UK Children's Attitudes towards Saving Market Report
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Providing the most comprehensive and up-to-date information and analysis of the Children's Attitudes towards Saving market, and the behaviours, preferences and habits of the consumer.
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What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?
Products 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 been entering 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.
Children’s savings accounts also include long-term tax-free savings accounts for children, usually with a variable rate of interest. Junior cash ISAs (Individual Savings Accounts) were launched in 2011 to replace cash CTFs (Child Trust Funds). The latter are no longer on sale but existing ones can have money deposited into them up to the same annual limit as Junior cash ISAs (£4,260 in 2018/19, although for CTFs it runs from the child’s birthday as opposed to the tax year). In both cases, the money legally belongs to the child, who can take control of their CTF or Junior ISA when they reach 16, but funds can only be withdrawn when they turn 18. Since 2015, a CTF can be transferred into a Junior ISA, but a child cannot hold both.
In addition to cash savings products, there are various long-term investment products for children including Junior stocks and shares ISAs. Unlike adult ISAs, a child can only hold one cash Junior ISA and one Junior stocks and shares ISA at any one time. However, it is possible to invest flexibly in both, up to the maximum allowance for the given tax year (distributed over both types of ISAs).
Friendly societies, sometimes in partnership with asset managers and specialised companies, are typically the main providers of Children’s Savings Plans. These are investment products which tend to be long term. Friendly societies’ legal status allows them to offer additional tax-efficient saving opportunities, not available to some other companies such as banks. The ease to open and manage products remotely has increased friendly societies’ reach, which is no longer limited to local communities, although some still may have preferential offers to existing members.
Also included are NS&I’s (National Savings & Investments) Children’s Bonds. This product is being phased out and from April 2018 is no longer on sale or available for renewal on maturity. Like other children’s bonds, it offered a fixed interest rate for a set term (five years) on amounts from £25-£3,000. However, unlike children’s bonds offered by banks and building societies, the NS&I account is exempt from tax for both the child and parent.
What you need to know
Parents naturally have their children’s best interests at heart, but saving and investing on their behalf can be challenging. Deciding when and how much to save, without compromising presentday spending and leaving room for urgent purchases, requires time and effort and can be hard, especially when combined with everyday finances and managing a young household.
A decade of low interest rates and consequent poor returns has negatively affected parents’ incentives to save. Similarly, providers have been less motivated to invest in development, awareness and promotion of their children’s savings products. However, with the end of government remedies to stimulate investment, and with the prospect of further interest rate rises in the horizon, the savings market should be set for growth in the coming years.
This Report reviews the market for children’s savings and investments, looking closely at the different products on offer and their recent performance. The Report analyses the drivers behind the market and the competitive strategies of major providers and challengers. Mintel’s original consumer research gets to the heart of who saves for children, how often they save and what products and types of providers are preferred. Furthermore, we have for the first time approached children themselves and asked them directly how they learn about money and engage with saving, including activities done on their own or with parents, and what they are interested in saving for.
Expert analysis from a specialist in the field
Written by Irene Salazar, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
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.
Financial Services Analyst
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This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.
Mintel's proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.
Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.
Market reports provide appendices of data to support the research and insight produced. Our tables of data are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.
* This is a sample representation of the report layout and does not reflect the research included in this report.
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