Scots parents are raiding their children's savings to make ends meet in the cost-of-living crisis, new data shows.
Rising household bills and spiralling debts are forcing mothers and fathers across the country to dip into money meant for kids' futures.
A survey of 1,000 UK parents by the group Scottish Friendly found more than one in five (22%) have withdrawn money from their children’s savings.
The majority of those (64%) have done so in the last 12 months as families cope with high inflation and rising interest rates.
Parents have used their children’s savings to pay household bills (33%), cover unexpected costs (32%), pay off debts (20%), buy birthday or Christmas presents (19%) and to go on holiday (13%).
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The data also showed that the number of junion ISAs being opened by parents has fallen in the past year.
Kevin Brown, savings specialist at Scottish Friendly, said: “Borrowing money from their children’s savings is a last resort for parents desperately trying to make ends meet.
“Inflation may be slowing but living costs are still rising and that’s pushing more families into the red.
“Budgeting only gets you so far and if borrowing money isn’t an option, then dipping into your family’s savings is a difficult choice many are being forced to make.
“As a general rule, it’s important for households to have some money held in cash that they can easily-access in case of emergency without penalty and free of charge.
“But if you’re saving for your children’s future then you should think about how best to maximise your potential returns over the longer-term.
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“Saving rates are going up, but there are few accounts paying a rate of interest anywhere close to the current rate of inflation.
“Parents may want to think about investing some of their money, starting with a little and often approach to make the most of compounding.
“Times are tough for a lot of families at the moment, but things will get better and it’s important to keep one eye on the future and how to make the most of your money for your children.”
Martin Crewe, Director of Barnardo’s Scotland, said: “These figures are a sad reflection of the hard times faced by too many families across Scotland. Existing high levels of poverty are being made worse by the cost-of-living crisis which is dragging more families into financial insecurity.
“At Barnardo’s Scotland, we have consistently called on the Scottish Government to take mitigating action to increase the Scottish Child Payment in line with inflation and to top up the payment for young parents under 25 who receive a lower rate of Universal Credit. It’s clear that more needs to be done to help children and families who are struggling.”
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