2021
9
UK Saving and Investing for Children Market Report 2021
2021-07-01T04:09:52+01:00
OX1046019
2195
139913
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Report
en_GB
“Many households are emerging from lockdown with more money stored up and a renewed appreciation of the importance of saving to provide certainty and stability. With the uncertainty of the…

UK Saving and Investing for Children Market Report 2021

£ 2,195 (Excl.Tax)

Description

Providing the most comprehensive and up-to-date information and analysis of the UK Saving and Investing For Children market, including the behaviours, preferences and habits of the consumer.

The saving for children market has seen a boost during the pandemic. 72% of parents saying the COVID-19 pandemic has made them more aware of the need to save for their children, while 24% of parents say they are saving to create an emergency fund for their children.

Increased saving activity since the start of the pandemic saw the value of household deposits increase by 11% in 2020. While most of this has ended up in current accounts or instant access saving accounts, some has also gone into children’s savings and investments. The investing for children market is expected to rise, with 30% of parents saying the amount of money saved for their children has increased, compared to 11% for whom it has decreased.

As government support for the economy winds down, unemployment looks set to rise. This will make parents more cautious about putting money aside for their children. Additionally, ongoing low-interest rates make it difficult to persuade parents of the benefits of cash savings products, with a growing number turning to investment products to maximise returns.

There is an opportunity to reach out to parents who have maintained their income during the pandemic and, thanks to falling outgoings, have experienced a rise in deposits. Some will have money left over for the first time, and as restrictions ease, there is an opportunity to encourage them to think about how that money will be used. With the pandemic fresh on people’s minds, encouraging them to think about creating a financial cushion to protect their children against future crises or uncertainties could prove compelling.

Read on to discover more details or take a look at all of our UK Financial Services market research.

Quickly understand

  • The impact of COVID-19 on children’s savings and investments.
  • An overview of the key savings products used and how the market is evolving.
  • Competitive strategies and new product launches.
  • Who is saving for children, how they contribute to savings and what products they use.
  • Important factors in choosing a child savings or investment product.
  • Plans for what savings or investments will be used for and how this differs by products held.

Covered in this report

Brands: Schroeders Personal Wealth, The Big Exchanges, gohenry, TSB, Beanstalk, HyperJar, Starling.

Expert analysis from a specialist in the field

Written by Thomas Slide, a leading analyst in the Food & Drink sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Many households are emerging from lockdown with more money stored up and a renewed appreciation of the importance of saving to provide certainty and stability. With the uncertainty of the pandemic still fresh in their minds and additional deposits waiting to be spent in bank accounts, there is a window of opportunity to encourage parents to put some of this money aside to enhance and protect their children’s future.
Thomas Slide
Associate Director – Financial Services

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • COVID-19 focuses minds on protecting children
      • Figure 1: Short, medium and long-term impact of COVID-19 on saving and investing for children, May 2021
    • The market
    • Child savings and investments worth almost £40 billion
    • CTFs start maturing, but JISAs have struggled to keep up
      • Figure 2: Number of CTFs, by year they reach maturity, 2020/21-2028/29
    • The number of households with dependent children continues to rise
      • Figure 3: Annual births and average age of mother at childbirth, 2000-19
    • Companies and brands
    • A turbulent year for NS&I
    • Ethical saving for children
    • The consumer
    • COVID-19 has focused minds on saving
    • 90% have money set aside for their children
      • Figure 4: Who is saving for children, April 2021
    • JISAs are more popular with affluent households than the CTF
      • Figure 5: Child savings products held, April 2021
    • Most parents start with an ad-hoc approach to saving
      • Figure 6: How money is saved for children, April 2021
    • Almost a third increased the amount saved during the pandemic
      • Figure 7: Changes to saving behaviour, April 2021
    • Half of children’s savings funds are worth less than £3,000
      • Figure 8: Total amount saved/invested for children, April 2021
    • Lower barriers to entry to encourage new parents to save
      • Figure 9: Important factors in choosing a children’s saving/investing product, April 2021
    • Saving to create stability and certainty
      • Figure 10: Planned use of savings, April 2021
    • COVID-19 has prompted low-income households to save
      • Figure 11: Behaviours related to child savings, April 2021
  3. Issues and Insights

    • COVID-19 has focused minds on saving for children
    • Lower barriers to entry and offer flexibility to encourage uptake
    • Combine digital and physical to engage and educate children
  4. The Market – Key Takeaways

    • Child savings and investments worth almost £40 billion
    • CTFs begin to mature as JISAs grow steadily
    • Household savings grow sharply during lockdown
    • Falling fertility, older mothers and more dual-parent households
  5. Market Size

    • COVID-19 focuses minds on protecting children
      • Figure 12: Short, medium and long-term impact of COVID-19 on saving and investing for children, May 2021
    • Child savings and investments worth almost £40 billion
    • COVID-19 encourages more saving
  6. Key savings products

