If you were around in the 80’s, you can’t help but remember the Simply Red song “Money's Too Tight”. We're talkin' about money, money… Oh money, money, money, money. Metaphorically speaking, money was and always will be ‘tight’ and is indeed for so many people now as it was then. With rising financial pressures and measures being taken by the Government to slash their support, it’s no wonder there is little spare cash left over to allow for savings.
Many parents hope for a bright future for their children, but money, or rather a lack of it, is hampering any ambitions of being able to help out financially in the future, according to research by Nationwide. Is there any wonder when parents' budgets are pushed to the brink amid the huge cost of raising children, with indebted parents owing more than £17,755 on average analysis by PayPlan reveals. If that sounds a lot, insurer LV has showed the sky-high cost of bringing up a child to the age of 21 now amounts to a staggering £231,843.
Many parents fear they can’t provide sufficient financial help for their children with more than one in three worrying about not saving enough for their children and one in eight saying they worry about whether their child will ever be able to afford a home of their own or even be able to manage financially on their own two feet.
Despite these concerns, three quarters say that money is just too tight to afford a piggy bank for their children. Almost half of parents do put money aside occasionally and a further three in ten save regularly each week or month with an average annual amount of £561.11 being saved. But, as wages stagnate and costs continue to creep up, can we expect the worrying trend to get much worse and should the Government give parents more support for what is the most financially draining time in anyone’s life?
Regular saving for your child’s future can mount up over the years, particularly if you put your money into tax-free savings. Even if you can’t afford much, if you get into a savings habit with your child and a responsible attitude to money, you stand a better chance to help them out in the future. But, with 17 million people of working age across Britain who have less than £100 in savings and six in 10 households struggling to make ends meet, the reality is a far cry from the aspirations many parents have.
If you can put aside just a couple of pounds a month, there are a few ways starting with as little as £1. To help you find what’s best for you, Which? has a money compare table you can get started with. A Children’s savings account is a great way for children to learn how to manage money and help get kids into a savings habit as they can start managing their own account once they reach the age of seven. Your child can have a Junior ISA if they are under 18 and live in the UK or NS&I Children’s Bonds, which are good savings option because you pay no tax on the interest earned. And, don’t forget about Child Trust Fund accounts if your child was born between 1 September 2002 and 2 January 2011, which have now been replaced by Junior ISAs.