Table of Contents
Issues in the Market
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- Key issues
- Abbreviations
Market in Brief
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- More than five million CTF accounts
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- Figure 1: Ownership of children's savings/investment products, September 2010
- The scrapping of CTFs will have a significant impact…
- …as has the slowdown in child population growth
- A relatively diverse sector with a variety of providers
- Total sector adspend declined during the recession
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- Figure 2: Topline advertising expenditure on savings and investment products for children, 2007/08-2009/10*
- Online access is likely to become increasingly popular
- Over three fifths of parents save on behalf of their children
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- Figure 3: Amount saved on behalf of children, September 2010
- Cash-based CTFs are the most commonly held product
- Paying for university is the most popular reason for saving
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- Figure 4: Reasons for saving on behalf of children, September 2010
Future Opportunities
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- Children’s pensions as a replacement for the CTF?
- Offering goal-oriented products with additional benefits
Internal Market Environment
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- Key points
- Birth rates have fallen over the last 40 years
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- Figure 5: Total fertility rate in the UK, 1960-2009
- The scrapping of CTFs will have a major impact
- Children’s pensions could emerge as an alternative to the CTF
- The launch of Junior ISAs in 2011 may kick-start the market
- Changes in child benefit could impact the market
Broader Market Environment
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- Key points
- Low interest rates have discouraged savers…
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- Figure 6: Average monthly quoted deposit interest rates at banks and building societies and the BoE base rate, end of month, January 2000-September 2010
- …but the smart money is in equities at the moment
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- Figure 7: Monthly average value of the FTSE-100 index, January 2000-September 2010
- The recession has impacted people’s ability to save
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- Figure 8: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
- 11 million under-15s living in the UK
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- Figure 9: Trends in the age structure of the UK population, 2005-15
- …but the challenges facing young people today are greater than ever
- Fewer couples having children, but more challenges faced by offspring
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- Figure 10: Number of GB households, by family type, 1971-2007
- The cost of raising children has increased considerably…
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- Figure 11: Distribution of dependent children, by family type, Great Britain, 1972-2007
- …suggesting that starting early could be a good idea
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- Figure 12: Distribution of savings, by family status and value, 2008/09
Competitive Context
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- Key points
- Many parents save for their children in an ordinary savings account
- Pocket money and presents instead of a regular savings plan
- Paying off debt is a priority for many at present
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- Figure 13: Gross and net total consumer credit lending, seasonally adjusted, Q1 2007-Q2 2010*
SWOT Analysis
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- Figure 14: Saving and investing for children – SWOT analysis, 2010
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Who’s Innovating?
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- Key points
- Enhanced interest rates and freebies are common…
- …but accounts could be geared more towards education
- F&C Investments takes an innovative approach
- The introduction of Junior ISAs could spark further innovation
- Skipton BS takes a goal-based approach to saving
Market Size
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- Key points
- The number of CTF vouchers issued continues to grow
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- Figure 15: Number of CTF vouchers issued and accounts opened by parents, Q1 2005-Q2 2010
- The majority of accounts in existence are stakeholder schemes
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- Figure 16: CTF breakdown, by type of account and asset value, April 2009
- HMRC-opened accounts have lower additional contributions
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- Figure 17: CTF breakdown, by type of account and number/value of additional contributions, April 2009
- Well over half of parents have a non-CTF savings product
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- Figure 18: Ownership of children's savings/investment products, September 2010
Market Share
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- Key points
- HMRC-opened accounts help to even out CTF market share…
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- Figure 19: Number of organisations authorised to offer CTF accounts, 2008 and 2009
- …though two providers still dominate the market
- Leading players outside of the CTF market
Companies and Products
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- The Children’s Mutual
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- Figure 20: Tunbridge Wells Equitable Group – annual results, 2008 and 2009
- Figure 21: Tunbridge Wells Equitable Group – CTF statistics, 2008 and 2009
- Family Investments
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- Figure 22: Family Investments – annual results, 2008 and 2009
- Lloyds Banking Group
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- Figure 23: Lloyds Banking Group – annual results, 2008 and 2009
- Nationwide
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- Figure 24: Nationwide Group – annual results, 2009 and 2010
- NS&I (National Savings & Investments)
- Santander
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- Figure 25: Santander UK – annual results, 2008 and 2009
Brand Communication and Promotion
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- Key points
