Nationwide tackles ‘buy now, borrow later’ culture

Nationwide has issued a report on childrens savings that suggests Britains buy now, borrow later culture is means fewer people save for their futures.

The society says this attitude contributes to the rise in personal debt, and youngsters need to be educated to tackle these issues early.

Nationwide has launched a childrens savings action plan to help change attitudes to saving and personal finance. The six point action plan calls for the government to remove distortions in tax and savings that discourage parents from saving for their children, and the 250 and 500 government contributions to the Child Trust Fund plus any top-ups made by parents to be index-linked.

It also suggests an extra Fund top-up for introduced at age 13-18, which is linked to achievement of financial education goals. The government should, it says, set a clear target for the number of vouchers to be deposited within the first three months of receipt and to set up a monitoring system to ensure this target is met.

The government should also encourage additional contributions to Funds from parents to further the savings habit, and along with the Financial Services Authority, the industry and parent groups, must put out a message on savings that makes the subject exciting and encouraging to children.

Staurt Bernau, executive director of Nationwide, says: Nationwide calls for the government, industry and parents to work together to ensure young people get the financial start in life they deserves. We believe this action plan is the first step to addressing this problem. If our recommendations are taken on board, todays children will be better equipped to deal with their financial futures.