Investment Bank Of 'Mum and Dad'
22nd June 2014 Paul Andrews
Anxiety amongst some parents that their children won’t be able to secure employment or face large debts, with many planning to help them with financial outlays.
Research for Lloyds Bank Private Banking shows that an uncertain financial future is creating anxiety amongst some parents that their children won’t be able to secure employment or face large debts, with many planning to help them with financial outlays.
- 64% of parents invest for their children before they’ve reached six
- 62% of parents surveyed concerned their children will struggle to find a job
- Only 15% have no concerns about their children’s financial future
Titled ‘Family Futures’ the survey asked over 1,100 Lloyds Bank Private Banking clients about their views on their children’s futures, and revealed that the majority (62 percent) are concerned for their ability to find a job. More personally, 36 percent worry that their children will not be careful with their money and 34 percent are concerned about the level of debt they may have.
Sarah Deaves, Investment Advice & Private Clients Director, Lloyds Bank, commented: “Although the UK economy is beginning to show strong signs of recovery, many are still concerned about their family’s future and investing early on behalf of their children, usually before they even begin school. While a large percentage of families are investing their wealth in financial products, many still see property as a big investment."
“Our research shows that while the majority of parents are quite clear where they think the best long term investment is for their children’s future, nearly 20 percent simply don’t know. This suggests that good financial advice is as important as ever, especially with such long term and important investment decisions.”
Nearly half of parents surveyed have made investmentson their children’s behalf, with 42 percent in the form of trust funds and 24 percent in stocks and shares. And those surveyed are quick to invest for their children, with the vast majority (80 percent) doing so before they reach double digits.
While property is viewed as the best investment among those surveyed for one’s children – doubling the popularity of stocks and shares in terms of opinion (25 percent vs 51 percent) – when it comes to actual investments parents have made on behalf of their children it is well down the list at 15 percent. This is compared to trust funds (42 percent), stocks and shares (24 percent) and bonds (22 percent).
The discrepancy in respondents’ opinions compared to their investment actions could be down to a range of factors including property seen as a long term investment, funds being an easier way to save in small increments or the relatively liquid nature of stocks and shares.
Sarah Deaves concluded: “By setting aside a little amount at a time and taking the time to create a financial plan, parents may be able to help their children and give themselves some piece of mind.”