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CHILDRENS ATTITUDES TOWARDS SAVING - UK - JULY 2018

Published By :

Mintel

Published Date : Jul 2018

Category :

Banking

No. of Pages : N/A

Despite parents’ commitment to save, a decade of low interest rates, regulatory interventions and limited developments in the market has reduced the appeal of child-specific products. The recent rate rise and digital innovations mean there are now plenty of opportunities for providers to shake things up and offer something different, both for parents and their children

Table of contents
OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Junior cash ISAs grow in volume but stocks and shares fall out of favour
Figure 1: Amounts subscribed to Junior ISAs and average subscription per account, 2012/13-2016/17
Households with two or more children still majority at 55%
Figure 2: Percentage of families with dependent children, by number of dependent children in the family, 1997, 2007 and 2017
The child population is projected to grow
Figure 3: Share of total population, by selected age group, 2018-33
First increase of interest rates in more than a decade while monetary policy schemes come to an end
Parents are less likely to describe their finances as healthy and less confident about financial prospects
British children spend an average of £25 a week by the time they reach 15
Figure 4: Children’s average weekly spend, by age, 2014/15-2016/17
Companies and Brands
Big brands have remained passive in a low-interest environment
Prepaid cards provide a safe alternative to monitor and control spending
Savings adspend more than doubles in 2017/18 while investment-related spend falls
The consumer
83% of parents are saving for their children
Figure 5: Proportion of parents who are saving for their children aged 10-15, by gender, March 2018
Banks and building societies are the top choice, but piggybanks still appealing
Figure 6: How parents save for their children, March 2018
Parents still not persuaded to transfer CTFs into Junior ISAs
Figure 7: Products held by parents saving for their children, March 2018
Parents are confident in their actions but reactive about education
Figure 8: Parents’ attitudes towards children’s savings, March 2018
63% of children say they save money themselves
Figure 9: Who children say is saving money for them, March 2018
Parents could be doing more money-related activities with their children
Figure 10: Child and parent saving activities, March 2018
Children need to be prompted to engage with savings
Figure 11: Children’s saving activities, March 2018
Two thirds of kids say they are in control of their money
Figure 12: Children’s attitudes towards saving, March 2018
What we think
ISSUES AND INSIGHTS
The time is ripe for a turn in the tide
The facts
The implications
Parents are committed to saving but need support and want flexibility
The facts
The implications
Children’s attention needs to be captured, and early
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Junior cash ISAs grow in volume but stocks and shares fall out of favour
NS&I Children’s Bonds are being phased out
Child population continues to grow
First base rate rise in more than a decade
Parents are less likely to describe their finances as healthy and less confident about financial prospects
CHILDREN’S SAVINGS PRODUCTS
Junior cash ISAs grow in volume but stocks and shares fall out of favour
Figure 13: Number of Junior ISAs, amounts subscribed and average subscription, 2012/13-2016/17
NS&I Children’s Bonds are being phased out
Figure 14: NS&I transactions with investors in children’s bonds, 2016 and 2017*
Initiative launched to uncover forgotten CTFs
THE FAMILY ENVIRONMENT
Composition of households remains stable, but total numbers continue to grow
Figure 15: UK households and family types, 1997, 2007, 2012 and 2017
Most family households have two or more children
Figure 16: Percentage of families with dependent children, by number of dependent children in the family, 1997, 2007 and 2017
The child population is projected to grow
Figure 17: Projected size of UK child population, 2018, 2023, 2028 and 2033
Figure 18: Share of total population, by selected age group, 2018-33
MARKET DRIVERS
The first rate rise in a decade
Figure 19: Average monthly quoted cash deposit and ISA interest rates, January 2011-May 2018
Funding for Lending and Term Funding Schemes draw to an end
Parents are less likely to describe their finances as healthy…
Figure 20: Current financial situation – parents versus non-parents, April 2018
…and are less confident about their financial prospects
Figure 21: Confidence in financial situation over the coming year, parents versus non-parents, April 2018
British children spend an average of £25 a week by the time they reach 15
Figure 22: Children’s average weekly spend, by age, 2014/15-2016/17
