Two-fifths of all families with children saved regularly in 2004, according to a review of the characteristics and circumstances of families and children by the Department of Work and Pensions.
The report – Families With Children in Britain: Findings from the 2004 Families and Children Study (FACS) – reveals 42% of all families with children saved regularly and were most likely to be saving for the future or for no particular reason.
Saving was more common among couple families, as approximately half (48%) of couple families were saving regularly compared with almost one-quarter (23%) of lone mothers.
Families where no one worked, or a parent worked for less than 16 hours a week, were the least likely to save. One out of ten (13%) lone parents and two out of ten couple (16%) families where no one worked for more than 16 hours a week saved regularly.
Similarly, families in the lowest income quintile were least likely to save regularly – 19% saved regularly compared with 67% of people in the highest income quintile.
The report also reveals nine out of ten families (92%) has a current or savings account in 2004 and that couple families were more likely to have an account than lone parents (95% compared with 84%).
Families in the lowest income quintile were least likely to have a current or savings account – 79% had an account compared with 99% of people in the highest quintile.
When it came to borrowing and debt, almost half (48%) of all families had borrowed money, excluding mortgages, in the last 12 months.
Families were most likely to have borrowed via a bank overdraft (25%) or in the form of a fixed-term loan from a bank/building society (12%).
Borrowing money was more common among lone parents than couple families – at 54% and 45% respectively – while lone parents were also more likely than couple families to have borrowed money from friends or relatives – 18% and 7% respectively.
Meanwhile, over four-fifths (85%) of families were able to keep up with the repayments on their borrowings, with 2% of families behind with at least one of their repayments. Low-income families and those with no one working for 16 or more hours a week were the most likely people to be behind with their repayments.
Families where no one worked more than 16 hours a week also tended to have a higher number of debts than families where at least one person worked these hours. Almost a third (27%) of lone parents who did not work or worked for less than 16 hours a week had two or more debts compared with one-tenth (8%) of lone parents who worked for 16 hours or more a week.
Other findings of the report show just over one-third (35%) of families with children received financial help from their relatives, with about half (54%) of lone parents receiving financial help compared with less than a third (29%) of couple families.
Lone parents who did not work 16 hours or more a week were most likely to have received help with their finances from their families.
When asked about managing family income, one-fifth (22%) of families reported their money “always”, “most often” or “more often than not” ran out by the end of the week or month.
Two-fifths (43%) of couples where no one worked for at least 16 hours a week and two-fifths (42%) of families in the lowest income quintile declared their money ran out by the end of the week or month.
Conversely, nine out of ten families (93%) claimed they managed their finances “very well”, “quite well” or “all right”. The majority of low income families (79%), lone parent families working less than 16 hours a week (73%) and couple families where neither parent worked for more than 16 hours a week (77%) also reported to manage their finances well.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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