Credit, collections & insolvency news
Parents are raiding their kids’ savings to help cover the cost of rising household bills and to pay down debts, according to research by leading financial mutual, Scottish Friendly.
A survey of 1,000 UK parents found more than one in five (22%) have withdrawn money from their children’s savings.
The majority of those (64%) have done so in the last 12 months as families cope with high inflation and rising interest rates.
Parents have used their children’s savings to pay household bills (33%), cover unexpected costs (32%), pay off debts (20%), buy birthday or Christmas presents (19%) and to go on holiday (13%).
Household budgets in the UK continue to be stretched and Scottish Friendly’s data shows that the number of Junior ISAs opened by parents for their kids has fallen over the past year.
The survey reveals that the majority (87%) of parents are worried about how much they should be saving for their children.
But while four in ten (40%) admit they could afford to regularly save more, over half 54% say they have more money set aside for their kids than they do themselves.
In fact, two thirds (66%) of parents are more motivated to save for their children than they are for themselves.
Kevin Brown, Savings Specialist at Scottish Friendly, said “Borrowing money from their children’s savings is a last resort for parents desperately trying to make ends meet.”
“Inflation may be slowing but living costs are still rising and that’s pushing more families into the red. Budgeting only gets you so far and if borrowing money isn’t an option, then dipping into your family’s savings is a difficult choice many are being forced to make.”
“As a general rule, it’s important for households to have some money held in cash that they can easily-access in case of emergency without penalty and free of charge. Times are tough for a lot of families at the moment, but things will get better and it’s important to keep one eye on the future and how to make the most of your money for your children.”
