Kids in the UK are to receive £2.4 billion this Christmas, estimates MoneyExpert.com, as parents, grandparents and other generous relatives and friends opt to give cash instead of presents.
According to the research, 48 per cent of adults give children between £20 and £50, and MoneyExpert.com is urging parents and children to look into the best way of saving the cash.
“Giving kids some cash for Christmas is a good way to put a smile on their face – and possibly help them to get the savings habit," says Sean Gardner, Chief Executive of MoneyExpert.com.
“I don’t want to spoil the fun but if your child has some cash lying around on top of their Christmas presents this year, it might be worth suggesting they start saving. It might not be what every kid wants but it’s certainly a good way to introduce the idea of thinking about money."
MoneyExpert.com has found that there are more than 130 accounts on the market for children, paying interest of 4.975 per cent on average, and advises parents to think about the benefits of opening a savings account for their children's money. The site also urges parents to request and complete an R85 form which will ensure that their kids do not pay tax on their interest.
“Nobody wants to pore over savings rates over their turkey sandwiches," continued Mr Gardner, "so keep your eye on the cash and if your children haven’t spent it all after a few days why not talk to them about how to save. It might just work.”
Find out more about the best child savings
accounts and Child Trust Fund accounts