Saving Plans

Britons 'turn to nearest and dearest for money advise

Grown up children 'financially dependent'



Grown up children are increasingly making dents in their parents' savings, a financial services company has claimed.

A new study from Scottish Widows revealed that instead of being financially independent, many adult children are continuing to ask their parents for money after they have left home, with 39 per cent of parents saying they have dipped into their savings to help their offspring out.

Parents give their children an average of £12,300, to cover costs such as a house purchase or deposit, buying a car or paying for furnishings or home improvements, adding up to a total "savings sap" of £55 billion, or around six per cent of the total UK cash savings market, the firm said.

And this looks set to continue, with 49 per cent of the parents who have already given their children money expecting to have to give them more in the future.

Savings expert at Scottish Widows Anne Young said: "Our research shows that parental responsibility no longer ends when your children reach adulthood but lasts for many years after that.

She added: "We recommend they try to prepare for the possibility of this happening by creating their own Savings Sap fund - but they might want to keep it secret from their children until they need to use it."

A survey released last week by Abbey found that 9.7 per cent of first-time buyers expect their parents to offer them financial help when they are buying their first home, although this is down from 23 per cent six months ago.

"Significant shift" in UK savings attitude

The Children's Mutual has welcomed new figures from HM Revenue & Customs which show that more than 2.6 million Child Trust Fund (CTF) savings and investment accounts are now open.

Double the number of parents have committed to saving regularly over the long-term for their children, the CTF provider claims, with the average monthly payments increasing by 50 per cent from £15 pre-CTF to £24 now.

David White, chief executive of the Children's Mutual, said that the latest figures showed the start of "a significant shift" in the nation's attitudes towards saving for the future.

He commented: "Family purse strings are under more pressure than ever with many parents being expected to pay for higher education and help their children onto the property ladder.

"The CTF could mean that most teenagers in years to come will be better prepared for their financial future."

He added that allowing for an initial government voucher of £250 and a further £250 top-up at age seven, plus the average monthly payment, a child could receive a lump sum of around £9,750 when they reach 18, which is 40 per cent of the cost of the average wedding.

The Children's Mutual claims that it is the only UK company which specialises exclusively in savings for children.

Britons 'plodding along' with savings

People should be "more aware" of their savings and try harder to get the best deal, an expert has claimed.

Lisa Taylor, a spokesperson for finance site Moneyfacts.co.uk, said that people were more inclined to find the best rates when they were borrowing money rather than saving it and with savings, people tended to "plod along".

However, it was important people got the best deal for their savings, especially if they had a large amount of money, she added.

Her comments came after new research from Moneyfacts.co.uk, commissioned by investment company Managing Partners Limited, discovered that just 42 per cent of savings accounts increased their rates by 0.5 per cent between November 9th 2006 and February 10th 2007 to match the base rate rise.

Ms Taylor said that some of the branch paying accounts were offering rates which were "not very good at all".

"Over the longer run, your savings are going to go down with inflation eating away at them," she warned.

British consumers put £136 billion away in savings in 2006, figures from Unbiased.co.uk show, £25 billion more than during the previous year.

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