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Children's Attitudes towards Saving - UK - July 2018

“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.”

– Irene Salazar, Financial Services Analyst

This report examines the following issues:

  • The time is ripe for a turn in the tide
  • Parents are committed to saving but need support and want flexibility
  • Children’s attention needs to be captured, and early

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Table of contents

  1. 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

                                                                                                                            Children's Attitudes towards Saving - UK - July 2018

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