Savings: only 4% of savers put money aside for children's education

Putting money aside for their children's future education costs is a luxury many people cannot afford. However, a new study this week claimed more Britons are dipping into their savings to fund holidays abroad, weekend breaks and impulse buys. Birmingham Midshires says 36% of those quizzed admitted "raiding" their savings during the past three months, with more than a fifth saying it was for a holiday or weekend away. The average "savings raid" (the amount withdrawn from savings over a three-month period) has gone up from £1,870 in the summer to £2,130 now – coming close to the record high of £2,191 in summer 2009. However, the survey also found that the average amount saved during the past three months increased, from £764 to £848. A spokesman for Birmingham Midshires says: "The increase in raiding in the last quarter was mainly down to Brits heading off to the sunny shores, which is hardly surprising during the summer months." He describes it as "encouraging" that people had typically put away more money than they did in the three months to July. The increase in savings found in the survey matches official figures showing that savers, responding to the recession and uncertainty over the recovery, have opted to increase the level of funds in their accounts. The age group withdrawing the most were those over 55. Many said they needed the money for emergency home or car repairs. Asked about their reasons for saving, just 4% said it was to help finance their children's education – a figure unchanged on earlier this year. Perhaps this will increase following this week's move on university tuition fees. By contrast, 23% said "a holiday", 10% said a car, and 3% a new TV. Not surprisingly, many savers said Christmas was a key reason for putting money aside. A big change can also be seen over the past two years in how much people are saving and how much they are dipping into their cash. In the latter part of 2008, savers were raiding their accounts as fast as they were putting money aside. When confidence returned in the spring of this year, the figures almost came into balance again with £1,031 saved and £1,499 raided. In the past three months the pattern reverted to recession levels, with £848 saved and £2,130 raided. Meanwhile, HSBC research reveals that 30% of adults have less than £249 set aside as a financial safety net. The survey of 2,100 UK adults reveals 19% have no savings at all, and 11% have less than £249 set aside as a financial safety net. This is the equivalent of just five days' average take-home pay, while the recommended minimum is three months' pay (typically £4,683). The bank found those aged 25 to 34 were least prepared for an emergency. "These findings demonstrate a worrying lack of preparation amongst UK residents. With the current climate of uncertainty, it is of utmost importance that people are setting aside a realistic sum of money to be used in emergencies," says a bank spokesman. It recommends that people set up a monthly standing order into their savings account. "That way, you won't be tempted not to save for one month." And choose an easy access account, as you never know when you might need to get at your emergency cash.