- Total sector adspend has almost halved since 2007/08
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- Figure 26: Topline advertising expenditure on savings and investment products for children, 2007/08-2009/10*
- A diverse range of providers operate in the market
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- Figure 27: Advertising expenditure on savings and investment products for children, by advertiser (top ten), 2007/08-2009/10*
- Companies tend to use a more targeted approach
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- Figure 28: Advertising expenditure on savings and investment products for children, by media type, 2007/08-2009/10*
- Government spending on CTF advertising declines
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- Figure 29: Total amount spent by the government on advertising the CTF, by media type, 2004/05-2008/09*^
Channels to Market
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- Key points
- Children’s savings products need an online boost
- Partnerships were common in the CTF market
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- Figure 30: List of CTF distributors, by the provider whom they are tied to, November 2010
Amount Saved on Behalf of Children
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- Key points
- Around three fifths of parents save for their children
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- Figure 31: Amount saved on behalf of children, September 2010
- Affluent families are the primary – but not the only – target
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- Figure 32: Amount saved on behalf of children, by demographics, September 2010
Product Ownership
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- Key points
- Possible confusion over investment types in the CTF sector
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- Figure 33: Ownership of children's savings/investment products, September 2010
- The non-CTF market is about the same size again
- High earners are more likely to have a shares-based CTF
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- Figure 34: Ownership of children's savings/investment products, by demographics, September 2010
- Homebuyers more likely to turn to equity investments
- Further evidence that affluent families are more engaged
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- Figure 35: Number of different types of children's savings/investment products owned, by socio-economic group and gross annual household income, September 2010
- The non-CTF sector – secondary saving, but high value?
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- Figure 36: Ownership of children's savings/investment products, by number of different types of children's savings/investment products owned, September 2010
- The CTF scheme has encouraged people to get into regular saving
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- Figure 37: Ownership of children's savings/investment products, by amount saved on behalf of children, September 2010
Reasons for Saving on Behalf of Children
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- Key points
- Rising university fees could encourage more parents to save
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- Figure 38: Reasons for saving on behalf of children, September 2010
- Launching accounts designed specifically for house purchase…
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- Figure 39: Reasons for saving on behalf of children, by demographics, September 2010
- …or indeed, to help finance university
- High-value savers have very specific reasons for doing so
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- Figure 40: Reasons for saving on behalf of children, by most popular amount saved on behalf of children, September 2010
- CTF owners are more motivated by house purchase
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- Figure 41: Reasons for saving on behalf of children, by ownership of children's savings/investment products, September 2010
Attitudes Towards the CTF Changes
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- Key points
- The CTF scheme has been largely successful…
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- Figure 42: Attitudes towards the CTF changes, September 2010
- …although this is largely due to government contributions
- Women may be the decision-makers in this sector
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- Figure 43: Attitudes towards the CTF changes, by demographics, September 2010
- Evidence of cross-selling opportunities for high earners
- Offering incentives to regular savers
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- Figure 44: Attitudes towards the CTF changes, by amount saved on behalf of children, September 2010
- Attracting more enthusiastic savers in a different way
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- Figure 45: Attitudes towards the CTF changes, by ownership of children's savings/investment products, September 2010
Appendix – Amount Saved on Behalf of Children
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- Figure 46: Amount saved on behalf of children, by demographics, September 2010
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Appendix – Product Ownership
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- Figure 47: Ownership of children's savings/investment products, by demographics, September 2010 (Table 1 of 3)
- Figure 48: Ownership of children’s savings/investment products, by demographics, September 2010 (Table 2 of 3)
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- Figure 49: Ownership of children's savings/investment products, by demographics, September 2010 (Table 3 of 3)
- Figure 50: Ownership of children's savings/investment products, by most popular ownership of children's savings/investment products, September 2010
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Appendix – Reasons for Saving on Behalf of Children
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- Figure 51: Reasons for saving on behalf of children, by demographics, September 2010
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Appendix – Attitudes Towards the CTF Changes
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- Figure 52: Attitudes towards the CTF changes, by demographics, September 2010 (Table 1 of 2)
- Figure 53: Attitudes towards the CTF changes, by demographics, September 2010 (Table 2 of 2)
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