British parents put aside nearly £3.8 billion a year for their children’s futures, showing a growing concern with the rising cost of education, housing and starting a future.
The figures, from a survey by mortgage provider Castle Trust, show that the average family puts aside £54 each month into children’s savings accounts like the Junior ISA.
Arabela Velasco of CompareJuniorISA.com, a leading children’s savings comparison website, said of the survey: "It’s encouraging to see that UK mums and dads are doing the right thing and saving for their children’s future, to the collective tune of billions a year. It’s important that parents ensure that they are saving this money into a tax-free account, like the Junior ISA, Child Trust Fund, Child Tax Exempt Savings Account, or others. While the survey showed that the most popular way to save is through a bank or building society savings account, most people don’t know that in ‘regular’ savings accounts, interest is automatically taxed at 20 percent before it is paid out – even if the account holders are children!"
Despite the good news, the survey did reveal some worrying figures: of parents with children under 18, just 44 percent save regularly. While some parents don’t save every month and only save when they can, 21 percent aren’t saving at all, the survey revealed.
56 percent of those who do save prefer a bank of building society account, while 23 percent use cash ISAs and 11 percent use cash Junior ISAs. The Junior ISA is a tax-free, long-term savings vehicle that allows parents to save up to £3,600 a year until their child turns 18.
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