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Children's Attitudes towards Saving - UK - July 2019

Covered in this report

There are a number of types of children’s savings accounts, including easy-access accounts, regular savings accounts and fixed-term accounts or bonds. They tend to operate in the same way as savings accounts for adults, and are predominantly offered by banks and building societies. Some children’s savings accounts allow the child, if aged seven or above, to operate the account themselves, including the ability to deposit and withdraw money. Digital and online-only providers have entered the market by offering parents solutions aimed at managing pocket money that can also act as budgeting and saving tools, enabled by strict spending limits and restrictions while also facilitating financial education.

“Most children feel they have an element of the control in the way that they manage their money and spending, while parents do try to educate them in financial matters. Tools and services which help children better manage their finances are also becoming increasingly popular. Extra encouragement is required to help families discuss their finances, particularly among parents who are less confident when it comes to managing their own financial situation.”

– Douglas Kitchen, Financial Services Analyst

This report examines the following issues:

  • Encouraging the savings conversation is half the battle
  • Better representation of women will create a more family friendly savings environment

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Parents favour regular savings accounts
              • Figure 1: Products held by parents saving for their children aged 7-15, March 2019
            • Increase in junior ISAs is driven by stocks and shares products
              • Figure 2: Number of junior ISAs, amounts subscribed, 2013/14-2017/18
            • Families are struggling to save as children grow older
              • Figure 3: Saving activity, by age of children in the household, May 2019
            • Rate rise has little impact on at the top end of the children’s savings market
              • Companies and brands
                • Junior ISAs are set to grow their share of the market …
                  • … whilst there are new developments in children’s pocket money apps
                    • The consumer
                      • Over 50% save for their child on a regular basis
                        • Figure 4: Parents’ saving activity for children aged 7-15, March 2019
                      • Most parents choose to save with a bank or building society …
                        • Figure 5: How parents save for their children, March 2019
                      • … while the majority are saving for long-term goals
                        • Figure 6: Reasons for saving for children, March 2019
                      • Just under 40% of children know what their parents are saving for
                        • Figure 7: Children’s knowledge of their parents’ saving activities, March 2019
                      • Children are given some control over their finances
                        • Figure 8: Parents’ attitudes towards children’s money management, March 2018
                      • Most 10-15 year olds receive money as a gift
                        • Figure 9: Children’s source of income, March 2019
                      • Two fifths of child savers save all or most of their money
                        • Figure 10: Children’s saving activity, March 2019
                      • Most children feel in charge of their spending money
                        • Figure 11: Children’s attitudes toward money management, March 2019
                      • Children are interested in features that will help them save more effectively
                        • Figure 12: Children’s interest in features which help them save, March 2018
                      • What we think
                      • Issues and Insights

                        • Encouraging the savings conversation is half the battle
                          • The facts
                            • The implications
                              • Better representation of women will create a more family friendly savings environment
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Parents favour regular savings accounts
                                      • Junior stocks and shares ISAs grew by 20% in volume in 2017/18
                                        • Families are struggling to save as children grow older
                                          • Rate rise has little impact for the best children’s saving accounts
                                          • Children’s Saving Products

                                            • Regular savings accounts are the most popular choice for parents
                                              • Figure 13: Products held by parents saving for their children aged 7-15, March 2019
                                            • Older parents are still favouring Child Trust Funds
                                              • Figure 14: Products held by parents saving for their children aged 7-15, by parents age, March 2019
                                            • Junior ISAs experience a strong increase in 2017/18
                                              • Figure 15: Number of junior ISAs, amounts subscribed, 2013/14-2017/18
                                            • Amount invested in NS&I bonds falls as the product nears its end
                                              • Figure 16: NS&I transactions with investors in children’s bonds, 2017 and 2018
                                          • Market Drivers

                                            • Families with older children find it harder to save
                                              • Figure 17: Saving activity, by age of children in the household, May 2019
                                            • Number of households with dependent children reaches 8 million
                                              • Figure 18: Number of households with dependent children*, by type of household, 2010-2017
                                            • Over 70% of mums are in employment
                                              • Figure 19: Employment rates for men and women with dependent children*, 1996-2018
                                            • Household savings ratio continues to rise
                                              • Figure 20: Real household disposable income per head vs Real household spending per head vs the household savings ratio, Q1 2008-Q3 2018
                                            • Increase in interest rates is not reflected at the top end of the children’s savings market
                                              • Figure 21: Average monthly quoted cash deposit and ISA interest rates, January 2012-April 2019
                                          • Companies and Brands – What You Need to Know

                                            • Junior ISAs are set to grow their share of the market …
                                              • … whilst there are new developments in children’s pocket money apps
                                              • Competitive Strategies

