44% of parents saving for their child’s future

FOUR out of 10 parents are already saving for their children’s futures — and they will need to, due to climbing inflation, it was claimed yesterday.

With a projected annual inflation rate of 3.8%, it has been estimated that four years of third level education could cost an average of €43,561 — some €13,000 more than it does at present.

Similarly, an MP3 player could cost €289 in 2017 compared with today’s price of €199, while a laptop will cost €1,523 compared with €1,049.

The average cost of a mountain bike will climb from its present price of €435 to€ 632 within 10 years while a first car will rise in average price from €10,250 to €15,172.

The figures were compiled by Halifax which published the figures to coincide with the launch of its new Child Saver Account, aimed at parents hoping to specifically save cash to be used for their children in future years.

The estimated cost of a third level education was based on inflation over 10 years on a baseline annual figure of €7,500, which was sourced last year for Bank of Ireland Life from research projects by Millward Brown IMS.

Halifax estimated that the saver account would allow parents to save €109 a month for the next 10 years to be able to afford a first car for their child.

Independent research carried out on behalf of the bank found that 44% of parents are already saving with an eye to their children’s future, and are saving on average €114 each month.

Half of all parents surveyed save some of their Child Benefit, while almost 40% of parents save all of it.

The present child benefit payment is €160 a month for the first two children and €195 a month for each child after that.

Halifax representatives said that if all child benefit payments were put aside and saved in the account, more than €10,000 could be saved in a five year period and more than €22,000 saved over 10 years.

Halifax’s head of products, Niamh Lambe said extensive research into the market had shown that parents understood the need to save for their children.

The bank claimed the saver account was the first such product of its kind in Ireland, with an interest rate of 7.25% Annual Equivalent Rate and the provision for the funds saved in any year to be moved into a separate demand account which would allow money to be withdrawn at any time.