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Home  > Business/Finance  >  Financial Services  >  Financial Management

Family, Parenthood and the Management of Finances - UK

Published Date: August 2006
Published By: Mintel International Group Ltd.
Page Count: 153
Order Code: R560-2235
 
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INTRODUCTION AND ABBREVIATIONS
Survey coverage
Other reports of relevance
Key Sources
Global information and research
Consumer research
ACORN
ABBREVIATIONS


EXECUTIVE SUMMARY
Background
The changing family environment
Figure 1: Presence of children, living at home or elsewhere, May 2006
Financial responsibilities
Figure 2: Person responsible for ensuring household bills are paid and making financial decisions, May2006
Preferred sources of financial information and advice
Figure 3: Sources most used for financial information and advice, May 2006
The influence of parents
Figure 4: Financial assistance/guidance given by parents, May 2006
is acknowledged by half of all adults aged 16-54
Parents’ perspective
Figure 5: Ways in which parents/guardians provide financial assistance/guidance to their children, May 2006 13Inheritance intentions
Generational differences
Figure 6: Agreement with statements about personal finance and managing money, by age group, May2006
In conclusion


FINANCIAL CONTEXT
From little acorns
The financial lifecycle
Figure 7: Financial needs and key activities at various lifestages
Shifting dynamics
Rising household debt: a sign of the times
Figure 8: Amount of household debt outstanding, secured and unsecured, 1993-2006
Balancing the need to borrow with the need to save
Figure 9: Population segmentation, according to possession of debts and savings, by gender, age andsocio-economic group, October 2005
Student debt
Children’s attitudes towards money
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
Figure 11: Attitudes towards money, spending, saving and debt - 15-19-year-olds, 2006

HOUSEHOLD STRUCTURE
Demographic trends
A variety of family structures
Figure 12: GB households and family types, 1971-2005 (at intervals)
The growth of lone-parent families
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
Figure 14: Distribution of household savings, by family strucure and amount, 2003/04
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
Figure 16: Presence of children living at home or elsewhere, by gender, May 2006
Figure 17: Presence of children living at home or elsewhere, by marital status, May 2006
Young women leave their parental home earlier than men
Figure 18: Proportion of adults living with their parents, by gender and age group (England), 1991-2005

FINANCIAL RESPONSIBILITY
Identifying the Household Accountants and Financial Decision-makers
Just one person in a household tends to be responsible for ensuring bills are paid
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 40Figure 20: Cross-analysis - responsibility for making financial decisions, by responsibility for payinghousehold bills/other expenses, May 2006
Women are more likely to manage household expenses
Figure 21: Person responsible for paying household bills/other expenses and making financial decisions, bygender, May 2006
In the majority of couple households, one person takes charge of household finances
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
Figure 23: Person responsible for paying household bills/other expenses and making financial decisions, bycombined gender and marital status, May 2006
ABs are most likely to share financial responsibilities in the home
Figure 24: Person responsible for ensuring household bills/other expenses are paid, by gender, age, socioeconomicgroup, household status and working status, May 2006
Young working couples also tend to share the burden
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
Figure 26: Person responsible for ensuring household bills/other expenses are paid, by region, householdincome, tenure and ACORN category, May 2006
Financial independence improves with age
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
Figure 28: Person responsible for making financial decisions, by detailed lifestage, May 2006
Slight regional differences
Figure 29: Person responsible for making financial decisions, by region, household income, tenure andACORN category, May 2006
Female heads of household have lower product holdings than their male counterparts
Figure 30: Ownership of financial products, by household status, May 2006
Those who share financial responsibilities have the greatest product holdings
Figure 31: Ownership of financial products, by person responsible for paying household bills/otherexpenses, May 2006
and therefore are the most financially active
Figure 32: Ownership of financial products, by person responsible for making financial decisions, May 2006

FINANCIAL MENTORS
Learning from experience
Improving financial capability
The importance of parents
Sources of information and advice
The power of personal recommendation
Parents versus professionals
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
Figure 34: Top five sources of financial information/advice, by gender and age group, May 2006
while ABs strongly favour IFAs
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
Figure 36: Main source categories used for financial information and advice, by gender, age, socioeconomicgroup and household status, May 2006
Those who share responsibilities are keenest to draw on the services of a financial expert
Figure 37: Sources most used for financial information and advice, by person responsible for ensuringbills/other expenses are paid, May 2006
Figure 38: Sources most used for financial information and advice, by person responsible for makingfinancial decisions, May 2006

