Parents who spend an average of £163 on must-have gifts for their children at Christmas could save more than £4,000 if they invested it instead.

That is according to Halifax who looked into the sorts of savings that could be made should parents place money into different accounts. On average, parents purchased between nine and ten presents per child despite the fact that more than a third of parents believe children aged between six and 18 years would prefer to receive money.

Those parents whose child received money said they thought they received around £88 on average, with a third of them saying that the children spend all of the cash they are gifted.

The potential of saving

Fewer than one in ten of the children saved the money, potentially missing out on vital interest payments that could boost their total.

Should that money be placed in a savings account from the outset it would mean the children could have a nest egg totalling more than £4,300 by the time they are 18 years old.

Even putting a third of the money aside would accumulate nearly £1,500 more than the average savings account held by most parents for their children. Two thirds of parents had savings accounts for their children amounting to £1,255, well below the potential nest egg that could be accumulated by saving on present buying.

So, instead of purchasing the latest Frozen dolls, Star Wars toys and John Lewis Penguins, parents and their children could benefit a different form of gift.

However, most parents do not wish to forego the gift-giving aspect of the festive celebrations despite the research highlighting just how much they could save.

By investing cash, parents could provide a much more lucrative 18th Christmas present to their kids – using saved funds to give children something truly special and beneficial.

Different approaches across the UK

There was also widespread variation across the UK in regards to how much parents were willing to spend on their children at Christmas.

Children in Scotland had the most spent on them, averaging £213 per child, while parents in the North and South of England spent the least with presents totalling just £138.

This was partly because parents in both these English regions were most likely to believe that their children would prefer money to presents (in 36% of cases in the North and 35% in the South).

Of those children who do receive money for Christmas, those in the East of England and Wales were found to receive the most with around £140 gifted per child.