Low income families may be struggling to get onto the property ladder but they are working harder to save money for their children according to new research by child savings provider Engage Mutual.
Currently government statistics reveal that lower income groups are 34% more likely to be renters rather than homeowners while higher earners spend 41% more money on travel and holidays and 39% more on socialising and going out.
Individuals earning over £39,000 a year spend more than double the amount on food than those earning £10,000 or less and those on hefty salaries are twice as likely to buy new registration cars than those earning under £20,000 a year.
However, despite these trends, new research from Engage Mutual has revealed that is low income families who are saving the most for their children’s futures.
The data reveals that lower income families invest 1.1 per cent of their post-tax monthly salary into their child’s CTF which is almost double the proportion saved by higher income families, who set aside just 0.6 per cent of their monthly salary.
While both income groups have increased the regular monthly amount they are saving for their children since the launch of the CTF initiative in April 2005, lower income families have increased the amount saved by nine per cent since May 2005, with higher income families topping up eight per cent more each month.
Karl Elliott, Marketing Director at Engage, commented on the findings:
“With more than 2.7 million CTF accounts open in the UK to date , our experience suggests that lower income families are leading by example. While dedicating a greater proportion of their household income, lower income families are also eight per cent more likely to actively seek to invest their child’s CTF than higher income families.
“It’s encouraging to see more people using the CTF to make provision for their children’s future. Regardless of household income, everyone should be encouraged to save for their children. We would urge parents to set aside a small amount of money on a regular basis and they will be surprised to see how each monthly instalment could add up over the long-term.”
Find out more about child savings accounts