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Family Finances - UK - May 2016

“Balancing day-to-day expenses like food, bills and childcare makes it difficult for families to save and plan for the long term. Changing family dynamics are also putting added pressure on family finances. More ‘adult children’ are choosing to remain in the family household, and as such, their need for additional support is affecting both parents’ and grandparents’ financial situation.”

Jessica Galletley, Financial Services Analyst

This report looks at the following areas:

  • Older children put pressure on short and long-term finances
  • Families need help prioritising savings goals
  • Gendered responsibilities endure as women take on more

Families with children living in the household are under a lot of financial pressure. The cost of living and a struggle to save mean many families do not feel confident about their financial security. A need to manage day-to-day finances in order to stay on budget and avoid taking on further debt means planning for longer-term goals like retirement is suffering.

As more young people need financial support when finishing school or university, household finances are feeling the pressure. Parents and grandparents are also increasingly offering financial support to help young adults onto the housing ladder.

This Report explores families’ financial priorities and attitudes towards managing family finances. It explores the challenges they face, particularly in terms of balancing both short and long-term priorities, and how these are influenced by wider changes in the economy. It looks at how men’s and women’s financial responsibilities within the family are changing, with women taking an increasingly larger role, and how this will affect family finances going forward. It also explores how changing family demographics are influencing both parents’ and grandparents’ attitudes towards family finances.

This Report defines families as households where there are children present. This includes biological children, adopted children, stepchildren or the children of a partner who also lives within the household.

The Report includes families where there are dependent children present (under the age of 18), and non-dependent children (over the age of 18).

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Table of contents

  1. Overview

    • What you need to know
      • Report scope and definitions
      • Executive Summary

          • The market
            • Proportion of families with dependent children falling
              • Figure 1: UK households and family types, 1996-2015
            • Proportion of married couple families declining
              • Families struggle to save
                • Household income going further
                  • The consumer
                    • Consumers struggle to balance debt repayments and saving
                      • Reducing expenses means compromising on bills
                        • Figure 2: Financial priorities of families, April 2016
                      • Balancing short and long-term finances is a challenge
                        • Figure 3: Financial planning behaviour, April 2016
                      • Less than half feel financially secure
                        • Figure 4: Confidence in family finances, April 2016
                      • Concerns for those reaching adulthood
                        • Figure 5: Financial planning behaviour regarding children, April 2016
                      • Parents educate their children through pocket money
                        • Apps can help with managing family finances
                          • Figure 6: Attitudes towards family finances, April 2016
                        • Changing gender roles reflected in financial responsibilities
                          • Figure 7: Financial responsibility – Those selecting ‘mostly/ entirely me’, by gender, April 2016
                        • What we think
                        • Issues and Insights

                          • Older children put pressure on short and long-term finances
                            • The facts
                              • The implications
                                • Families need help prioritising savings goals
                                  • The facts
                                    • The implications
                                      • Gendered responsibilities endure as women take on more
                                        • The facts
                                          • The implications
                                          • The Market – What You Need to Know

                                            • The ‘traditional’ family set-up is in decline
                                              • Older children choosing to remain at home
                                                • Wage growth outpacing that of CPI…
                                                  • …but household debt is still rising
                                                  • The Family Environment

                                                    • Proportion of families with dependent children falling
                                                      • Figure 8: UK households and family types, 1996-2015
                                                    • Older children choosing to remain in the family household
                                                      • Proportion of married couple families declining
                                                        • Figure 9: Number of families, by family type, 2000-15
                                                      • Economic factors contributing to the decline in marriage
                                                        • Lone-parent families driven by financial independence
                                                        • The Market Environment

                                                          • Families struggle to save
                                                            • Figure 10: Value of savings and investments among those living with their/their partner’s children, April 2016
                                                            • Figure 11: Trends in activities done and consider to do, February 2016
                                                          • Launch of Universal Credit
                                                            • Household income going further…
                                                              • Figure 12: Consumer price index and average weekly earnings growth, January 2011- January 2016
                                                            • …but household debt is rising
                                                              • Figure 13: Quarterly gross and net (amount outstanding) unsecured lending to individuals, excluding the Student Loans Company, not seasonally adjusted, March 2009-September 2015
                                                          • The Consumer – What You Need to Know

