With many parents too cash-strapped to save for their children’s future, what’s the answer to giving your kids a helping hand? One school of thought says wait and let them learn the value of money, but is this right?
With university tuition fees about to rise to £9,000 per year and many young people struggling to get onto the property ladder, it’s probably never been more important to put money away for our children’s future.
And yet it seems many parents aren’t. A new report by myvouchercodes.co.uk has highlighted that 64% of parents with children under 10 haven’t saved any money for their kids’ future.
But for many, money is tight at the moment and I doubt many families have much spare cash to squirrel away. And, as long as unemployment continues to rise, it’s likely to stay that way.
Ways to save for kids
Child Trust Funds (CTFs) were introduced by Labour amid a fanfare in 2002 and were reasonably successful in encouraging saving for children among people not used to putting money away.
The current government has stopped contributing to CTFs and is about to launch tax-free Junior Isas as an alternative. These will lock in funds until the child reaches adulthood – but there will be no government contributions.
Savings accounts designed to let you save for a particular family member or a specific purpose have proved popular. They provide a trigger to start saving and bring some discipline into money management when it would otherwise be too easy to find an excuse not to save.
Grandparents getting in on the act
It’s often grandparents who contribute more than parents to children’s accounts – it is in the case of my two children with their mum’s generous parents regularly topping up their CTFs.
This trend is often a result of granny and granddad being part of the ‘golden generation’ with money to burn – recipients of generous final salary pension schemes and beneficiaries of previous stock market booms, who’ve paid off their mortgages.
But while it’s generous of them to save for their grandchildren, is it wise? The counter argument is that it’s better to build up our own wealth in a sensible way and that, eventually, our children will inherit this wealth at an age when they’ll put it to ‘better’ use. It seems many follow this theory, with nearly a quarter of people in the report are holding back from saving for their children in order to teach them the value of money.
Do you think it’s important to put some money away to give children a helping hand in the future? Or is it better to maintain a decent standard of living now and teach kids a vital lesson in how to manage their own finances?
Is it right to save for your kids?
Yes - they need a helping hand (54%, 108 Votes)
It doesn't matter - they must learn the value of money (40%, 79 Votes)
No - they should learn the hard way (7%, 13 Votes)
Total Voters: 200