits of a healthy, matured savings fund.”

Tags: Allowance (money), highest level, percentage, london, generous pocket money, money, league

Both parents forced to work

As the cost of running a home continues to grow, new research shows that millions of mothers are being forced to return to work so that they can keep up with bill payments.

Scottish Widows has revealed that 11 million households in the UK are dependent on two salaries to keep up repayments, while the average household with two children is £100,000 in debt.

That figure stands at £20,000 more than a household without children and it is forcing both mother and father to go out and work.

“This reliance on two incomes to buy and run the family home means millions of households are effectively doubling the risk of financial hardship should one of bread winners become unable to work,” said Richard Jones, Scottish Widows’ interim protection market director.

Figures from the research show that many families are struggling due to the levels of consumer debt they have, with a rise in the number of children being linked to the size of the debt.

Almost half (47 per cent) of families have a mortgage, with the debt from this rising from an average of £66,600 for a couple with no children, to £80,200 for a couple with three.

Around 63 per cent have a store or credit card, with the debt for a childless couple standing at £4,300 and growing for those with three children to £6,510.

Parents and prospective parents are advised to set up a savings fund to protect themselves and their children should their circumstances change.

Tags: child, Scottish, new research, debt, payments.scottish widows, incomes, GBP, bread winners

Child trust funds proving popular

More than 2.6 million children in the UK now hold a child trust fund (CTF) with the scheme proving popular among parents, according to the economic secretary.

Ed Balls said the results were “encouraging” and pointed out that around three quarters of the accounts had been opened up by parents with little prompting from the government, showing that they are looking after the financial future of their children.

Mr Balls said that HM Revenue & Customs was planning to remind all new parents of the opportunity to set up a CTF within their child’s first eight months, if parents have not done it themselves.

“I want to encourage parents, grandparents and whole families to use the Child Trust Fund not just as a saving tool but as a way of teaching children about money and savings,” the economic secretary said.

CTFs were introduced in 2002 as a savings tool for all children born after September 1st of that year.

The government provides a £250 voucher to start off the fund and then, when the child reaches seven, adds a further £250 on top.

Tags: scheme, savings tool, fund, CTFs, saving, voucher, new parents, child

Single parents struggle to save for kids

Single parents are finding it difficult to manage their banking, meaning that few are able to put money aside for their children.

According to Engage Mutual Assurance, only one in six lone parents make regular payments into a savings account for their children.

A study carried out by the firm found that married couples are much more likely to save for their child’s future, with 42 per cent making regular payments compared to just 17 per cent of single parents.

This is despite increased child benefit and child tax credit which were announced during the last Budget.

“Rising childcare and education costs, along with increases in the cost of living, mean that today’s parents are feeling growing financial pressures in bringing up children,” said Engage spokesman Karl Elliott.

“For lone parents, living on a single income, these pressures may be especially hard to deal with.

“However, parents should not despair of saving for their children’s future. Tax exempt child savings plans and Child Trust Funds provide simple and affordable means to saving for children,” he added.

Parents are advised to put at least some money aside on a regular basis to help pay for their child’s education and perhaps give them a starting point as they try to make their way onto the property ladder.

Tags: today, starting, way, exempt child savings, Trust, child

Kids’ rooms are worth £14bn

The average child in the UK is now worth around £1,260 due to the number of gadgets present in his or her bedroom.

In total, the UK’s children have £14 billion worth of goods in their rooms, with one in ten parents admitting they have spent £2,500 on keeping their youngsters entertained.

Co-operative Insurance (CIS) carried out research into the matter and found that although parents are keen to keep giving their children the latest gadgets, very few update their insurance policy at the same rate.

“Many parents simply do not realise just how valuable the contents of their children’s rooms are,” said David Neave from CIS.

“It is important for people to regularly review the value of their home contents and if necessary increase the level of cover to ensure that it is adequate.”

The most common electrical item to be found in a child’s bedroom is a TV, with 21 per cent of parents saying they allow their child to have one so that they can watch their own programmes undisturbed.

The CIS research also reveals portable gadgets are becoming more popular among children. Around 60 per cent now carry a mobile telephone.

Mr Neave said that this too should lead to parents reconsidering their insurance policies.

“Parents should also ensure that they have personal possessions cover for those items which their children take out of the home; such cover can be provided simply, by adding it to the contents cover,” he added.

Tags: child, realise, uk, item, personal possessions