                                                • Junior ISAs set to grow share of market
                                                  • One Family and Foresters Friendly target product …
                                                    • … as does NS&I
                                                      • Developments in children’s pocket money apps
                                                        • RoosterMoney becomes the latest to offer a prepaid card
                                                          • Gohenry partners with the NSPCC to encourage children to consider charitable giving
                                                            • Best regular savers only offer the headline rate for one year
                                                              • Brands use sponsorships and education to raise their profile
                                                              • The Consumer – What You Need to Know

                                                                • Over 50% save for their child on a regular basis …
                                                                  • Online-only accounts increase in popularity
                                                                    • Most parents are saving for long-term goals
                                                                      • Just under 40% of children know what their parents are saving for
                                                                        • Children are given some control over their finances
                                                                          • Most 10-15 year olds receive money as a gift
                                                                            • Most children feel in charge of their spending money
                                                                              • Children are interested in features that will help them save more effectively
                                                                              • Saving for Children

                                                                                • Over half of parents are saving for their child on a regular basis
                                                                                  • Saving for children is not priority for those with limited income
                                                                                    • Figure 22: Parents’ saving activity for children aged 7-15, March 2019
                                                                                • How Parents Save for their Children

                                                                                  • Online-only challengers are becoming increasingly popular
                                                                                    • Figure 23: How parents save for their children, March 2019
                                                                                  • Parents look for alternative solutions as children grow older
                                                                                    • Figure 24: How parents save for their children, by child’s age, March 2019
                                                                                  • Opportunities to encourage more formal saving
                                                                                    • Figure 25: How parents save for their children, by parents’ saving activity for children aged 7-15, March 2019
                                                                                • Parental Savings Goals

                                                                                  • Most parents are saving for the long term
                                                                                    • Increasing engagement in investment options
                                                                                      • Figure 26: Reasons for saving for children, March 2019
                                                                                    • Higher earners are more likely to be saving for multiple reasons
                                                                                      • Figure 27: Number of reasons for saving for children, by household income, March 2018
                                                                                  • Children’s Awareness of Parental Savings Activity

                                                                                    • Just under 40% of children know what their parents are saving for
                                                                                      • Figure 28: Children’s knowledge of their parents’ saving activities, March 2019
                                                                                    • Opportunity to engage teenagers as their financial needs change
                                                                                      • Figure 29: Children’s knowledge of their parents’ saving activities, by child’s age, March 2019
                                                                                  • Parental Attitudes towards Children’s Money Management

                                                                                    • Online money management skills are sometimes overlooked
                                                                                      • Figure 30: Parents ‘attitudes towards children’s money management, March 2018
                                                                                    • Children of the less financially secure are given less exposure
                                                                                      • Figure 31: Parents’ attitudes towards children’s money management, by financial situation, March 2018
                                                                                    • New initiatives can encourage mums to become more involved
                                                                                      • Figure 32: Parents’ attitudes towards children’s money management, by financial situation- CHAID – Tree output, April 2019
                                                                                  • Sources of Children’s Money

                                                                                    • Children predominantly rely on gifted sources of money
                                                                                      • Half of children aged 10-15 earn their own money
                                                                                        • Figure 33: Children’s source of income, March 2019
                                                                                      • Money management tools will appeal to older children
                                                                                        • Figure 34: Children’s source of income, by child’s age, March 2019
                                                                                    • Children’s Saving Activity

                                                                                      • Two fifths of child savers save all or most of their money
                                                                                        • Figure 35: Children’s saving activity, March 2019
                                                                                      • Children who are aware of their parents’ saving activity are more likely to save
                                                                                        • Figure 36: Children’s saving activity, by children’s knowledge of their parents saving activity, March 2019
                                                                                      • Earning money is vital in establishing a savings habit
                                                                                        • Figure 37: Children’s saving activity, by children’s source of income, March 2019
                                                                                    • Children’s Attitudes towards Money Management

                                                                                      • The majority of children feel in charge of their spending money
                                                                                        • Figure 38: Children’s attitudes towards money management, March 2019
                                                                                      • Children relying on gifted money are less likely to discuss finances with their parents
                                                                                        • Figure 39: Agreement with attitudes towards money management, by children’s source of income, March 2019
                                                                                    • Interest in Features to Help Children Save

                                                                                      • Household tasks can be used to help children meet their savings goals
                                                                                        • Figure 40: Children’s interest in features which help them save, March 2018
                                                                                      • Children of regular savers are more likely to be interested in tools that help them save
                                                                                        • Figure 41: Children’s interest in features which help them save, by parents’ saving activity, March 2018
                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                        • Abbreviations
                                                                                          • Consumer research methodology

                                                                                          Children's Attitudes towards Saving - UK - July 2019

                                                                                          £1,995.00 (Excl.Tax)