Parents are planning to spend less on their children this year, new research indicates.

A study by Engage Mutual Assurance shows that debt fears have resulted in tightened family budgets, with 44 per cent of those with children under the age of 18 claiming to be struggling to make ends meet.

While just over half of respondents to the firm's survey report preparing to cut back on the amount they spend on their offspring in 2008, more than one in five parents are cutting back on clothes spending, while expenditure on toys is being minimised by 26 per cent and investment into savings vehicles for children limited by 22 per cent.

Karl Elliott, 3GB spokesperson for Engage Mutual Assurance, comments: "With the increased cost of food, fuel and mortgages taking effect, our research shows that many parents anticipate finding it increasingly difficult to make ends meet in the year ahead."

The Bank of England cut the base rate of interest by a quarter-point this month, taking the cost of borrowing to 5.25 per cent.
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