Just over one in 10 (11%) parents are currently investing on behalf of their children, Alliance Witan has found.

The investment trust said that while financial literacy is a priority for some parents, with 29% saying they teach their children about saving and investing, this isn’t being translated into action.

While higher than those investing, just 25% of parents say they build cash savings for their children.

Alliance Witan said that of those parents who are currently investing, 56% shared that their primary motivation is to put their child in a better financial position than they were in.

This is followed by 44% expressing a desire to gift their child a lump sum once they become an adult.

Furthermore, 42% stated that they want to help their child onto the property ladder, while 33% said they are investing to help cover the cost of university fees and maintenance.

Among those parents who have already started investing for themselves, Alliance Witan said that “surprisingly few” are also actively investing on behalf of their children.

Of investors using platforms like Hargreaves Lansdown and Fidelity to buy shares or funds, just 33% say they are actively investing for their children.

This drops to 30% for investors using pre-made investment products, and 27% for those investing via financial advisers or brokers.

Senior director at Willis Towers Watson, which manages Alliance Witan, Mark Atkinson, stated: "All parents want the best for their children, but our research shows that very few have taken the proactive step of investing and taking advantage of tax-free junior ISAs. With the cost of university rising, and breaking into the housing market becoming an increasingly difficult objective for younger people, parents should be thinking about starting to invest for their children as early as possible.

"Even small monthly deposits over a longer time horizon can result in significant pot sizes thanks to the miracle of compounding, while taking a long-term investing view removes the worry of shorter-term market volatility."

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