Young Australians have over $650 million in savings, but parents and banks could be doing more
Australians aged between 6 and 13 currently have $653 million in personal savings, Roy Morgan research has revealed.
Although that number seems high, the distribution of funds across our young savers is very skewed.
While 10.2% of the 1.8 million young people who fall under this age group have over $1,000 in the bank, 26% do not have any form of savings and 21.2% have less than $50.
The high proportion of young Australians with little-to-no savings is not surprising given that recent data from the Greater Building Society showed only 63% of parents give their children pocket money, and just 48% help their children open a savings account before the age of 10.
Roy Morgan industry communications director Norman Morris said the responsibility to engage young savers should lie with banks, as well as parents.
"Although just on three quarters of young Australians have their own savings, there is plenty of scope to improve this as this level has in fact gone down by a few percent over the last decade,” he said.
"In addition to the need to increase the proportion who save, there is a considerable opportunity to increase the amount that is saved as around one fifth have savings of only less than fifty dollars.”
Morris said that although school banking programs - such as the Commonwealth Bank’s Dollarmites Club - aim to help children save, a greater range of services should be provided by financial institutions to engage young savers.
“There is obviously a major role to be played by parents to encourage their children to save but banks also need to play a role by providing suitable products and incentives,” he said.
“In the long term it is obviously hoped that a worthwhile savings pattern developed with a particular bank in childhood will ultimately lead to a longer term adult relationship with the bank.”