PARENTAL INFLUENCES
Assessing parental influences on financial behaviour
Figure 39: Financial assistance/guidance given by parents, May 2006
Young adults receive much financial help and guidance from parents
Figure 40: Type of financial assistance/guidance received from parents, by gender, age, socio-economicgroup, lifestage and age left full-time education, May 2006
Nearly half of all ABs received financial support from parents while at university
Figure 41: Top seven types of financial assistance/guidance received from parents, by socio-economicgroup, May 2006
Repertoire analysis reveals the extent of parental help
Figure 42: Number of types of financial assistance/guidance received from parents, May 2006
Parents can lay the foundations
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
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
Figure 45: Agreement with statements about parents and personal finance, May 2006
The parental influence is predominantly positive
Figure 46: Cross-analysis of agreement with statements about parents and personal finance, May 2006
Correlation analysis
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
Figure 48: Agreement with statements about parents and personal finance, by type of financialassistance/guidance received from parents, May 2006
Definite link between parental influence and help received
Figure 49: Agreement with statements about parents and personal finance, by number of types of helpreceived from parents, May 2006
Those with a wide product repertoire are most likely to say they expect to get an inheritance
Figure 50: Agreement with statements about parents and personal finance, by number of financial productsowned, May 2006
ABs are most likely to have been influenced by parents
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
Encouraging children to save is the most popular way of helping them financially, according toparents
Figure 52: Ways in which parents/guardians provide financial assistance/guidance to their children, May2006
Nearly half of all parents give money-management advice to grown-up children still living athome
Figure 53: Ways in which parents/guardians provide financial assistance/guidance to their children, by ageand location of child, May 2006
Figure 54: Number of CTF vouchers issued and accounts opened, May 2005-May 2006
Parents’ view versus child’s view
Figure 55: Comparing parents’ and offspring’s viewpoints on the financial help given, May 2006
Financial needs change with age
Figure 56: Types of financial assistance/guidance given to children, by gender, age, socio-economic groupand lifestage, May 2006
Affluent parents can more easily afford to help their children
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
Figure 58: Cross-analysis of type of financial assistance/guidance given to children, May 2006
Parents provide financial support in multiple ways
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
Figure 60: Agreement with statements relating to inheritance and other related matters, May 2006
Figure 61: Agreement with statements relating to inheritance and other related matters, by age and locationof child, May 2006
and this desire increases with the amount of help already given
Figure 62: Agreement with statements relating to inheritance and other related matters, by number of typesof financial assistance/guidance given to children, May 2006
Young parents are most eager to bequeath an inheritance
Figure 63: Top six statements about children, inheritance and other related matters, by gender, age, socioeconomicgroup and lifestage, May 2006
Half of those in the highest income band would rather help their children now or when theyneed it most
Figure 64: Top six statements about children, inheritance and other related matters, by marital status,household income, tenure and region, May 2006

GENERATION GAP
Only three in five adults say they are good at managing their money
Figure 65: Agreement with statements about personal finance and managing money, May 2006
Young and impulsive
Figure 66: Agreement with statements about personal finance and managing money, by gender andlifestage, May 2006
Older and wiser
Figure 67: Agreement with statements about personal finance and managing money, by age group, May2006
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
Figure 69: Agreement with statements about personal finance and managing money, by socio-economicgroup, May 2006
Analysis summary
Parents can help their offspring become financially competent
Figure 70: Agreement with statements about personal finance and managing money, by types of financialhelp received from parents, May 2006
The more help parents give, the better able their children will be to manage their finances
Figure 71: Agreement with statements about personal finance and managing money, by number of types ofhelp received from parents, May 2006
Cluster analysis
What is cluster analysis?
Money-management clusters
Figure 72: Money-management clusters, May 2006
Figure 73: Composition of money-management clusters, May 2006
A quarter of those in the Foolhardy cluster have a personal loan
Figure 74: Financial products owned, by money-management clusters, May 2006
The Financially Competent have the widest repertoire of products
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 theFinancially Naοve…
Figure 76: Person responsible for ensuring bills are paid, by money-management clusters, May 2006
mainly because these clusters have a younger age profile
Figure 77: Profile of money-management clusters, by gender, age, socio-economic group and householdstatus, May 2006
Marriage improves a person’s financial capability
Figure 78: Profile of money-management clusters, by marital status, lifestage, working status and age leftfull-time education, May 2006
as does owning a home
Figure 79: Profile of money-management clusters, by tenure, household income, region and ACORNcategory, May 2006
Broadsheet readers are the most Financially Competent
Figure 80: Profile of money-management clusters, by new technology usage, newspaper readership andsupermarket usage, May 2006
Developing a savings ethic in the young lays the foundation of financial competency
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
Figure 82: Agreement with statements about parents and personal finance, by money-managementclusters, May 2006

THE FUTURE
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

APPENDIX: RESEARCH METHODOLOGY
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