Children's savings accounts raided by 1 in 5 parents Go compare with our comparison table

Children's savings accounts raided by 1 in 5 parents

21 December 2009 / by Rebecca Sargent

More than one in five parents have been borrowing from their children's savings account, research from Engage Mutual Assurance has revealed.

The research found that of those borrowing from their children, 44 per cent were borrowing between £200 and £500, the majority of which was taken during the last five months.

Of those parents that have borrowed money from their children's savings, 82 per cent claim that the money is to be treated as a loan. Meanwhile, eight per cent said that they wouldn't be having a very merry Christmas without the extra cash.

Commenting, Karl Elliot marketing director at Engage Mutual said: "It is evident from this survey that the majority of parents who have borrowed money from their children have only done so because they found themselves in a desperate situation.

"And whilst it might be possible to budget for everyday spending and the usual bills and direct debits, it is the unexpected costs which people find hard to cope with."

The poll also revealed that 30 per cent of parents feel guilty over raiding their children's savings, while 27 per cent feel saddened by how dire their financial situation has become.

However, a child trust fund, which is 'untouchable' could help prevent the temptation for parents to borrow money from their children, Mr Elliot claims, saying:

"The child trust fund was created to contribute to the long term financial future of today's children.

"As a savings vehicle, the child trust fund is helping to break the cycle of short term financial planning for families in the UK. Because it is 'untouchable' it can help parents avoid the temptation to borrow and the guilt that invariable follows."

© Fair Investment Company Ltd


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