                                                            • Consumers struggle to balance debt repayments and saving…
                                                              • …but less than half feel their family is financially secure
                                                                • Families are engaged with their finances
                                                                  • Concerns for those reaching adulthood
                                                                    • Changing gender roles reflected in financial responsibilities
                                                                    • Financial Priorities of Families

                                                                      • Families prioritise repaying debts…
                                                                        • …but repayments hinder longer-term planning
                                                                          • Prioritising short-term savings
                                                                              • Figure 14: Financial priorities of families, April 2016
                                                                            • Short-term over long-term saving
                                                                              • Bringing the fun to saving
                                                                                • Reducing expenses means compromising in other areas
                                                                                  • Apps can help families to identify where to save money
                                                                                    • Children’s education is a long-lasting burden on families
                                                                                      • Women more focused on short-term goals
                                                                                        • Figure 15: Financial priorities for families, by gender, April 2016
                                                                                      • Priorities dependent on financial situation
                                                                                        • Figure 16: Financial priorities, by financial situation, April 2016
                                                                                      • Younger families have more priorities
                                                                                        • Figure 17: Repertoire of financial priorities, by age, April 2016
                                                                                    • Managing Family Finances

                                                                                      • Majority of families are engaged with their finances…
                                                                                        • Figure 18: Financial planning behaviour, April 2016
                                                                                      • …but this is open to interpretation
                                                                                        • Balancing short and long-term finances is a challenge
                                                                                          • Advice can help people to meet their financial goals
                                                                                            • Figure 19: Agreement with the statement ‘I would like to review/plan my family’s finances with a financial adviser’, by financial priorities, April 2016
                                                                                        • Confidence in Family Finances

                                                                                          • Less than half feel financially secure
                                                                                            • Women more concerned about their family’s future
                                                                                              • Families concerned over changes to benefits
                                                                                                • Figure 20: Confidence in family finances, April 2016
                                                                                              • Older stay-at-home children put pressure on family finances
                                                                                                  • Figure 21: Agreement with the statement ‘I feel that my family is financially secure’, by age of children living in the household, April 2016
                                                                                                • Marriage has a key role in financial security
                                                                                                  • Single-parent families will drive demand for adapted products
                                                                                                    • Figure 22: Agreement with the statement ‘I feel that my family is financially secure’, by marital status, April 2016
                                                                                                • Financial Planning and Children

                                                                                                  • Confidence is key for parents to set a good example
                                                                                                    • Figure 23: Financial planning behaviour regarding children, April 2016
                                                                                                  • Parents expect to support non-dependent children
                                                                                                    • Concerns for those reaching adulthood
                                                                                                      • Figure 24: Agreement with the statement ‘I am worried about my children’s future financial security’, by age of children, April 2016
                                                                                                  • Attitudes towards Family Finances

                                                                                                    • Parents educate their children through pocket money
                                                                                                      • Apps for parents and children
                                                                                                        • Apps can help with managing family finances
                                                                                                            • Figure 25: Attitudes towards family finances, April 2016
                                                                                                          • Over a third agree that leaving an inheritance is important…
                                                                                                            • …but attitudes towards inheritance are changing
                                                                                                              • Family discussions about retirement planning are important
                                                                                                                • Other family members have an important role
                                                                                                                • Financial Responsibility in the Family

                                                                                                                  • Changing gender roles reflected in financial responsibilities…
                                                                                                                    • …but the type of responsibilities have a clear split
                                                                                                                        • Figure 26: Financial responsibility – Those selecting ‘mostly/entirely me’, by gender, April 2016
                                                                                                                      • Childcare responsibilities most likely to be shared
                                                                                                                        • Figure 27: Financial responsibility, April 2016
                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                        • Abbreviations
                                                                                                                          • Consumer research methodology
                                                                                                                          • Appendix – Overview of Selected PFM Apps

                                                                                                                            • Mobile and tablet applications
                                                                                                                              • Money saving apps
                                                                                                                                • Personal financial management apps
                                                                                                                                  • Pocket money apps

                                                                                                                                  Companies Covered

                                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                                  Family Finances - UK - May 2016

                                                                                                                                  US $2,828.70 (Excl.Tax)