Table of Contents
Introduction and Abbreviations
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- Survey coverage
- Other reports of relevance
- Key Sources
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Executive Summary
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- Background
- The changing family environment
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- Figure 1: Presence of children, living at home or elsewhere, May 2006
- Financial responsibilities
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- Figure 2: Person responsible for ensuring household bills are paid and making financial decisions, May 2006
- Preferred sources of financial information and advice
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- Figure 3: Sources most used for financial information and advice, May 2006
- The influence of parents...
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- Figure 4: Financial assistance/guidance given by parents, May 2006
- ...is acknowledged by half of all adults aged 16-54
- Parents’ perspective
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- Figure 5: Ways in which parents/guardians provide financial assistance/guidance to their children, May 2006
- Inheritance intentions
- Generational differences
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- Figure 6: Agreement with statements about personal finance and managing money, by age group, May 2006
- In conclusion
Financial Context
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- From little acorns
- The financial lifecycle
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- Figure 7: Financial needs and key activities at various lifestages
- Shifting dynamics
- Rising household debt: a sign of the times
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- Figure 8: Amount of household debt outstanding, secured and unsecured, 1993-2006
- Balancing the need to borrow with the need to save
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- Figure 9: Population segmentation, according to possession of debts and savings, by gender, age and socio-economic group, October 2005
- Student debt
- Children’s attitudes towards money
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- Figure 10: Attitudes towards money, spending and saving – 11-14-year-olds, 2006
- The majority of 15-19-year-olds dislike the idea of being in debt
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- Figure 11: Attitudes towards money, spending, saving and debt – 15-19-year-olds, 2006
Household Structure
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- Demographic trends
- A variety of family structures
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- Figure 12: GB households and family types, 1971-2005 (at intervals)
- The growth of lone-parent families...
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- Figure 13: Percentage of all children in GB living in different family types, 1972-2005 (at intervals)
- ...and its implications for building a savings ethic in the young
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- Figure 14: Distribution of household savings, by family strucure and amount, 2003/04
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- Figure 15: Frequency of saving for children, by marital status, July 2005
- An increasing proportion of grown-up children are returning to the family nest
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- Figure 16: Presence of children living at home or elsewhere, by gender, May 2006
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- Figure 17: Presence of children living at home or elsewhere, by marital status, May 2006
- Young women leave their parental home earlier than men
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- Figure 18: Proportion of adults living with their parents, by gender and age group (England), 1991-2005
Financial Responsibility
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- Identifying the Household Accountants and Financial Decision-makers
- Just one person in a household tends to be responsible for ensuring bills are paid
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- Figure 19: Person responsible for paying household bills/other expenses and making financial decisions, May 2006
- Financial Decision-makers and Household Accountants are not necessarily one and the same
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- Figure 20: Cross-analysis – responsibility for making financial decisions, by responsibility for paying household bills/other expenses, May 2006
- Women are more likely to manage household expenses
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- Figure 21: Person responsible for paying household bills/other expenses and making financial decisions, by gender, May 2006
- In the majority of couple households, one person takes charge of household finances
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- Figure 22: Person responsible for paying household bills/other expenses and making financial decisions – married versus cohabiting couples, May 2006
- Cohabiting men are more likely than married men to leave the bill paying to their partners
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- Figure 23: Person responsible for paying household bills/other expenses and making financial decisions, by combined gender and marital status, May 2006
- ABs are most likely to share financial responsibilities in the home
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- Figure 24: Person responsible for ensuring household bills/other expenses are paid, by gender, age, socio-economic group, household status and working status, May 2006
- Young working couples also tend to share the burden
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- Figure 25: Person responsible for ensuring household bills/other expenses are paid, by detailed lifestage, May 2006
- The tendency to share responsibilities increases with household income
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- Figure 26: Person responsible for ensuring household bills/other expenses are paid, by region, household income, tenure and ACORN category, May 2006
- Financial independence improves with age
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- Figure 27: Person responsible for making financial decisions, by gender, age, socio-economic group, household status and working status, May 2006
- Strong variances by lifestage
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- Figure 28: Person responsible for making financial decisions, by detailed lifestage, May 2006
- Slight regional differences
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- Figure 29: Person responsible for making financial decisions, by region, household income, tenure and ACORN category, May 2006
- Female heads of household have lower product holdings than their male counterparts
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- Figure 30: Ownership of financial products, by household status, May 2006
- Those who share financial responsibilities have the greatest product holdings...
