Majority of 10 year-olds already saving for the future
New research from Scottish Widows has revealed that 98% of 10 year-olds have already started saving, with more than one in 10 putting the money aside to prepare for educational expenses or even looking further forward to buying a house.
cardsThis is in stark contrast to their parents' generation, as only 15% of adults say they started to make savings before the age of 15.
Scottish Widows joined up with leading social historian Professor Jane Humphries, who is Professor of Economic History at Oxford University and Fellow of All Souls College Oxford, to make sense of the new findings.
After examining the generational differences in attitudes towards savings and retirement to try to explain the changing priorities of young children and adults, Professor Humphries said:
"These children started school around the start of Britain's financial crisis so perhaps growing up in an age of austerity has made them realise that saving for a rainy day is sensible. The rising costs of education may have prompted their concern with saving for university or college."
It seems that adults are playing their parts, with 68% admitting to actively encouraging their own children to save. The report also showed that children are taking a pragmatic view of their finances, with 29% saying they just like to have some money saved, 27% that they save in case they need it in a few months' time and 14% are saving for when they are older.
Perhaps most surprisingly, 70% of children understand what a pension is and are already thinking about how they would like to spend their retirement.
Head of Investment Propositions at Scottish Widows Iain McGowan, commented: "Whilst it may not be necessary for children to begin saving pocket money from the age of 10, this positive attitude will help the next generation manage their finances and prepare early for milestones such as securing a mortgage and even their retirement."
A prepaid card is a great way to teach your child the importance of budgeting and saving money. These are loaded with a certain amount of cash and once the balance hits zero, it can no longer be used to withdraw money or pay for goods.