Children's Savings Raided as Mortgage Costs Increase

  • One in five (19%) parents and grandparents have withdrawn funds to cover mortgage costs from the investments of children or grandchildren they save for
  • Every day in 2023, on average, almost £13 million has been withdrawn from children’s savings by parents and grandparents to help them cope financially with the ongoing cost of living crisis
  • Since the start of 2022 children’s savings have been raided to the tune of £4.1 billion


New research from Direct Line Life Insurance1 reveals one in five (19%) parents and grandparents have withdrawn funds to cover mortgage costs from the investments of children they save for, since the start of 2022. So far in 2023, parents and grandparents have withdrawn almost £13 million a day from their children’s savings to help them cope financially with the ongoing cost of living crisis. On average each adult dipping into the savings of their children or grandchildren has withdrawn £433. It is predicted that an additional £2.1 billion will be withdrawn by parents and grandparents from their children’s savings before the end of the year, at a rate of £408 per adult. 

The family savings culture in the UK is under threat due to the ongoing cost of living crisis, with inflation and interest rates forcing families into tough spending decisions. Over half (53%) of parents and grandparents who save for their children have already, or plan to, reduce the amount they save or stop altogether. On average parents and grandparents have, or expect to, reduce savings contributions for their children by £123 a month.

UK parents save for a total of 18 million children with grandparents saving for a total of 6.1 million grandchildren. Savings levels have reduced in just 12 months, with a 15 per cent decrease in the number of children whose parents are saving for them compared to 20222. The average parent saving for a child has set aside £3291.5, putting the total savings pot UK-wide at almost £80 billion down 15% from the £94.1 billion in 2022.

It is not only mortgage costs that are forcing families to dip into children’s savings. Other reasons include the cost of childcare (22 per cent), clothing (21 per cent) and food costs (19 per cent), with families under pressure to cover many of the essentials.

Table one: Main reasons why parents/grandparents are drawing on children’s savings 

Reason for taking money out throughout 2023 to date



22 per cent


21 per cent

Paying for food costs

19 per cent

Travel costs

18 per cent

Energy costs

16 per cent

Paying for a pet

16 per cent

Pay for school related costs (new uniforms, trips)

15 per cent

Debt payments e.g., credit cards

14 per cent

Fuel costs

10 per cent

Source: Direct Line Life Insurance 2023


Hannah Donnison, Communications Manager at Direct Line Life Insurance, commented: “With interest rates rising significantly families are having to make tough choices regarding their finances and even having to raid their children’s savings to cover costs. With inflation remaining high and continued pressure on household budgets, it is important to remember the value of protection should the worst happen and life insurance can provide a valuable safety net for families.”


Notes to Editors


  1. Omnibus research commissioned among 2000 UK adults between 23rd June 2023 and 27th June 2023
  2. Omnibus research commissioned among 2000 UK adults between 14th June 2022 – 17th June 2022


For further information please contact:

Ewan Robertson

Head of News and Issues

Email: [email protected] 

Direct Line

Started in 1985, Direct Line became the first UK insurance company to use the telephone as its main channel of communication. It provides motor, home, travel and pet insurance cover direct to customers by phone or on-line.

Direct Line general insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line and UK Insurance limited are both part of Direct Line Insurance Group plc.

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