Saving accounts for parents

Parents who expect to shell out for their children's college or university fees should think about saving for themselves as well, says the AA.

The AA has found that 11 per cent of savers put money aside to help meet education costs, nearly half of those doing so for over five years.

Lloyd East, director of AA savings, said: "With young people likely to continue living with mum and dad three years longer after finishing full-time education than ten years ago, parents can expect to be funding their kids for longer than they had bargained for."

He continued: "With young people typically leaving university with debts of at least £8,600 and having to repay their student loans, coupled with the high cost of setting up home, many find they have little choice but to return to live with their parents - perhaps until their late twenties.

"This means that parents may have to put off their plans for moving, travelling or well-earned luxuries for much longer."

Mr East says it is vital parents ensure their savings work hard for them - yet most put their money in high street bank accounts that pay a very poor rate of return.

"For those with children starting their A-levels, now is a good time to review their savings - and finding an account that pays a decent rate of interest should be a priority."