Research from Bacs, a Direct Debit subsidiary, indicates that household bills skyrocketed from a total of £5,834 a year in 2007 to £8,202 in 2012. The jump means the average family is spending nearly £2,400 more per year on bills than they were just five years ago.
Arabela Velasco of CompareJuniorISA.com, a website which seeks make children’s savings easier to understand for parents, said: "The effect of the recession on household budgets has been devastating. Higher cost of living coupled with stagnant or slow-rising wages have made nearly impossible financial demands on families in the here and now, often at the expense of their children’s future. However, if your children are young, you can get away with saving much less each month because compound interest works in your favour. Even if it’s just £10 or £20 going into savings every month, your family can meet their needs today and provide for the future."
Normal household bills such as water and energy cost £8,202, but added to these costs are an extra £4,156 for personal bills such as mobile phones, loans and fees for gym or television services. This means the average family is paying out £12,358 of their income to bills, while the average UK salary sits at just £26,500.
The financial stress has meant that a quarter of people now feel that they are regularly unable to make ends meet, while this number was just 17 percent in 2007. Additionally, the Office for National Statistics reports that 40% of people would be unable to cope with an unexpected emergency expense in 2012, while just 25% said so in 2007.
Families are tightening their budgets more than ever under today’s financial strains, but putting small amounts aside regularly can ensure that the financial difficulties of today won’t hurt your child’s future.
Notes for editors
www.CompareJuniorISA.com is a free online resource for parents, providing information on children's savings and all aspects of family finance. The site includes performance comparison tables and parent reviews which can help you make an informed decision about where to put your child's money.
• Free independent children's saving website
• Compare the best performing Junior ISA, child trust fund and children's savings on line
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