    • Child Trust Funds start to reach maturity
      • Figure 13: Number of CTFs, by year they reach maturity, 2020/21-2028/29
    • JISA numbers continue to rise slowly
      • Figure 14: Number of JISA accounts subscribed by year, 2012/13-2018/19
    • Value shift to stocks and shares JISAs
      • Figure 15: Value of JISA accounts subscribed by year, 2012/13-2018/19
    • NS&I child savings fall following closure of bonds
      • Figure 16: Children’s savings with NS&I, 2018/19-2019/20
  7. Market Drivers

    • Number of households with children continues to grow
      • Figure 17: Total households with dependent children, 2011-20
    • More children are living in two-parent households
      • Figure 18: Proportion of households with dependent children present, by family type, 2011-20
    • Live births continue to fall
      • Figure 19: Annual births and average age of mother at childbirth, 2000-19
    • Interest rates fall further in 2020
      • Figure 20: Interest rates, January 2017-April 2021
    • Household savings grow 11% in 2020
      • Figure 21: Household deposit balances (non-seasonally adjusted), at current and constant prices, 2015-20
    • Confidence recovers as the economy reopens
      • Figure 22: Financial confidence, weighted average of responses, January 2020-May 2021
  8. Companies and Brands – Key Takeaways

    • A turbulent year for NS&I
    • Ethical saving for children
  9. Competitive Strategies and Launch Activity

    • A turbulent year for NS&I
    • Advice and support
    • Schroeders Personal Wealth launches JISA
    • Ethics and sustainability
    • The Big Exchanges launches sustainable JISA
    • gohenry launches biodegradable card
    • Digital link-ups to enhance access to JISAs
    • TSB partners with Wealthify to offer investment JISAs
    • Beanstalk JISA makes investing a family affair
    • New digital money management tools for kids and teens
    • HyperJar launches Pocket Money management app
    • Starling introduces a kids account
    • gohenry launches teen account
  10. The Consumer – Key Takeaways

    • COVID-19 has focused minds on saving
    • 90% have money set aside for their children
    • JISAs are more popular with affluent households than the CTF
    • Most parents start with an ad-hoc approach to saving
    • Half of children’s savings funds are worth less than £3,000
    • Lower barriers to entry to encourage new parents to save
    • Saving to create stability and certainty
  11. Impact of COVID-19 on Consumer Behaviour

    • Growth in savings activity
      • Figure 23: Monthly amounts outstanding of monetary financial institutions’ sterling deposits from households, not seasonally adjusted, January 2017-March 2021
    • Increased focus on saving after the pandemic
      • Figure 24: Plan to save, by parental status, April 2021
    • Rising unemployment could hit savings plans
      • Figure 25: Historic and forecasted quarterly unemployment rate, Q1 2017-Q4 2025
  12. Who is Saving for Children?

    • 90% have money saved for their children
    • Saving for children is a family affair
      • Figure 26: Who is saving for children, April 2021
    • Saving peaks on behalf of young teenagers
      • Figure 27: Anyone saving for children, by age of children in the household, April 2021
  13. Ownership of Child Savings Products

    • CTFs remain the most widely held product
    • Changes encourage uptake of premium bonds
      • Figure 28: Child savings products held, April 2021
    • Junior ISAs skew towards higher-income households
      • Figure 29: Child savings products, by household income, April 2021
  14. How Money is Saved for Children

    • Most take an ad-hoc approach to saving
      • Figure 30: How money is saved for children, April 2021
    • Saving becomes more structured as children get older
      • Figure 31: How money is saved for children, by age of children in the household, April 2021
    • Investors take a more structured approach to contributions
      • Figure 32: How money is saved for children, by savings products held, April 2021
  15. Changes to Saving Behaviour

    • Almost a third increase the amount saved during the pandemic
      • Figure 33: Changes to saving behaviour, April 2021
    • Investment products are the biggest beneficiaries of increased funding
      • Figure 34: Changes to saving behaviour, by child saving/investment product(s) held, April 2021
  16. Amount Saved for Children

    • Half of children’s savings funds are worth less than £3,000
      • Figure 35: Total amount saved/invested for children, April 2021
    • Investors have put away the most for their kids
      • Figure 36: Total amount saved/invested for children, by age of child in the household, April 2021
  17. Important Factors in Choosing a Child’s Saving Product

    • Online functionality is key
      • Figure 37: Important factors in choosing a child’s saving/investing product, April 2021
    • Lower the minimum saving amount to appeal to parents of young children
    • As children grow, ensure they can engage with their finances
      • Figure 38: Important factors in choosing a child’s saving/investing product, by age of children, April 2021
  18. Planned Use of Savings

    • A desire to help children onto the housing ladder
    • Creating an emergency fund for children
      • Figure 39: Planned use of savings, April 2021
    • Holders of Junior ISAs and Investment products have a clearer goal
      • Figure 40: Planned use of savings, by savings product held, April 2021
  19. Child Savings Behaviours

    • Most people think they are teaching children good money habits
    • COVID-19 has prompted low-income households to save
      • Figure 41: Behaviours related to child savings, April 2021
    • Losing confidence in children as they age
    • Over half with children under 12 opened an account in the last year
    • Targeting parents of teenagers with additional support
      • Figure 42: Behaviours related to child savings, April 2021
  20. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

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