Do You Raid Your Children’s Savings Accounts?

As families struggle with their finances, many are turning to borrowing money from their children’s savings accounts to help out. Are you such a parent?

Research by MoneySupermarket.com reveals that nearly a third of parents with children under 18 have taken, or borrowed money from their child’s piggy bank or savings account; two thirds of them had done so in the last twelve months.

Some parents have taken over £100 from their child, although the average is just over £50.

A variety of reasons are behind taking the money, not just to pay bills. Other reasons include a need for small change to pay for such as parking, petrol money, grocery shopping or a takeaway. Some even take it so that can take their child out for a treat, a little interesting in that the money used for the treat is coming from the child.

One in ten raid their kids savings on special occasions such as Christmas or summer holidays.

Parents are also using their children as an easy cash option, rather than having to deal with banks. By doing so they feel they can being stung by fees that their bank/ credit card provider would charge.

Kevin Mountford, head of banking at MoneySupermarket said: “It’s a sign of the times when parents feeling the economic pinch have no resort but to dip into their children’s savings or piggy bank.”

He added: “However, reviewing all of your outgoings to see where you can get better value and free up vital cash is essential. The savings made can literally add up to hundreds of pounds over the course of the year, a great way of giving yourself a bit of breathing room. To help boost your child’s savings, and to prevent the temptation of dipping into them, locking money away in a children’s savings account rather than their piggy bank is a  good idea.”

MoneyHighStreet comments: “To coin a phrase from a well known supermarket, ‘Every little helps’ but it does seem a little harsh to be dipping into your children’s savings accounts to help with family finances.

“Clearly though as the economy continues to struggle so too are many families.

“Setting a budget and ensuring you can manage your income and expenses is vital. By doing so not only will you have to borrow money from children, hopefully it will help you avoid falling into deeper debt.

“Rather than borrow money can you make money at all? How about getting rid of some of the clutter in your house. Selling it on eBay or perhaps going to a boot sale can often generate more money than you might initially think. Takes a little bit of effort but the return can be quite rewarding.

“Do you have a savings account of your own? Getting into a saving habit is extremely helpful. Clearly for many saving is not easy but by trying to save even a small amount each month you’ll be surprised how quickly you can build up at least a good reserve to cover those unexpected expenses.

“Having placed your savings in a high interest account, you will need to regularly reassess your returns and if need be switch to another account to get the best possible deal. That goes for adult or children’s savings accounts.”