Parents would prefer to save money for their children rather than spend money on buying Christmas gifts, according to the latest research.
A study by Mintel has found that the majority of adults believe that they should spend less on gifts for kids at Christmas and birthdays, and instead invest the money in savings accounts for their children's futures. While a further 83 per cent say that they think it is essential that children have savings for when they are older.
Almost seven in 10 adults believe that child trust fund
accounts actually help the parents get into the habit of saving and six in ten believe it helps children to do the same.
Todd Davis, Senior Finance Analyst at Mintel explains: "Today, most adults are aware of the increasing financial burden young people now face because of the rising costs of Higher Education, the sharp increase in house prices and the need to contribute to a private pension. And they feel that there is a clear need for children to have at least some savings set aside early on.
"So rather than throwing money away on indulgent gifts for the children, many clearly realise it would make better financial sense to put the money into savings, even though this may not be that popular with the kids!"
Mintel has estimated that today around £11 billion is held in currently stashed away in children's savings and investment accounts nationwide, with almost 13 million British adults (26 per cent) holding at least one. Further more, this figure has risen by 13 per cent since 2003 and is set to rise by a further 41 per cent over the next five years with an estimated 18 million adults expected to have one by 2011.
One factor that has contributed to the rise in child savings is the introduction of the Government's Child Trust Fund (CTF). But while CTFs have only been around since April 2005, they have quickly become the most common form of saving for children and young people with nearly six million adults claiming to hold one.
This is followed by 4.9 million adults who have opened ordinary child savings accounts and 2.3 million adults who have opted for standard savings accounts in their children's names.
Mr Davis continues: "Child Trust Funds have undoubtedly rejuvenated interest in the market for children's savings and investment products. And most importantly they have significantly boosted the number of adults who are now actively saving for a child's future."
© Fair Investment Company Ltd
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