Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Two thirds of parents save for their children
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- Figure 1: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
- Junior ISAs continue to show strong growth
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- Figure 2: Amounts subscribed to Junior ISAs, £m, 2014/15-2015/16
- Low interest rates have left the market feeling uncompetitive
- Parents are less likely to describe their finances are healthy
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- Figure 3: Current financial situation – Parents versus non-parents, February 2016
- Companies and brands
- Stock and Shares Junior ISAs offer competitive potential
- Savings adspend suffers while investment spend swells
- The consumer
- Two thirds of parents save for their children
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- Figure 4: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
- Child Trust Fund legacy continues despite freedom to swap
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- Figure 5: Products used for children's savings, February 2017
- Online management can help deliver sought-after parental controls
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- Figure 6: Interest in features of a new children's savings product, February 2017
- Parents seek rewards for saving regularly
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- Figure 7: Interest in incentives of a new children's savings product, February 2017
- Parents expect their money to be used wisely
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- Figure 8: Attitudes towards saving for children, February 2017
- What we think
Issues and Insights
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- Providers should cede flexibility as parents seek supreme control
- The facts
- The implications
- Dual parent and child benefits could attract Millennials
- The facts
- The implications
The Market – What You Need to Know
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- An estimated 10.7 million parents are currently saving for children
- Junior ISAs grow at the expense of Children’s Bonds
- Proportion of households with dependent children is falling
- The child population is growing but interest rates are low
Market Size
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- Almost two thirds of parents are saving for their children
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- Figure 9: Proportion of parents who are saving for their children, February 2017
- Child Trust Funds dominate product ownership
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- Figure 10: Proportion of parents who own various saving and investment products for the purposes of saving for children, February 2017
- A note about Mintel’s estimates
Market Segmentation
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- Junior ISAs continue to show strong growth
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- Figure 11: Number of Junior ISAs, amounts subscribed and average subscription, 2011/12-2015/16
- NS&I Children’s Bonds to lose more favour following rate cut
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- Figure 12: NS&I Transactions with investors in children’s bonds, 2015-16*
The Family Environment
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- The proportion of families with children is stable
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- Figure 13: UK households and family types, 1996, 2001, 2006 and 2016
- The trend towards fewer children per family has continued
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- Figure 14: Percentage of families with dependent children: by number of dependent children in the family, 2006 and 2016
Market Drivers
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- Low interest rates have left the market feeling uncompetitive
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- Figure 15: Average monthly quoted cash deposit and ISA interest rates, January 2008-January 2017
- Funding for Lending has reduced providers’ commercial interest
- The child population is expected to grow
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- Figure 16: Projected size of UK child population, 2016, 2021, 2026 and 2031
- Parents are less likely to describe their finances are healthy…
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- Figure 17: Current financial situation – Parents versus non-parents, February 2016
- …and are less certain about the immediate future
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- Figure 18: Confidence in financial situation over the coming year – Parents versus non-parents, February 2016
Companies and Brands – What You Need to Know
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- Limited product development and innovation
- Stocks and Shares Junior ISAs offer competitive potential
- Savings adspend suffers while investment spend swells
Competitive Strategies
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- Banks have left space for building societies and challengers
- Skipton Building Society launches two accounts to meet specific goals
- Santander and HSBC target adult account ownership in the future
- Regular savings products offer tempting rates
- Stocks and Shares ISA providers make a play for child savings
- MoneyBox
- Orbis Access
Advertising and Marketing Activity
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- Savings adspend falls to a new low, but investment-related spend grows
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- Figure 19: Total above-the-line, online display and direct mail advertising expenditure on investment and savings products, 2012/13-2016/17
- Marginal spend on children’s saving and investment products
- Nationwide bucks the trend with major TV campaign
- Investment Junior ISAs also driving some adspend activity
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- Figure 20: Above-the-line, online display and direct mail adspend on identified children’s saving and investment products, 2016/17
- Other selected marketing activity
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Two thirds of parents save for their children
- Child Trust Fund legacy continues despite freedom to swap
- Parents seek out maximum control over their children’s savings
- Parents are keen to be rewarded for regular saving
- Parents expect their money to be used according to their wisdom
Who Saves for Children?
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- Two thirds of parents save for their children…
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- Figure 21: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
- …and more than a quarter of grandparents too
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- Figure 22: Proportion of adults with children and whether or not they are saving on their behalf, February 2017
- Men are more likely to say they are saving for children than women
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- Figure 23: Proportion who are parents of children under 18 and those who are saving for them, by gender, February 2017
Products Used for Children’s Savings
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- Child Trust Fund legacy continues despite freedom to swap
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- Figure 24: Products used for children's savings, February 2017
- Older parents strongly favour instant-access options
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- Figure 25: Products used for children's savings, by age, February 2017
Interest in Children’s Savings Accounts Features
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- Online management can help deliver sought-after parental controls
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- Figure 26: Interest in features of a new children's savings product, February 2017
- The passbook has a limited appeal, dwarfed by online channels
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- Figure 27: Interest in features of a new children's savings product, by age, February 2017
- Providers with wealthier customers can cross-sell using online services
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- Figure 28: Interest in features of a new children's savings product, by demographic status, February 2017
Interest in Children’s Savings Account Incentives
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- Parents seek rewards for saving regularly
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- Figure 29: Interest in incentives of a new children's savings product, February 2017
- Millennial parents are the most likely to look for parental rewards
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- Figure 30: Interest in incentives of a new children's savings product, by age, February 2017
Attitudes towards Saving for Children
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- Parents expect their money to be used wisely…
- …and secretive saving helps ensure sensible spending
- A quarter of parents have active plans for their children
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- Figure 31: Attitudes towards saving for children, February 2017
- Socio-economic differences in parental approach to saving
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- Figure 32: Attitudes towards saving for children, by demographic status, February 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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