The increase in child benefits this year could mean a £15.4billion boost to children's savings, according to The Children's Mutual.
The weekly child benefit increased on Monday by just over six per cent, from, £18.80 to £20 for first born or only children and from £12.55 to £13.20 for each additional child. And according to calculations by The Children's Mutual, the extra £1.20 and £0.65 for first and subsequent children respectively could really add up when invested into a savings account
for long term gain.
If put into an investment plan like The Children's Mutual Child Trust Fund
, £20 a week could result in a nest egg of £32,300 for when the child turns 18, which is an increase of £1,800 compared to £18.80 saved in the same way.
And, says The Children's Mutual, even if only a quarter of the full child benefit was saved each week, the result could still be £8,900 in 18 years' time.
"According to our research, nearly a third (29 per cent) of parents currently say they are saving their offspring's Child Benefit while 22 per cent say they use it to buy their children treats and that, despite the economic climate, now is a good time to save for their children," said David White, Chief Executive of The Children's Mutual.
"For those who can afford to do so, we urge them to save at least part of their Child Benefit for the long-term future so they and their offspring don't miss out.
"The costs of attending further or higher education, leaving home or simply learning to drive and buying a first car are significant for young people and their parents.
"Using some Child Benefit to top up a child, or children's, Child Trust Fund
account is a perfect example of how a ‘little and often' view of child savings
can bring real benefits over the long term and help families to ensure that all their children enter adulthood with a tangible financial asset."
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