New research by the Greater Building Society shows some parents may need a hand in helping their children early enough in forming life-long savings habits.
The Greater surveyed 971 parents from NSW and the Gold Coast with a child aged between 10 and 18 about their attitudes to helping children to save. (Hear from our Marketing Intelligence Manager and review the key research findings on our blog here)
The survey found that while parents overwhelmingly believe they are responsible for educating their kids about banking and saving, only two thirds (63%) of parents give their children pocket money and only half (48%) help their kids to open a bank account before they are 10.
This isn’t consistent with some of the top five tips recommended by the Australian Government’s Money Smart program of starting early and paying pocket money as well as overseas research. University of Cambridge research for the United Kingdom’s Money Advice Service on habit formation and learning in young children shows that kids’ money habits can often be formed by about the age of seven.
The Greater’s research also found that the average amount of pocket money given is $15 per week. Parents say the top reason for opening a bank account for their child is “saving money” (58%) and the two most important features of a youth account are no fees (87%) and high interest on savings (73%). While 62% of parents are happy with their kids using a smart phone, half are uncomfortable with their kids using a debit card for online purchases. The average preferred age for their child having a debit card is 16.
Product Manager David Bryde said the research was used to help The Greater to finalise its new youth banking account launched today, Life Saver, as well as their own infographic guide for parents who want their kids to save.
Mr Bryde said The Greater’s Life Saver Account is a simple new savings account to make it easier for under 25's to save and meet their lifetime savings needs.
He said the account pays high interest provided the account balance grows.
Once parents or grandparents are comfortable with the child operating the account themselves they can link it to a Greater everyday account to enjoy transaction and account keeping fee free banking until they are 25.
He said the infographic was a practical guide summarising the research and providing some tips for parents and young people to help them to teach their kids to save.
“The Greater is rewarding good savings habits at an early age by paying high interest and allowing young people to start operating an everyday account without the burden of paying fees,” Mr Bryde said.
“We are also playing our part to help our customers help their kids to be savers for life,” he said.
Media information: Craig Eardley on 0437 477 493.