07 Mar 2019 NS&I research has shown the enduring influence of our parents on building long term savings habits and the financial as well as emotional bonds between the generations.
50% of Britons had a savings account opened for them by their parent or guardian when they were a child, with just over half of over 16s (51%) saving regularly as a child, either by themselves or parents investing on their behalf and almost two thirds of over 16s saving regularly into adulthood.
Encouragingly, opening a savings account at birth has become more popular over the generations; only 15% of those aged 65+ had a savings account opened for them between the ages of 0 and 5, whilst nearly a third (31%) of 16-24 year olds have had a savings account since early childhood.
While just under a quarter of adult savers have decided to remain with the same savings provider as their parents, 23% have set up their first savings account with a different provider, and nearly one in five have decided to not slip into savings inertia by switching their account to a different provider from the same one as their parents or guardians.
Of those who received financial education as a child, 91% received informal financial education from their parents, opposed to only 15% adults having received financial education from teachers.
78% of older children (aged 12-15), with questions about Premium Bonds would go to their parents. But, just under two-thirds of current parents with children under the age of 16 would actively talk to them about saving.
Children are also increasingly turning to alternative ways of learning about saving. When asked about Premium Bonds in particular, 41% of 12-15 year olds would search the internet or read/watch the news to find out about how the savings product works.
Ian Ackerley, NS&I Chief Executive, said:
“Saving is undoubtedly a family affair, with positive habits being built through the generations. Whilst it is encouraging that over three-quarters of older children would still ask their parents about Premium Bonds, we would appeal to all parents to have conversations about savings with their children. Talking openly about money can be linked to developing financial awareness and the capability of children to save.”
The average amount that adults save each month is £117, however almost a third (30%) of Britain’s savers are only able to put less than £50 into savings each month and just under a quarter do not have a savings account, either never having one or used to have one but no longer do.
Encouragingly however, nearly three in four are able to add to their savings after covering their living expenses each month, with 29% regularly being able to save on their incomes after bills, while 43% say they are able to occasionally top up their savings pots each month.
Ian Ackerley continued:
“While the average amount that adults save each month is over £100, we are aware that this is not necessarily achievable for everyone. Encouraging as many people as possible to create a regular savings habit is easier when savings products are more accessible, NS&I has a number of products with a starting investment of just £1 and by lowering the minimum investment in Premium Bonds to £25, we are attempting to break down the barriers of saving by allowing everyone the chance of winning tax-free prizes each month, ranging from £25 to £1 million.
“Our customers love to share their experiences of owning and winning in Premium Bonds, and it’s particularly heart-warming to read stories of customers who have passed down their love for Premium Bonds to their children and grandchildren, after being inspired by their own parents.”
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