Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Children’s savings accounts and CTFs are the most widely owned products
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- Figure 1: Preferred products for children’s savings, December 2012
- Market factors
- Low interest rates are hampering returns, especially when accounting for inflation
- Parents should consider equities for long-term savings goals
- Children are getting significantly less pocket money than pre-2008
- Companies, brands and innovation
- Lloyds Banking Group is most likely the lead provider of children’s savings accounts
- Brand promotion
- Who’s innovating?
- The consumer
- Saving on behalf of children
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- Figure 2: Saving on behalf of children, December 2012
- Motivations for saving on behalf of children
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- Figure 3: Savings motivations, December 2012
- Influential factors for product uptake
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- Figure 4: Important factors when choosing a savings product, December 2012
- Parental attitudes towards children’s savings
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- Figure 5: Parents’ attitudes towards children’s savings, December 2012
- What we think
Issues in the Market
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- Have low interest rates made parents more interested in less traditional products?
- How is the Junior ISA market performing a year after launch?
- What do parents look for when taking out children’s savings products?
- What lies ahead for the Child Trust Fund sector?
Trend Application
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- A family day centred around the importance of saving
- Happy Birthday, here is your present from us
- Mintel futures: Old Gold
Market Drivers
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- Key points
- Junior ISAs fail to invigorate the children’s savings market
- Low interest rate environment is hurting savings returns
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- Figure 6: UK inter-bank, three-month rate+ and selected UK bank rates*, January 2002-November 2012
- Equity-based investments can be a good long-term strategy
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- Figure 7: Performance of the FTSE-100 index, January 2007-December 2012
- UK savings ratio below 2009 levels, but is on the up
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- Figure 8: UK savings ratio, 2005-12
- Growing childbirth rates present opportunities for providers
- Average pocket money has still not recovered to pre-recession levels
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- Figure 10: Trends in average weekly pocket money received by 8-15 year-olds, 2003-12
- Difference in how boys and girls spend pocket money
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- Figure 11: How children spend their pocket money, boys vs girls, April 2012
SWOT Analysis
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- Figure 12: Children’s saving and investing market – SWOT analysis, 2013
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Who’s Innovating?
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- Key points
- Halifax ties in adult and Junior ISAs for a booster rate
- Comeback of the NatWest piggy bank
- Roosterbank takes the piggy bank online
- Saving for children and helping charitable causes
- Nationwide supports The Snowman sequel
- PKTMNY launches prepaid debit card for children
Market Size
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- Key points
- Children’s savings accounts and CTFs are the most widely owned products
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- Figure 13: Preferred products for children’s savings, December 2012
- Junior ISAs still have potential, but require support and potential tweaks
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- Figure 14: Number of Junior ISAs, amounts subscribed and average subscription, 2011*/12
- CTFs peak at around 6.3 million opened accounts
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- Figure 15: Total number of CTF vouchers and total number of accounts opened, January 2005-June 2011
Market Share
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- Key points
- Junior ISA market open for a dominant player
- Lloyds Banking Group is the number one in the adult savings market
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- Figure 16: Ranking of largest providers of savings accounts, by product sector, February 2012
Companies and Products
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- Barclays
- Family Investments
- HSBC
- Lloyds Banking Group
- Nationwide
- NS&I (National Savings and Investments)
- RBS
- Santander
- The Children’s Mutual
Brand Communication and Promotion
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- Key points
- Adspend on children’s savings and investment products down by 37%
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- Figure 17: Topline advertising expenditure on children’s savings and investment products, 2010-12
- Top three advertisers account for around two thirds of adspend
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- Figure 18: Advertising expenditure on savings and investment product for children, by advertiser, 2010-12
- Press campaigns continue to dominate adspend
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- Figure 19: Advertising expenditure on children’s savings and investment products, by media type, 2010-12
- Junior ISA advertising actually shrank in first full year of availability
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- Figure 20: Topline advertising expenditure on Junior ISAs, 2011-12
- A note on adspend
Channels to Market
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- Key points
- The majority of children’s products are available exclusively in-branch
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- Figure 21: Select product availability, by distribution, February 2013
- Adult savings accounts are mostly accessed online
Saving on Behalf of Children
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- Key points
- Over half of parents save for their children
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- Figure 22: Saving on behalf of children, December 2012
- Parental desire to save is not always enough
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- Figure 23: Saving on behalf of children, by demographics, December 2012
- Rental obligations can have a detrimental effect on saving ability
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- Figure 24: Parents saving on behalf of their children, by accommodation status, December 2012
- Potential for M&S Bank to develop children’s savings products
Children’s Savings Products
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- Key points
- Children’s savings accounts and CTFs are the most widely owned products
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- Figure 25: Preferred products for children’s savings, December 2012
- Junior ISA uptake has been slow, but there are some encouraging signs
- Very few products are used by parent savers
- Older parents less likely to contribute to CTFs
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- Figure 26: Preferred products for children’s savings, by age, December 2012
- Affluence dictates product ownership
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- Figure 27: Preferred products for children’s savings, by age, December 2012
Motivations for Saving on Behalf of Children
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- Key points
- University/education costs are the most important reasons for saving
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- Figure 28: Savings motivations, December 2012
- General savings and child encouragement also popular among parents
- Product suitability can depend on savings motivations
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- Figure 29: Savings motivations, by preferred products for children’s savings, December 2012
Influential Factors for Product Uptake
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- Key points
- Parental control is most important for product choice
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- Figure 30: Important factors when choosing a savings product, December 2012
- Interest rates and provider familiarity are also important to parent savers
- Ethical practices, internet access and other services appeal to a minority
- Higher-income families more likely to want control and better returns
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- Figure 31: Important factors when choosing a savings product, by household income, December 2012
- Parents looking for control slightly more likely to venture outside of CTFs
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- Figure 32: Preferred products for children’s savings, by important factors when choosing a savings product, December 2012
Parental Attitudes Towards Children’s Savings
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- Key points
- Teaching and encouraging children to save is important to a larger number of parents
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- Figure 33: Parents’ attitudes towards children’s savings, December 2012
- A large number of parents save irregularly, while some are simply struggling
- Junior ISA awareness and interest in alternative products are low
- Birthday/pocket money contributions more likely to be invested outside of CTFs
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- Figure 34: Preferred products for children’s savings, by parents’ attitudes towards children’s savings, December 2012
- Figure 35: Parents who encourage children to save birthday/pocket money, by savings motivations, December 2012
Appendix – Saving on Behalf of Children
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- Figure 36: Saving on behalf of children, by demographics, December 2012
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Appendix – Children’s Savings Products
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- Figure 37: Preferred products for children’s savings, December 2012
- Figure 38: Less popular children’s savings products, December 2012
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Appendix – Motivations for Saving on Behalf of Children
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- Figure 39: Savings motivations, December 2012
- Figure 40: Less important savings motivations, December 2012
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Appendix – Influential Factors for Product Uptake
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- Figure 41: Important factors when choosing a savings product, December 2012
- Figure 42: Less important factors when choosing a savings product, December 2012
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Appendix – Parental Attitudes Towards Children’s Savings
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- Figure 43: Parents’ attitudes towards children’s savings, December 2012
- Figure 44: Parents’ attitudes towards children’s savings continued, December 2012
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