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News: Bank of Mum and Dad set to hang up closed sign

New research by indicates that the Bank of Mum and Dad could close in two generations time, a high street bank surveying 1,500 adults about their attitude to saving concluded.

Despite the rising cost of property and university fees only 29% of those aged 45-54 years expect their children to save for further education or the deposit for their first property.

Yet Bradford & Bingley found the expectation to contribute to the cost of these big events nearly doubles amongst the next generation of parents (aged 25-34 yrs) 52% of whom expect children to save for these big financial events.

Steve Potter, head of savings for Bradford & Bingley said: “If this trend of parents expecting their children to save rather than parents bailing them out continues then the bank of Mum and Dad will be hanging up the “closed” sign in two generations time.”

“This makes it all the more important for parents to encourage their children to save from birth.”

“This trend is down to a number of factors, but people in their 40’s and 50’s are more likely to have benefited from final salary pension schemes, and large capital growth in their homes than people in their 20’s and 30’s who may not feel as wealthy, and therefore as able to help out their children.”

“Children wanting their own set of wheels should start saving early as 50% of parents of all ages think it’s down to the kids to buy their first car.”

Where once childhood savings could fit snugly within the confines of a piggy-bank, respondents indicated that we expect a lot more from today’s youngsters.

55% of those questioned consider children to have reached the ‘age of saving’ by 10 or even younger. From then on children are expected to start saving for their future with car or house buying and university rather than having clothes and travel top of their saving goals.

The pressure is high for all young investors, with one in three parents expecting their children to have saved £2,000 or more by the time they reach 18.

How children are expected to spend the money they save on

%

Car

50%

University

38%

Deposit for a house

38%

Travelling

28%

Clothes

26%

Leisure

23%

Holidays

18%

Mobile phone money

14%

Christmas & Birthday presents

14%

Rent

11%

Other

2%

Don’t know

8%

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