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Big brands have remained passive in a low-interest environment
Best rates tend to come with punishing conditions
Prepaid as alternative to debit cards and cash meeting demand for pocket money solutions
Adspend on savings more than doubled in 2017/18
COMPETITIVE STRATEGIES
Competition has suffered from the low-rate environment
Halifax launches best-in-town regular saver, but interest is downgraded after a year
Best rates tend to come with punishing conditions
Prepaid as alternative to debit cards and cash meeting demand for pocket money solutions
Digital solutions for pocket money
RoosterMoney
Figure 23: RoosterMoney app
Money Monster
Figure 24: Santander’s Money Monsters
Pigzbe
Figure 25: Pigzbe Kit
CASE STUDY: SHEPHERDS FRIENDLY’S YOUNG SAVER PLAN
ADVERTISING AND MARKETING ACTIVITY
Adspend on savings more than doubled in 2017/18…
Figure 26: Total above-the-line, online display and direct mail advertising expenditure on investment and savings products, 2013/14-2017/18
…but spend on children’s savings and investment products is marginal
Other selected marketing activity
Social media and online search
Sponsorships and partnerships
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
83% of parents are saving for their children
Banks and building societies are the top choice, but piggybanks still appealing and online-only providers show high potential
Parents still not persuaded to transfer CTFs into Junior ISAs
Parents are confident in their actions but reactive about education
63% of children say they save money themselves
Parents could be doing more money-related activities with their children
Two thirds of kids say they are in control of their money
WHO SAVES FOR CHILDREN?
83% of parents are saving for their children
Figure 27: Proportion of parents who are saving for their children aged 10-15, March 2018
Vulnerable consumers under the most pressure
Dads are more likely to save regularly than mums
Figure 28: Proportion of parents who are saving for their children aged 10-15, by gender, March 2018
Parents of older children are less likely to save on a regular basis
Figure 29: Proportion of parents who are saving for their children aged 10-15, by child’s age, March 2018
HOW PARENTS SAVE FOR CHILDREN
Piggybanks still appealing…
Figure 30: How parents save for their children, March 2018
…but banks and building societies are the top choice
Parents likely to consolidate saving methods as children get older
Figure 31: Number of ways of saving for children, by age of child, March 2018
PRODUCTS USED FOR CHILDREN’S SAVINGS
Parents still not persuaded to transfer CTFs into Junior ISAs
Figure 32: Products held by parents saving for their children, March 2018
Children’s savings accounts offer an attractive, straightforward alternative
Transitioning child-specific products into adult accounts could support long-term savings
PARENTS’ ATTITUDES TOWARDS CHILDREN’S SAVINGS
More than half of saving parents keep the amount a secret
Figure 33: Parents’ attitudes towards children’s savings, March 2018
Confidence is high that parents are making the right choices
Figure 34: Agreement with the statement “I feel confident that I am saving/investing for my child in the best possible way”, by current financial situation, March 2018
Most parents use paid chores to teach kids about money
Figure 35: Agreement with the statement “I offer my child the chance to earn money by helping me with tasks (eg household chores)”, by child and parent gender, March 2018
Three in five will only talk to their child about savings when they show an interest…
…while 71% only allow approved purchases
Figure 36: RoosterMoney’s Savings Goals Feature
WHO CHILDREN SAY SAVES FOR THEM
63% of children say they save money themselves
Figure 37: Who children say is saving money for them, March 2018
Children of older parents more likely to say their parents are saving for them
Figure 38: Who children say is saving money for them, by age of parent, March 2018
The Bank of Gran and Grandad?
CHILDREN’S SAVING ACTIVITIES
Parents could be doing more money-related activities with their children
Figure 39: Child and parent saving activities, March 2018
Learning about money, the fun way
Children may need some nudging to get them more involved in saving money
Figure 40: Children’s saving activities, March 2018
Gender stereotypes reflected in children’s savings goals
Figure 41: Children’s savings goals, by gender, March 2018
CHILDREN’S ATTITUDES TOWARDS SAVING
Two thirds of kids say they are in control of their money
Children want to talk about money and need someone to listen
Figure 42: Children’s attitudes towards saving, March 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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