Research shows children are on their own when it comes to future finances

Teachers Assurance, provider of savings, investments and insurance in the UK, has today announced the results of their recent research into the attitudes and savings habits of parents on behalf of their children. The survey, carried out by independent specialist Opinion Matters, questioned over 2,000 UK adults in May 2014 about the efforts they were making to save for their children. 

Teachers Assurance found that just 38% of parents were saving on behalf of their children and that in the majority of cases, parents were largely unprepared for the later costs of life that children will experience. This included university fees, the cost of buying a first home and even the associated costs of purchasing their first car. Of the 57% of parents who were saving for children in the child’s own name, 37% of savers were contributing between £1 and £100 annually, amounting to less than £2,000 by the child’s 18th birthday.

With regards to the cost of children’s future living, the Teachers Assurance research found that many parents were in touch with associated costs but were not planning to contribute in large amounts. While 65% of parents believed that attending university would cost their child over £5,000, 33% stated they had no intention of giving their child any money towards their fees, while just 21% planned to provide £5,000 or more. With the average cost of university fees ever mounting and currently standing at £10,133 per year over an average three year duration, children could be looking at significant debts even before living or other associated costs are considered.

When it came to children purchasing a first home, 76% of those surveyed believed a deposit would cost over £5,000 yet 38% of parents weren’t planning to contribute to this expense. Currently, the average first home deposit is £29,400 and is rising each year with the cost of housing. Children will need to start saving early if they want to get on the property ladder. When questioned about travelling the world, children were even less likely to receive a financial gift from their parents, as 55% said they wouldn’t contribute to these expenses.

Where parents were saving for their children, the Teachers Assurance research found they felt strongly that any savings contributed were not to be spent on items other than those planned. 39% of those saving for their children stated they would dictate to the child where all saved money was to be spent, while just 17% would let their children decide.

Of those who weren’t able to save for their children, the majority (65%) expressed that financial strains meant they couldn’t afford to, with a further 30% adding that they didn’t feel the money saved now would be worth a relative amount in the future. 16% also felt that setting up a plan for their children would be too complex.

Teachers Assurance offers a range of savings and investments for children, with tax efficient plans starting from just £25 per month. Through these plans, children are able to access the money once they reach a specified age, which is dependent on the plan type selected. For those parents who would like to save on behalf of their children yet retain control of the proceeds, Teachers Assurance also offers a range of products designed to suit their needs. This includes tax efficient plans starting from just £25 per month.

About Teachers Assurance

    -   Teachers Assurance manages circa £1 billion on behalf of its Members and customers

   -    Teachers Assurance was set up in 1877

    -   Teachers Assurance does not offer financial advice

   -    Originally set up to support teachers and their families, today the company offers a range of savings, investments and insurance products for individuals and families across the UK

Case studies available on request

For further information:

Laura Bentham, PR, Digital Marketing and Campaigns Team Leader

01202 435 112

lbentham@teachersassurance.co.uk

teachersassurance.co.uk/press

Teachers Assurance is a trading name of Teachers Provident Society Limited (TPS), an incorporated friendly society No. 372F.  Authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority, entered on the Financial Services register no. 110009.  Registered in England and Wales.  Registered Office: Tringham House, Deansleigh Road, Bournemouth, BH7 7DT. 2001314                                                                          

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