Parents on low income save more for their children
Families on low earnings may be finding it hard to make ends meet but they are working harder than their better-off equivalents to put money aside for their offspring.
Engage Mutual, the child savings provider, has established that lower income families are adding to their children’s Child Trust Funds (CTF) by a higher proportion of their incomes than higher income parents.
Families on a higher income are spending their money on food, leisure activities, holidays and social events. Those with an income of over £39,000 a year spend more than twice the amount on food than those earning £10,000 or less. Consequently, it is parents on lower incomes that are making the biggest sacrifices for their children and their future.
The research shows that lower income families invest 1.1% of their post-tax monthly salary into their child’s CTF – twice the amount saved by higher income families, who set aside just 0.6% of their monthly salary.
A spokesperson for Engage Mutual said with over 2.7 million CTF accounts open in the UK to date, experience suggests that lower income families are leading by example.
Finally, research by CreditExpert has established that 31% of British grandparents are providing financial assistance to their grandchildren in order to get them on to the property ladder. 11% of British grandparents have expressed concern that the child’s parents are unable to provide adequate financial support.