Parents 'cannot afford' to save for children

More than a third of parents are not contributing to accounts with the best savings rates to give their children a nestegg.

Research by the Co-operative Banking Group revealed that 36 per cent of parents do not have a savings account set up for their children.

Furthermore, the average parent who does save is putting away less than £10 a month, with fewer than one in seven contributing more than £50 a month.

However, 65 per cent claimed that they wished they could save more than they can currently afford to, with many expressing guilt due to the increases in tuition fees and deposits for first homes.

"It's a tricky time for parents as they try to do their best for their child's future, while providing for them at a time when living costs are continually rising," explained James Hillon, head of savings at The Co-operative Bank, adding that just £10 a month is better than nothing.

Yvonne Goodwin, managing director of Yvonne Goodwin Wealth Management Ltd, recently said that parents must teach children how to budget so that they do not get into debt when they leave home.

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2011-09-27 13:52:51 © Moneyextra.com