GenNow parents saving for childrens education

Written by Sajan C Kumar | Chennai | Updated: Mar 24 2010, 02:12am hrs
Saving for children is the top-most priority for parents across the country. They are even willing to cut on expenses on shopping and outings to save for their childrens education, according to Young Scholar Insights, a survey by insurance major Aviva. The survey was conducted by IMRB India on behalf of the insurance major. According to the survey, parents start saving when the child is less than 5 years. In places like Chennai, the process is initiated as soon as the child is born. When it comes to investment instruments, insurance has been perceived as the most relevant instrument for children. Most people believe in insurance and child plans to secure their childs future.

The survey says out of the 86% people who save, 64% save for their children, about 93% save for the childs education, about 77% parents are concerned about the rising cost of education and close to 50% of parents start saving when the child is 0-3 years old.

Rishi Piparaiya, director, Aviva India, says, As the survey suggests, parents believe in education is insurance, in order to secure a bright future for their children. This is reflected by the growing urgency among parents to combat the rising cost of education and provide holistic education for their children. While higher education and school top the chart of concerns for parents, marriage is ranked relatively low. Arguably, a majority still consider traditional professions like doctor/engineer more attractive.

Other financial instruments in which parents invest are jewellery/ gold, national savings certificate, fixed deposits in banks, life insurance policies and child plans from insurance companies. The primary reason for this can be attributed to the fact that parents seek safe returns and flexibility when investing for their children.

India has an increasing population of young parents. In 2007, a staggering 51% of Indias population of 1.1 billion was under the age of 25, and two-thirds under 35. By 2020, the average age of an India will be 29 years and hence, education will be the differentiator and enabler for employment and growth, the survey adds.

The results of the survey are based on 2,250 interviews across 10 cities - Delhi, Lucknow, Kolkatta, Bhubaneshwar, Mumbai, Ahmedabad, Chennai, Bangalore, Hyderabad and Kochi.