Parents who delay opening a savings account for their children could miss out on thousands of pounds in savings, according to new research from Skipton Building Society.
The research shows parents typically wait until their child is around five years old before opening a savings account, however doing so could see them miss out on building a pot worth £3,794 during those early years.
This figure is based solely on contributions made and does not include any interest that could be earned over time, meaning the total value could be significantly higher, the building society said.
The study found that once parents do start saving, they contribute an average of £63.24 per month towards their child’s future.
Among those who did not open an account before their child’s first birthday, more than a quarter (26%) cited other financial priorities, while the same proportion wanted to wait until their child was older. A further one in five (21%) said they intended to open an account but never got around to it.
More than half (55%) admitted they wish they had started saving earlier for their children, with 39% now recognising the advantages of beginning sooner.
Skipton Building Society said its research also found that more than one in 10 (11%) parents never open a savings account for their child at all. At the average monthly contribution rate, this could equate to £13,659 in missed savings opportunities by the time a child reaches the age of 18, before any interest is taken into account.
Alex Sitaras, head of savings at Skipton Building Society, said: “The first year of becoming a parent can feel completely overwhelming and opening a savings account for your child isn’t always at the top of the to-do list.
“That’s completely understandable, but our research shows just how much difference getting started early can make.”
The study also found that many families look for opportunities beyond monthly contributions to boost their child’s savings. Around a third (32%) deposit money gifted by family members into savings accounts, while 31% use birthdays as an opportunity to add to their child’s savings pot.
Three-quarters of parents believe money paid into savings represents a more valuable gift than toys or other presents. Two in five (40%) said it helps teach children the value of saving, while 31% would rather money went towards future goals such as learning to drive, attending university or buying a home.
Sitaras added: “The good news is that building a savings pot doesn’t require huge amounts. Even small, regular contributions can add up over time and create meaningful opportunities later in life.
“Whether it’s helping with the cost of education, supporting a first car purchase or contributing towards a future home deposit, starting early can help give children a stronger financial foundation for the years ahead.”
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