More than one in five parents have been borrowing from their children’s savings account, with 44% of them borrowing between £200 and £500.
A recent survey reveals that British families blame the recession for their gloomy financial position. Over 80% of parents who admitted to borrowing claim the money they have taken is merely a loan, and they intend to pay it back as soon as they are able. Unexpected car repairs, house repairs and other bills have meant they have been forced to find extra money from somewhere. 40% of those parents forced to turn to their kids’ savings say they did so to pay the bills.
Fourteen per cent admitted they had used the money to pay for a family holiday, whilst 12 per cent had borrowed it for house repairs. Thirteen per cent of those who borrow from their kids say they don’t know where else to get the money from quickly, and almost two thirds of parents do so only when there is no other alternative.
Karl Elliott,from Engage Mutual said:
“Almost six in 10 adults admit their financial situation has significantly worsened over the past 18 months.....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 problems occur when parents find it hard to pay the money back.”
The poll shows that 30 per cent of parents feel incredibly guilty taking money from their kid’s accounts. With almost 70 per cent of children in the UK having less than £1,000 in their savings account – borrowing parents could have already withdrawn a significant part of their child’s nest egg. Rightly, 60 per cent of parents admit they are worried about their child’s financial future.
January 2010
Survey of 3,000 parents by by child trust fund provider Engage Mutual Assurance | 
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