Today’s young people are setting aside more money than their parents’ generation did when they were young, according to new research from Santander 1|2|3 Mini[1]. But the study also reveals the nation’s £15 million[2] playground debt, as millions of 11-16 year olds borrow petty cash from family and friends.
Reza Attar-Zadeh, Director of Retail Products for Santander UK, said: “Learning about money is one of life’s most important lessons. So while we are pleased to see that nine out of 10 children save money, 1 in 5 have also borrowed. Whilst we don’t want to foster a culture of debt, it is important that young people grow up with a good understanding of how money works.”
He added: “We want to see children and their parents taking a pro-active approach to saving. To support this we recently launched the 1|2|3 Mini, which pays up to 3% interest and is supported by an interactive online calculator designed to help children learn about money management.”
The Santander 1|2|3 Mini study, which questioned 11-16 year olds about their saving and spending habits, found that one in eight (12 per cent) children believe owing people money is “normal”, raising concerns that Britain’s youngsters are becoming comfortable with debt. It also showed, one in five (18 per cent) children aged 11-16 years currently owe someone money, with the average amount outstanding being £19, rising to £50 or more for one in 10 (9 per cent).
But it’s not all bad news as in total, 94 per cent of today’s 11-16 year olds set money aside for the future, with over a quarter (26 per cent) already saving for college and university, and eight per cent even saving towards a house deposit. The average amount saved by these savvy school kids is £336 per year.
The 1|2|3 Mini rewards customers with 1.00% AER on the total account balance from £100, 2.00% AER on the total balance from £200, and 3.00% AER on the total account balance from £300 up to a maximum of £2,000. The interest can be earned tax free, subject to the usual HMRC rules. There are no fees or charges on the account.
The 1|2|3 Mini is available to open in any Santander branch or through the Santander website (www.santander.co.uk). Applications to open the account in trust for a child under the age of 11 must be made in branch.
Notes:
1. Opinium Research carried out an online survey of 502 UK children (aged 11–16) and 502 parents from 28th February to 4th of March 2014. In each interview, the child would answer the first set of questions before handing over to their parent who would answer the remaining questions ensuring one child and one parent per interview.
2. According to the ONS Census 2011 there are 4,521,155 11 – 16 year olds in the UK. Santander’s research showed 18% of children owed an average of £19 each to someone.
(4,521,155*18%)*£19 = £15,462,350