Westpac Banking : 01/01/2017 New Year Financial Head Start

Westpac pledges $200 for Australian children born in 2017 to celebrate the bank's 200 year in business

Key statistics from The Westpac Financial Future Report:

• 86 per cent of parents and grandparents agree that setting up a savings account for children at a young age helps to set them up for success later in life;
• Parents' main motivation for opening their child's savings account from an early age centres around giving them a financial head start (55 per cent) and helping them understand the value of money as early as possible (46 per cent);
• 66 per cent of parents are worried about how financially savvy their children will be by the time they finish high school;
• For those parents/grandparents who didn't have a savings account as a child, 74 per cent wish their parents or grandparents had set up an account for them during their childhood; and
• 71 per cent of Australian children under the age of five have a savings account.

This New Year's Day, Westpac has announced that it will offer Australian babies born in 2017 a $200 contribution into their own savings account that they can access when they are 16 years old.

The 'Bump' initiative is designed to encourage positive savings habits early in life for the 300,000 babies expected to be born this year, and to help parents and grandparents kick start a brighter financial future for the next generation of Australians. Parents of eligible babies can apply for a Westpac Bump Savings account online at westpac.com.au/dearbump. Westpac expects about a quarter of the babies born to take up the offer.

To mark Westpac's 200th anniversary, the $200 contributions will begin to be deposited into the accounts of registered babies from the 8th April 2017, and ongoing for the remainder of the year.

George Frazis, Chief Executive Consumer Bank at Westpac Group, said the initiative reflects Westpac's commitment to supporting the future of Australia, by providing a helping hand to parents and grandparents to instill positive financial habits in their children from a young age.

'The Bump initiative helps Westpac to mark the beginning of our bicentennial year in the best way possible - by investing in the next generation of Australians and inspiring good savings habits with the potential to have a lifelong impact,' Mr Frazis said.

Coinciding with the announcement is the launch of The Westpac Financial Future Report, which shows 86 per cent of parents, grandparents and prospective parents believe that opening a savings account for children at an early age sets them up for success later in life, yet only 71 per cent of Australian children under five years of age have one.

In the New Year, Australian parents will be focusing on instilling positive financial habits in their children, with the Report finding that a major motivation in setting up their children's bank accounts was to help them understand the value of money from a young age.

Mr Frazis added: 'Setting up our future generations for success will help Australia to thrive. Teaching children to save from an early age is known to have a positive impact on future financial stability, so we're encouraging all parents and grandparents to help kick start this learning process and help them start preparing for a brighter future on this new year's day.

'By building on an initial $200 deposit at birth with a $20 contribution every week, for example, will potentially amass approximately $19,000 in savings by the time the child turns 16. That's a significant financial head start for any child and can be put towards future education, life experiences such as a gap year or a deposit on a first home.

'The Report also found that the majority (66 per cent) of Australian parents and grandparents believe children should have restricted access to their savings until they are over the age of 16.

'We've listened to parents and grandparents and believe the Bump Savings account will demonstrate the benefits of long term savings to young people, so by the time they turn 16, they might consider continuing to save their money,' Mr Frazis concluded.

The Bump initiative builds on the many programs introduced as part of Australia's first bank's 200 year celebrations, all dedicated to supporting the future prosperity of the nation. From the Westpac Bicentennial Foundation scholarship program supporting 100 of the nation's best and brightest people to further their education each year, to the Businesses of Tomorrow program which will highlight 200 businesses with the potential over time to change the face of Australian business for the better; the Bump initiative will help many Australians of the next generation to kick start a brighter financial future.

Registrations of interest for a Westpac Bump Savings account with the $200 deposit open today at westpac.com.au/dearbump

New Year Money Smart Tips for Parents

Start small and start early

Set aside a small amount of money in to an account on a monthly or weekly basis, to build a nest egg for your child for them to continue as they grow.

For example, by saving $20 a week from when a child is born, at 16 they will have approximately $19,000 (at 1.5 per cent interest).

Teach the value of money

Encourage children to make spending decisions early. Teach them what they may need to do to earn money (i.e. washing the car), then how much of that money they will use up by purchasing the item they want.

Set goals with your child

Work out what they want to do with their money. Especially if the child is looking after their money carefully, it's important that you work out what they can spend it on if they wish. It's not fun saving everything, especially if the money is a gift, but you can, for example, spend half on a toy and save the remaining.

Set a good example

By referring to the value of money in everyday life, you'll begin to convey the importance of looking after it. Simple things like explaining why you're buying a cheaper brand from the supermarket over a more expensive brand can be beneficial.

About the Bump initiative

Westpac will provide the opportunity for Australian babies born between 1 January 2017 and 31 December 2017 to receive a $200 contribution into their own Bump Savings account opened from 1 January - 31 December 2017, with a grace period until 31 May 2018. The Bump initiative is designed to encourage positive savings habits early in life for the 300,000 babies expected to be born during this period, and to help parents and grandparents kick start a brighter financial future for the next generation of Australians.

About the Westpac Financial Future Report

The Westpac Financial Future Report, powered by Vision Critical, surveyed 1593 Australians with children or grandchildren under the age of 12 and 50 prospective parents (total sample of 1641). The survey was conducted online between 23 September and 5 October 2016.