Parents’ biggest savings goal is to help their child onto the property ladder
Shepherds Friendly reveals the most popular savings goals parents have for their children are helping towards a housing deposit and university fees
It’s natural as a parent to want to save money for your children, but what is the most important thing parents want to save for to help their children?
A survey of 2,000 parents by Shepherds Friendly has revealed that helping towards the cost of a deposit on their first home is the most popular single savings goal for parents (32.8%).
Other important savings to parents include university fees and the cost of a first car. However, an even higher proportion of parents (34.2%) did not have any savings goal in mind and would rather their child spend any savings however they wanted to.
The survey found that parents’ main savings goals for their children were:
- Housing deposit (32.8%)
- University fees/higher education (20.7%)
- First car (10.4%)
- Other (1.8%)
- No savings goal/spend it on whatever they like (34.2%)
Saving for children is still seen as important by parents
The research also found that most parents still placed a high level of importance on saving for their child’s future. Despite the costs of raising a child, the survey found that 64.45% of parents thought that saving money for their child’s future was either ‘important’ or ‘very important’.
However, despite many parents stating that they thought saving for their child’s future was important, less than half (43.59%) said that they would consider opening a child savings plan, suggesting that there are other barriers stopping them from saving in this way.
Parents have the option to open a Junior ISA for their child and contribute a regular amount each month, to build up a savings pot for them, which can be opened from just £10 a month. Family and friends can also contribute on behalf of the child and any capital growth is tax free. The earlier you start to save for your child’s future, the more chance you have reaching the savings goal you have in mind.
A Shepherds Friendly spokesperson said: “Starting to save for your child from the earliest opportunity possible can help you to reach the savings goals that you have for them, by saving regularly over the long-term.
“When saving for your children, think about what you would like your child to use their savings towards, and carry out some research to find out how much the average cost of the goal is today. This can help you to decide how much you want to save for your child. Focusing on a specific goal can help you to set realistic saving goals.
“If you’ve got a set savings goal for your child, it is worth taking the time to think about the average cost of the savings goal you have in mind, and work out how much you need to save, over how many years, in order to make the savings goal a reality.”
Shepherds Friendly has created a guide to discover the average cost of common saving goals and how much you would need to save to reach a specific savings goal you have for your child. The calculation can help you to discover what you need to save each month, and over how many years to get to that goal.
Do you have a saving’s account for your child’s future? Have you ever thought about the money they may need as they reach adulthood?
When you take out an investment product with us your capital is at risk and you may get back less than you have put in.
All references to taxation are to UK taxation and are based on Shepherds Friendly Society's understanding of current legislation. HM Revenue and Customs may change the tax status of a Junior ISA in the future.