Bad saving habits passed on by parents

According to new research some 6 million children are not saving.

08:19 05 May 2004

According to new research some 6 million children are not saving.

Figures show 51 per cent of parents are not making children under the age of 16 put aside a portion of their pocket money or birthday cash into piggy banks.

The research conducted by NOP World for Halifax Financial Services also showed that almost a third of parents, 31 per cent, say they do not even encourage their children to save.

"We need to instil the importance of saving in our children from as early an age as possible," says Ray Milne, head of Halifax Financial Services. "Any parent who isn't already doing so should think about the long-term financial health of their children."

Consequently, the government initiated Child Trust Fund could be undermined if parental attitudes do not change.

As it stands, around 3.6 million children do not currently own savings accounts. With the national savings gap, between what we are saving and what we need to save for retirement, currently equating to around 30 billion a year, the idea that a third of the population may grow up not saving makes for a worrying future.

Mr Milne added: "Some basic financial education now will get them in to habits that will serve them well through many years to come."

As children learn by example, he advises parents to include children when paying for large items, like a holiday or a car, "so that they can see how the financial ideas you pass on to them are how life is in the grown-up world."