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- Figure 31: Ownership of financial products, by person responsible for paying household bills/other expenses, May 2006
- ...and therefore are the most financially active
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- Figure 32: Ownership of financial products, by person responsible for making financial decisions, May 2006
Financial Mentors
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- Learning from experience
- Improving financial capability
- The importance of parents
- Sources of information and advice
- The power of personal recommendation
- Parents versus professionals
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- Figure 33: Sources most used for financial information and advice, May 2006
- Over half of 16-24-year-olds would go to their parents for advice...
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- Figure 34: Top five sources of financial information/advice, by gender and age group, May 2006
- ...while ABs strongly favour IFAs
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- Figure 35: Top five sources of financial information/advice, by socio-economic group, May 2006
- Main target groups for top four sources
- Bank/building society managers/advisers
- Independent advisers
- Parents
- Internet
- Pre-retirement age group most likely to need and seek out expert advice
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- Figure 36: Main source categories used for financial information and advice, by gender, age, socio-economic group and household status, May 2006
- Those who share responsibilities are keenest to draw on the services of a financial expert
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- Figure 37: Sources most used for financial information and advice, by person responsible for ensuring bills/other expenses are paid, May 2006
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- Figure 38: Sources most used for financial information and advice, by person responsible for making financial decisions, May 2006
Parental Influences
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- Assessing parental influences on financial behaviour
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- Figure 39: Financial assistance/guidance given by parents, May 2006
- Young adults receive much financial help and guidance from parents
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- Figure 40: Type of financial assistance/guidance received from parents, by gender, age, socio-economic group, lifestage and age left full-time education, May 2006
- Nearly half of all ABs received financial support from parents while at university
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- Figure 41: Top seven types of financial assistance/guidance received from parents, by socio-economic group, May 2006
- Repertoire analysis reveals the extent of parental help
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- Figure 42: Number of types of financial assistance/guidance received from parents, May 2006
- Parents can lay the foundations...
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- Figure 43: Number of financial products owned, by number of types of financial help received from parents, May 2006
- ...of financial stability for their children
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- Figure 44: Number of types of financial help received from parents, by gender, age, socio-economic group, lifestage, age finished full-time education, household income, tenure and ACORN category May 2006
- One in two adults aged 16-54 say their parents influenced their attitude towards money
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- Figure 45: Agreement with statements about parents and personal finance, May 2006
- The parental influence is predominantly positive
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- Figure 46: Cross-analysis of agreement with statements about parents and personal finance, May 2006
- Correlation analysis
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- Figure 47: Correlation analysis – agreement with statements about parents and personal finance. May 2006
- Strong evidence to suggest parents sway offspring’s selection of products and providers
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- Figure 48: Agreement with statements about parents and personal finance, by type of financial assistance/guidance received from parents, May 2006
- Definite link between parental influence and help received
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- Figure 49: Agreement with statements about parents and personal finance, by number of types of help received from parents, May 2006
- Those with a wide product repertoire are most likely to say they expect to get an inheritance
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- Figure 50: Agreement with statements about parents and personal finance, by number of financial products owned, May 2006
- ABs are most likely to have been influenced by parents
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- Figure 51: Top five statements about parents and financial matters, by gender, age, socio-eoncomic group, lifestage and region, May 2006
Parent Attitudes and Behaviour
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- Encouraging children to save is the most popular way of helping them financially, according to parents
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- Figure 52: Ways in which parents/guardians provide financial assistance/guidance to their children, May 2006
- Nearly half of all parents give money-management advice to grown-up children still living at home
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- Figure 53: Ways in which parents/guardians provide financial assistance/guidance to their children, by age and location of child, May 2006
- Parents’ view versus child’s view
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- Figure 55: Comparing parents’ and offspring’s viewpoints on the financial help given, May 2006
- Financial needs change with age
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- Figure 56: Types of financial assistance/guidance given to children, by gender, age, socio-economic group and lifestage, May 2006
- Affluent parents can more easily afford to help their children
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- Figure 57: Types of financial assistance/guidance given to children, by marital status, household income, tenure and region, May 2006
- Half of parents who save for children also support them at university
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- Figure 58: Cross-analysis of type of financial assistance/guidance given to children, May 2006
- Parents provide financial support in multiple ways
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- Figure 59: Number of types of financial assistance/guidance given to children, May 2006
- Around half of parents want to bequeath their home to their children...
