As many as one in two parents do not give their children pocket money, preferring instead to save for their off springs’ future, according to new research by engage Mutual Assurance

At a time when the costs of raising a child is increasing at a rate faster than inflation¹, and with young adults facing rises in the cost of education and house prices, the latest findings show that 48 percent of parents with children under 16 are not giving them pocket money. Instead, 41 percent prefer to make regular payments into savings vehicles for their children’s future².

As part of its 3GB campaign³ examining how money implicates family relationships, with the middle generation working harder to support children and elderly relatives, engage Mutual Assurance asked a GB representative sample of 948 parents with children under the age of 16 how they had helped their children financially in the last six months.

Key Findings

Pocket Money

• Just 34 percent of parents who gave their children pocket money in the last six months also made regular payments into a savings account for their children
• Parents in the North East are most likely to give their young children an allowance (65%) whilst children in the West Country are least likely to receive pocket money, just four in ten (39%) of their parents giving them an allowance
• 48 percent of parents with children under 16 did not give them pocket money or an allowance in the last six months.

Saving for the Future

• 41 percent of parents with children under 16 made regular payments into their child’s savings account in the last 6 months, which is encouraging given figures from March 2006, which showed that as few as 27 percent of parents were saving for their children’s future².
• Fathers are most savings conscious, 45 percent regularly paying into their child’s savings account compared to 39 percent of mothers.

“With today’s children facing increasing costs of university and living when they reach adulthood, it is important that parents make an effort to prepare them for the financial challenges of adulthood. However, the choice between treating children today and giving them a helping hand in the future can be a fine balance.”

“Giving younger children pocket money not only helps to educate them about the value of money, but also teaches them important life skills such as saving and budgeting. On the other hand It is also important that parents invest money for their children’s future. By contributing little and often to government Child Trust Funds, parents and other relatives could save a useful sum tax freeto help their children get a foot on the ladder when they reach adulthood.”

Footnotes

¹ BBC Online, 10th November 2006, http://news.bbc.co.uk/1/hi/business/6134926.stm

²In March 2006, HBOS reported that 73% of parents are not saving for their child’s future, http://www.hbosplc.com/media/pressreleases/articles/halifax/2006-03-30-00.asp?fs=/media/press_releases.asp

³ ‘3GB’ is engage’s Three Generation Britain research index. Research was conducted by YouGov across a GB representative of 4,678 adults (including 948 parents with children under 16) in October 2006. The research explores the financial relationships of care between the generations and investigates shifts in traditional financial provision.

1.This research was undertaken by YouGov on behalf of engage Mutual Assurance. The survey was conducted on between the 5th and 9th October 2006 across a representative GB sample of 4,640.

2.If using this article on a website, please link to www.engagemutual.com using the following hyperlink text : http://www.engagemutual.com engage Mutual Assurance - meeting the changing needs of today’s modern families

3. engage Mutual Assurance is a trading style of Homeowners Friendly Society (HFSL) and it’s wholly-owned subsidiary engage Mutual Funds Limited (EMFL).

4. engage Mutual Funds Limited (EMFL) is a provider of the Child Trust Fund direct and in partnership with partners including Legal and General, ASDA and Debenhams stores.

5.The organisation is title sponsor of the engage Super League – which sees 12 teams from across the UK and France battling for a place in the engage Super League Grand Final at Old Trafford stadium in Manchester. The teams are Leeds Rhinos, Wigan Warriors, Bradford Bulls, Castleford Tigers, St Helens, Huddersfield Giants, Hull FC, Salford City Reds, Wakefield Trinity Wildcats, Warrington Wolves, London based Harlequins RL and French team Catalans Dragons.

6. engageis proud to partner a charity which shares our consideration for balancing risk and reward - Smart Risk Foundation UK. It helps youngsters across the UK to identify the risks in their everyday lives in the smartest way, so that they can enjoy life to the fullest. Smart Risk Foundation’s registered charity number is 1096081, www.smartrisk.org.uk.

7. engage Mutual Assurance is headline sponsor of the engage International Open 2006 and the engage Ladies World Matchplay 2007, both part of the World Bowls Tour.

8.engage supports mutuality, friendly societies and the regional financial services industry through links with the Association of Mutual Insurers, the Association of Friendly Societies, Mutuo and Leeds Financial Services Initiative.

9.Established in 1980, Homeowners Friendly Society Limited (HFSL) is Registered and Incorporated under the Friendly Societies Act 1992, Reg.No.964F, it’s wholly owned subsidiary engage Mutual Funds Limited (eMFL) is Registered in England No 3224780. Both are authorised and regulated by the Financial Services Authority (FSA).

10. Homeowners Friendly Society Limited's FSA Register number is 110072 and engage Mutual Funds Limited’s FSA Register number is 181487. You can check this on the FSA's Register by visiting the FSA's website www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234