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Saving and Investing for Children - UK - May 2017

Published By :

Mintel

Published Date : May 2017

Category :

Wealth Management

No. of Pages : N/A

Parents naturally feel the pressure to plan for their children’s future, but with limited investment and focus in the sector children’s saving and investment providers are doing little to support this. Low interest rates mean reduced incentives to save, although it also leaves a huge opportunity for providers to improve the value they add, giving parents the flexibility and control they want.

Table of Content

OVERVIEW
What you need to know
Products covered in this Report

EXECUTIVE SUMMARY
The market
Two thirds of parents save for their children
Figure 1: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
Junior ISAs continue to show strong growth
Figure 2: Amounts subscribed to Junior ISAs, £m, 2014/15-2015/16
Low interest rates have left the market feeling uncompetitive
Parents are less likely to describe their finances are healthy
Figure 3: Current financial situation – Parents versus non-parents, February 2016
Companies and brands
Stock and Shares Junior ISAs offer competitive potential
Savings adspend suffers while investment spend swells
The consumer
Two thirds of parents save for their children
Figure 4: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
Child Trust Fund legacy continues despite freedom to swap
Figure 5: Products used for children's savings, February 2017
Online management can help deliver sought-after parental controls
Figure 6: Interest in features of a new children's savings product, February 2017
Parents seek rewards for saving regularly
Figure 7: Interest in incentives of a new children's savings product, February 2017
Parents expect their money to be used wisely
Figure 8: Attitudes towards saving for children, February 2017
What we think

ISSUES AND INSIGHTS
Providers should cede flexibility as parents seek supreme control
The facts
The implications
Dual parent and child benefits could attract Millennials
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
An estimated 10.7 million parents are currently saving for children
Junior ISAs grow at the expense of Children’s Bonds
Proportion of households with dependent children is falling
The child population is growing but interest rates are low

MARKET SIZE
Almost two thirds of parents are saving for their children
Figure 9: Proportion of parents who are saving for their children, February 2017
Child Trust Funds dominate product ownership
Figure 10: Proportion of parents who own various saving and investment products for the purposes of saving for children, February 2017
A note about Mintel’s estimates

MARKET SEGMENTATION
Junior ISAs continue to show strong growth
Figure 11: Number of Junior ISAs, amounts subscribed and average subscription, 2011/12-2015/16
NS&I Children’s Bonds to lose more favour following rate cut
Figure 12: NS&I Transactions with investors in children’s bonds, 2015-16*

THE FAMILY ENVIRONMENT
The proportion of families with children is stable
Figure 13: UK households and family types, 1996, 2001, 2006 and 2016
The trend towards fewer children per family has continued
Figure 14: Percentage of families with dependent children: by number of dependent children in the family, 2006 and 2016

MARKET DRIVERS
Low interest rates have left the market feeling uncompetitive
Figure 15: Average monthly quoted cash deposit and ISA interest rates, January 2008-January 2017
Funding for Lending has reduced providers’ commercial interest
The child population is expected to grow
Figure 16: Projected size of UK child population, 2016, 2021, 2026 and 2031
Parents are less likely to describe their finances are healthy…
Figure 17: Current financial situation – Parents versus non-parents, February 2016
…and are less certain about the immediate future
Figure 18: Confidence in financial situation over the coming year – Parents versus non-parents, February 2016

COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Limited product development and innovation
Stocks and Shares Junior ISAs offer competitive potential
Savings adspend suffers while investment spend swells

COMPETITIVE STRATEGIES
Banks have left space for building societies and challengers
Skipton Building Society launches two accounts to meet specific goals
Santander and HSBC target adult account ownership in the future
Regular savings products offer tempting rates
Stocks and Shares ISA providers make a play for child savings
MoneyBox
Orbis Access

ADVERTISING AND MARKETING ACTIVITY
Savings adspend falls to a new low, but investment-related spend grows
Figure 19: Total above-the-line, online display and direct mail advertising expenditure on investment and savings products, 2012/13-2016/17
Marginal spend on children’s saving and investment products
Nationwide bucks the trend with major TV campaign
Investment Junior ISAs also driving some adspend activity
Figure 20: Above-the-line, online display and direct mail adspend on identified children’s saving and investment products, 2016/17
Other selected marketing activity
Nielsen Ad Intel coverage

THE CONSUMER – WHAT YOU NEED TO KNOW
Two thirds of parents save for their children
Child Trust Fund legacy continues despite freedom to swap
Parents seek out maximum control over their children’s savings
Parents are keen to be rewarded for regular saving
Parents expect their money to be used according to their wisdom

WHO SAVES FOR CHILDREN?
Two thirds of parents save for their children…
Figure 21: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
…and more than a quarter of grandparents too
Figure 22: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
Men are more likely to say they are saving for children than women
Figure 23: Proportion who are parents of children under 18 and those who are saving for them, by gender, February 2017

PRODUCTS USED FOR CHILDREN’S SAVINGS
Child Trust Fund legacy continues despite freedom to swap
Figure 24: Products used for children's savings, February 2017
Older parents strongly favour instant-access options
Figure 25: Products used for children's savings, by age, February 2017

INTEREST IN CHILDREN’S SAVINGS ACCOUNTS FEATURES
Online management can help deliver sought-after parental controls
Figure 26: Interest in features of a new children's savings product, February 2017
The passbook has a limited appeal, dwarfed by online channels
Figure 27: Interest in features of a new children's savings product, by age, February 2017
Providers with wealthier customers can cross-sell using online services
Figure 28: Interest in features of a new children's savings product, by demographic status, February 2017

INTEREST IN CHILDREN’S SAVINGS ACCOUNT INCENTIVES
Parents seek rewards for saving regularly
Figure 29: Interest in incentives of a new children's savings product, February 2017
Millennial parents are the most likely to look for parental rewards
Figure 30: Interest in incentives of a new children's savings product, by age, February 2017

ATTITUDES TOWARDS SAVING FOR CHILDREN
Parents expect their money to be used wisely…
…and secretive saving helps ensure sensible spending
A quarter of parents have active plans for their children
Figure 31: Attitudes towards saving for children, February 2017
Socio-economic differences in parental approach to saving
Figure 32: Attitudes towards saving for children, by demographic status, February 2017

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

List of Table

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