Financial crisis prompts children in UK to save money: Study

The vast majority of the ''austerity generation'' is putting away part of their pocket money for future contingencies.

Scottish Widows reports that most children said they saved a portion of their pocket money, while 10 per cent put all of it away.

According to a report, children as young as 10 were saving already for key milestones in their lives such as university, buying their first home or starting a business.

Findings from investment provider Scottish Widows showed, the tough economy had produced a generation of financially savvy children, many of whom were more switched on to savings than their parents were at the same age.

With university tuition fees as also a house deposit still some years away, 11 per cent of children said they had already started saving towards the cost of college, university or buying a home.

Another 6 per cent said they were saving up for a car, those with an entrepreneurial bent (2 per cent) said they were saving up to start their own business.

However, children's saving priorities were still toys, games and gadgets with 48 per cent saving up for the purpose.

Around 98 per cent of 10-year-olds said they had already got into the habit of putting some of their cash away for a rainy day, while only 15 per cent of adults surveyed said they had started saving before the age of 15.

According to an insurer the financial crisis had created a generation of child savers who had started to put money aside by the age of 10 to pay for milestones, including going to university and buying a house, an insurer has claimed.

According to researchers, growing up in a financial crisis had given children a more realistic approach to their money than previous generations.

The majority of children who regularly received pocket money said they received between £5 and £9 a week. According to most children, they saved a portion of the cash, although 10 per cent put all of it away.

The researchers found that seven out of 10 children surveyed understood what a pension was - although 10 per cent thought they would be able to retire before the age of 50.

Oxford University professor of economic history Jane Humphries who helped analyse the data said the children started school around the start of the UK's financial crisis, so perhaps growing up in an age of austerity had made them realise that saving for a rainy day made sense.