Parents who wait until their child is five years old before opening a savings account could be missing out on almost £4,000 in savings, according to new research from Skipton Building Society.
The research shows parents typically wait until their child is around five years old before opening a savings account, meaning they could miss out on building a pot worth £3,794 during those early years. With that figure based solely on contributions made and do not include any interest that could be earned over time, meaning the total value could be significantly higher.
To coincide with UK Savings Week and with late September identified as the most common time of year for birthdays, the study of 2,000 parents with children under 18 found that once they do begin saving, they contribute an average of £63.24 per month towards their child's future.
The research also found that 11 per cent of parents never open a savings account for their child at all. At the average monthly contribution rate, this could equate to £13,659 in missed savings opportunities by the time a child reaches the age of 18, before any interest is taken into account.
The findings support Skipton Building Society's latest initiative to encourage families to start saving earlier. Eligible parents of children aged three and under can receive £25 when they open a Junior Cash ISA in branch and deposit £50 by 29 December 2026.
As part of the campaign, Skipton Building Society has partnered with The Mum Club to host a brunch event for new parents, providing expert guidance on future financial milestones and the benefits of establishing savings habits from an early age.
Alex Sitaras, Head of Savings at Skipton Building Society, said:
"The first year of becoming a parent can feel completely overwhelming. Between adjusting to a new routine, managing household finances and navigating countless new responsibilities, opening a savings account for your child isn't always at the top of the to-do list.
"That's completely understandable, but our research shows just how much difference getting started early can make.
"Many parents are surprised by the impact those first few years can have. Starting from birth rather than waiting until age five could mean thousands of pounds more in savings by the time a child reaches adulthood.
"Starting to save early can make a real difference over time, which is why we're encouraging parents and grandparents to take that first step towards building a savings habit for their child.
"The good news is that building a savings pot doesn't require huge amounts. Even small, regular contributions can add up over time and create meaningful opportunities later in life.
"Whether it's helping with the cost of education, supporting a first car purchase or contributing towards a future home deposit, starting early can help give children a stronger financial foundation for the years ahead."
The research highlights some of the reasons parents delay opening an account. Among the 66 per cent who did not do so before their child's first birthday, 26 per cent said they were focused on other financial priorities, while the same proportion wanted to wait until their child was older. A further 21 per cent said they intended to open an account but never got around to it.
More than half (55 per cent) admitted they wish they had started saving earlier for their child, with 39 per cent now recognising the advantages of beginning sooner.
Concerns about future costs are also front of mind for many families. One-third (33 per cent) of parents said they are worried about the expenses their children will face later in life, while more than half (53 per cent) believe their children will encounter greater financial challenges than they did themselves.
When asked about specific concerns, 43 per cent cited buying a first home as the biggest challenge facing future generations, while 38 per cent pointed to the cost of university. More than a quarter (26 per cent) were concerned about the expense of learning to drive and getting on the road.
The study also found that many families look for opportunities beyond monthly contributions to boost their child's savings. Around a third (32 per cent) deposit money gifted by family members into savings accounts, while 31 per cent use birthdays as an opportunity to add to their child's savings pot.
Three-quarters (75 per cent) of parents believe money paid into savings represents a more valuable gift than toys or other presents. Among those, 34 per cent said physical gifts are often quickly forgotten, while 48 per cent believe cash contributions will have a greater impact on their child's future. Two in five (40 per cent) said it helps teach children the value of saving, while 31 per cent would rather money went towards future goals such as learning to drive, attending university or buying a home.
Lauren Webber, Co-Founder of The Mum Club, said:
"Like many parents, I spent so much time thinking about my child's immediate needs that I didn't always stop to think about everything that comes next.
"The early years go by incredibly quickly, and it's often only when you start talking to other parents that you realise how important those early conversations and plans can be.
"Connecting with other parents can be a great way to share experiences, build confidence and start thinking about the future.
"That's why we're delighted to be working with Skipton Building Society to bring families together and help them feel more prepared for the years ahead."
