Parents saving for children are just not able to do enough, says Stephen Pett of Legacy Trusts.  “Without families sticking together and sound long term planning from relatives – especially grandparents – the future is bleak for children hoping to make a start in the next thirty years.   And there is no guarantee things will be better after that.   Should interest rates rise, affordability of homes for first time buyers will get even worse.  Well organised families will be streets ahead.”   Here is the Castle Trust report (we don’t endorse – or criticise their product: that is not our expertise.)

  • ·         Parents are saving up to £3.79 billion a year for their children with the average family putting aside £54 a month
  • ·         Castle Trust research shows they could make money work harder

Parents are saving up to £3.79 billion a year for their children with the average family putting aside £54 a month, new research1 from housing investment and shared equity mortgage provider Castle Trust shows.

But the nationwide survey among parents with children under-18 shows just 44% of families are able to save regularly with more than one in five (21%) not saving at all.

Castle Trust is urging those who save to get the most from their money as its study shows the most popular savings vehicle is a bank or building society account used by more than half (56%) of those who save, with 23% using Cash ISAs and 11% using Cash Junior ISAs. Just one in twenty use stocks and shares Junior ISAs and 7% stocks and shares ISAs, despite cash not providing the best returns over the long term.

The most popular reason for saving is to contribute to their children’s education with 30% of parents putting money aside for university or school costs, while saving for a first home is the next most popular reason chosen by 13%.

Castle Trust is offering new investment products called HouSAs which enable parents to invest efficiently in the national housing market via Junior ISAs or ISAs and which provide returns in excess of the Halifax House Price Index.  It has launched a guide to saving for children which is available at

Sean Oldfield, Chief Executive Officer, Castle Trust said: “The Bank of Mum and Dad is always open for business with nearly £3.8 billion being deposited a year by parents of under-18s.

“The issue is that investing in bonds, equities, savings accounts or other products usually aims to beat inflation but parents saving for their children’s first home would benefit from beating house price inflation instead.

“A fixed-term tax efficient investment linked to housing can be used very effectively when you have a specific goal of saving for your children’s future home.”

The table below shows how saving for children varies across the country – parents in London and Eastern England are most likely to save regularly while those in Wales are least likely.

SCOTLAND 52% 21%
NORTH EAST 42% 26%
NORTH WEST 49% 16%
WALES 29% 31%
EASTERN 57% 20%
LONDON 57% 16%
SOUTH EAST 43% 18%
SOUTH WEST 41% 25%
UK 44% 21%

Castle Trust’s Growth and Income HouSAs are suitable for stocks and shares ISAs and Junior ISAs and can be taken out for terms of three, five or ten years.

The capital value of the Income HouSA tracks any rise or fall in the Halifax House Price Index and pays an annual income of between 2% and 3%, depending on the term of the investment while the Growth HouSA offers a multiple of between 1.25 times and 1.7 times any increase in the Halifax House Price Index or limits the loss to between 0.75 times and 0.3 times any decline. Both are available for investments of between £1,000 and £1million

Castle Trust also offers a new type of shared equity mortgage, the Partnership Mortgage, which is for 20% of the value of an owner occupied home alongside a repayment mortgage of up to 60% from a traditional lender and a deposit (or equity, if remortgaging) of at least 20%.  There are no monthly commitments on the Partnership Mortgage and Castle Trust will share 40% of any profit made by the homeowner when they sell or come to the end of the mortgage term.  The company will also share 20% of any loss made on a home bought with a Partnership Mortgage.


 Saving for children.