It seems that parents are finding it harder to save than ever – research from Abbey has found that over one in four British parents with young children have no savings or investments – so more parents should be considering offset loans.

The bank’s research has found that 20% of these parents have less than £1000 to fall back on. This is a growing concern for families, especially for those parents who are contending with the higher costs of raising a child. In fact, this has resulted in a quarter of parents reducing the amount that they are saving by as much as £3,300 a year. 

With an offset mortgage, this wouldn’t be such a problem. As well as keeping a roof over their family’s head, parents can reduce their monthly mortgage bill by saving – the more they save, the more they reduce and in turn, save. This can help build a nest egg, which is vital for any growing family.

Reza Attar-Zadeh, director of savings and investments at Abbey says: “It’s vital for everyone to have a rainy day fund even more so for parents, who must juggle the need to build up a nest egg for their children’s future with the need to provide for the here and now. So It is concerning that many families are saving less, as this could leave them facing financial difficulty in the future. It’s encouraging to see that some families are looking ahead and planning to save more – we hope this trend will continue”.

Andrew Hagger of Moneynet.co.uk says: “With interest rates at a much lower level than 12 months ago, it’s no surprise that parents are saving less. However, putting a little cash aside each month, rather than continually reaching for the plastic is a habit that UK households need to rediscover.

“Unless you make a determined effort to start saving, it’s one of those things that’s easy to put off and never get round to doing anything about.”

So make a determined effort and talk to a mortgage adviser about a loan that encourages you to save. Offset gives you and your family a break every single month, if used to its potential – and the more breaks a family can get right now, the better chance they have of a better financial future.

SOURCE: Abbey, Moneyfacts, 10/11/09

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