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- Figure 60: Agreement with statements relating to inheritance and other related matters, May 2006
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- Figure 61: Agreement with statements relating to inheritance and other related matters, by age and location of child, May 2006
- ...and this desire increases with the amount of help already given
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- Figure 62: Agreement with statements relating to inheritance and other related matters, by number of types of financial assistance/guidance given to children, May 2006
- Young parents are most eager to bequeath an inheritance
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- Figure 63: Top six statements about children, inheritance and other related matters, by gender, age, socio-economic group and lifestage, May 2006
- Half of those in the highest income band would rather help their children now or when they need it most
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- Figure 64: Top six statements about children, inheritance and other related matters, by marital status, household income, tenure and region, May 2006
Generation Gap
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- Only three in five adults say they are good at managing their money
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- Figure 65: Agreement with statements about personal finance and managing money, May 2006
- Young and impulsive
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- Figure 66: Agreement with statements about personal finance and managing money, by gender and lifestage, May 2006
- Older and wiser
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- Figure 67: Agreement with statements about personal finance and managing money, by age group, May 2006
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- Figure 68: Agreement with top six statements about personal finance and managing money, by age group, May 2006
- ABs are more financially confident and capable than other socio-economic groups
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- Figure 69: Agreement with statements about personal finance and managing money, by socio-economic group, May 2006
- Analysis summary
- Parents can help their offspring become financially competent
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- Figure 70: Agreement with statements about personal finance and managing money, by types of financial help received from parents, May 2006
- The more help parents give, the better able their children will be to manage their finances
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- Figure 71: Agreement with statements about personal finance and managing money, by number of types of help received from parents, May 2006
- Cluster analysis
- What is cluster analysis?
- Money-management clusters
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- Figure 72: Money-management clusters, May 2006
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- Figure 73: Composition of money-management clusters, May 2006
- A quarter of those in the Foolhardy cluster have a personal loan
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- Figure 74: Financial products owned, by money-management clusters, May 2006
- The Financially Competent have the widest repertoire of products
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- Figure 75: Number of financial products owned, by money-management clusters, May 2006
- The propensity to have control over household finances is lowest among the Foolhardy and the Financially Naïve…
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- Figure 76: Person responsible for ensuring bills are paid, by money-management clusters, May 2006
- ...mainly because these clusters have a younger age profile
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- Figure 77: Profile of money-management clusters, by gender, age, socio-economic group and household status, May 2006
- Marriage improves a person’s financial capability...
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- Figure 78: Profile of money-management clusters, by marital status, lifestage, working status and age left full-time education, May 2006
- ...as does owning a home
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- Figure 79: Profile of money-management clusters, by tenure, household income, region and ACORN category, May 2006
- Broadsheet readers are the most Financially Competent
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- Figure 80: Profile of money-management clusters, by new technology usage, newspaper readership and supermarket usage, May 2006
- Developing a savings ethic in the young lays the foundation of financial competency...
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- Figure 81: Types of financial help received from parents, by money-management clusters, May 2006
- ...hence, parents’ influence is key to creating a financially adept consumer base
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- Figure 82: Agreement with statements about parents and personal finance, by money-management clusters, May 2006
The Future
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- The female influence on the financial services industry is stronger than it seems
- Implications for the financial services sector
- Family and friends are hugely influential
- Implications for the financial services sector
- Sizeable target audience for IHT planning
- Implications for the financial services sector
- Pushing pensions via parents
- Implications for the financial services sector
- Encouraging children to get into the savings habit improves their chances of success
- Implications for the financial services sector
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