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Press release
PARENTS FEELING THE PINCH
26 September 2008
British parents are going into debt so their children don’t miss out
- Nearly a third (29%) go into their overdrafts and over a quarter (27%) take out a loan or use credit cards to fund children’s expectations
- Over half (52%) of parents work extra hours and just over a quarter (26%) take on a second job, despite having to sacrifice time with the kids
- Almost a quarter (24%) of parents are willing to support their children until they’re financially stable and nearly a sixth (16%) all their lives
British parents are going into debt and making significant personal sacrifices because they don’t want their children to miss out, according to the latest NS&I (National Savings and Investments) Quarterly Savings Survey.
Nearly a third (29%) of British parents are increasing their overdrafts and more than a quarter (27%) are taking out a loan or using their credit cards to fund their children, suggesting that many are willing to risk their financial security to provide for their offspring. For many (59%), the pressure to pay comes from not wanting their children to miss out on the best opportunities – be it cultural trips, sports and music lessons, extra tuition and so on, although for some (15%) it is simply because they cannot resist their kids’ demands.
Personal sacrifices
Some parents are so determined to provide the best opportunities for their children that they make significant personal sacrifices to do so, including spending less time with their family. More than half (52%) of parents work extra hours to fund their children, while a quarter (26%) have taken on a second job to find the money. Parents make other sacrifices too, with over three-quarters (76%) cutting down on socialising, a similar percentage (75%) spending less on clothes, nearly two-thirds (63%) paying less for holidays and over a third (36%) cancelling their gym memberships.
Tim Mack, senior savings spokesperson from NS&I said: “It is only natural that British parents should want to put their children first and make sure that they have the best opportunities available, but this is having a significant impact on their wallets. Parents and families need to plan their household finances carefully, trying not to dip into their overdrafts or go into debt, but instead thinking about which outgoings are essential. This should help parents resist children’s demands for things that are just nice to have.”
Parents in it for the long haul
Despite the costs, parents are planning to support their children well into their adult years. Nearly a quarter (24%) of parents said they would provide financial support until their children are financially stable, however long that takes, and over a third (35%) of parents said they will lend a hand until their children start work and are earning an income. Moreover, a generous 16% of parents will provide financial support for the rest of their children’s lives. Only 6% of parents expect their children to stand on their own financial feet from the age of 18 onwards.
Family and friends chip in to help
It is not just parents that are paying for children’s upkeep, with the majority of the population (56%) having chipped in to help a relative or friend pay for their offspring. While this might be expected of grandparents, it is more surprising that a third (34%) of the population have helped pay for their nephew or niece, while a similar number (31%) have contributed to their brother or sister’s upkeep. A quarter (25%) of the population said they had dug deep to help a friend fund their children.
Children financially unaware or just take it for granted
Over half of all parents (51%) think that while children may appreciate some of what is spent on them, they are unaware of how much things cost. However nearly a third (32%) of the population just think that young people take parents’ financial support completely for granted. Over one in ten (11%) think that children see the money being spent on them as their right.
Population falling well short of its savings ideals
Looking at savings levels in summer 2008, there is a significant inconsistency between what people ideally want to save each month and the actual amounts they are setting aside. In fact, it seems that only people who save regularly are achieving levels close to their aspirations.
During summer 2008:
- The ideal amount that the population wants to save each month has risen to its highest ever level (£213.37 per head, 15.67% of total income), but these aspirations are not being reflected in actual savings levels which are considerably lower (£87.23 per head, 6.41%).
- Regular savers however are managing to save an amount similar to the population’s average ideal levels, putting aside the highest average amount since the Quarterly Savings Survey began - on average; they have saved £193.07 per month, an increase from spring 2008 when the figure was £185.63.
- The percentage of people that save regularly each month continues to be less than half of the population (47%), the same as spring 2008.
- The population is becoming increasingly pessimistic about its ability to save. Two-fifths of the population (40%) said they are less likely to save over the next three months.
ENDS
Notes to editors
Further information on personal finance is available at: www.youandyourmoney.info
Quarterly Savings Survey
For a PDF of NS&I’s Quarterly Savings Survey, case studies or further information on the statistics supplied in this release please contact the NS&I media team. Previous copies of the survey are available from http://www.nsandi.com/press-room/savingsurvey/index.jsp. Selected regional data for the Quarterly Savings Survey is also available on request.
The telephone survey, which questions people about their savings habits, was carried out by TNS among 3033 GB adults aged 16 and above between 25 July and 10 August 2008. The full Savings Survey telephone research was carried out by TNS among 3019 GB adults aged 16 and above between 6 June and 3 August 2008.
Tim Mack is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by email.
About NS&I
NS&I is one of the UK’s largest financial providers with 28 million customers and over £85 billion invested. It is best known for Premium Bonds, but also offers Inflation-Beating Savings, Guaranteed Equity Bonds and Children’s Bonus Bonds in its range. All products offer 100% security, because NS&I is backed by HM Treasury.
NS&I products are available over the telephone, internet, post and by standing order. They are also available through a network of Post Office® branches. Customers can also pick up brochures for our Premium Bonds, Inflation-Beating Savings and Income Bonds at retailer WHSmith in 400 of its High Street stores and 155 of its travel stores.
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