Protecting the Financial Needs of Today s Households

1.1. Protection insurance must appeal to customers’ financial concerns
1.2. Key findings
1.3. Critical success factors

2.1. Introduction
2.2. Assessing the wider family and household dynamics of individuals
2.2.1. Moving from the financial and protection needs of individuals to families
2.2.2. There are 26.7 million families in the UK according to the ONS
2.2.3. Lifestage is a combined outcome of four factors
2.2.4. Lifestage demographics provide greater understanding of lifestyle
2.2.5. House buying and settling down to start a family is occurring later in life
2.2.6. Retirement age is increasing, meaning individuals will have to work later into life
2.2.7. Household income is higher for families with children
2.3. Households with children must manage work and childcare
2.3.1. Adults can play different employment and care roles within the household
2.3.2. It is common for both adults in a household with children to be working full-time
2.3.3. The stay-at-home parent transitions to working part-time as children get older
2.3.4. Parents of adult children are less likely to work as they approach retirement
2.3.5. How parents balance childcare and work depends on the number of children
2.3.6. Elderly dependents are also a responsibility

3.1. Bank accounts and cards
3.1.1. Current accounts, savings accounts, and credit cards are the most common financial products
3.1.2. Product penetration of banking accounts and card products
3.1.3. A higher value of money is stored in savings as opposed to current accounts
3.1.4. The average value held in current accounts is steady across all lifestages
3.2. Property, mortgages, and loans
3.2.1. Property purchase increases by lifestage, as does outright ownership
3.2.2. Average house values are highest for families with dependent children
3.2.3. Inheritance and help to buy play an important role in getting on the property ladder
3.2.4. Gifting is the most common way to provide help to buy a property
3.2.5. Inheritance money is mainly stored in savings accounts or investments
3.2.6. Earlier lifestages are receiving regular help from family to pay for monthly expenses
3.2.7. Property is an asset that can be used to fund retirement
3.2.8. Those with dependent children are most likely to have an investment property
3.2.9. The government is cracking down on buy-to-let landlords
3.2.10. Loans and motor finance
3.3. Investment products
3.3.1. There are four main types of investments
3.3.2. Consumers can have a lack of understanding about investments
3.3.3. Equities (stocks and shares) are the most popular type of investment product
3.3.4. Uptake of investment products reflects affluence
3.3.5. Different lifestages have different behaviors when it comes to investment products
3.4. Pensions
3.4.1. Earlier lifestages are more focused on family and home buying
3.4.2. Pensions are the main way of funding retirement
3.4.3. Those in later lifestages have a better idea of how they will fund their retirement
3.4.4. The use of pensions to fund retirement increases by lifestage
3.4.5. Pension freedoms have increased the popularity of income drawdown
3.4.6. Part-time employment can supplement income from a pension in retirement
3.4.7. More are withdrawing from their pensions following the pension freedoms
3.4.8. Parents with adult children at home are using their pensions to help their children
3.5. Protection insurance products
3.5.1. Life insurance was the most popular protection product purchased
3.5.2. Lifestages with dependent children are most likely to purchase protection
3.5.3. Buying a house, having children, and paying for funerals are life insurance triggers
3.5.4. Buying a house and having a child are the top triggers for buying income protection
3.5.5. Having a child, poor family medical history, and changing jobs are triggers for buying PMI
3.5.6. Buying or moving house is the top trigger for buying critical illness insurance
3.5.7. Paying monthly bills and saving for retirement are the top financial concerns

4.1. Key success factors for targeting lifestages
4.1.1. The young/pre-family lifestage want digital and affordable propositions
4.1.2. Child-free professionals must be targeted when buying a house
4.1.3. Lifestages with dependent children are focused on protecting their families
4.1.4. Targeting households with adult children must focus on retirement and the bank of mum and dad
4.1.5. Targeting those who are post-family and still working should focus around retirement
4.1.6. Targeting the retired post-family segment should focus on retirement and inheritance planning
4.1.7. Conclusion

5.1. Abbreviations and acronyms
5.2. Bibliography
5.3. Methodology
5.3.1. 2017 UK General Insurance Consumer Survey
5.4. Further reading

Table 1: Demographics by lifestage (%), 2017
Table 2: Uptake (%), average value (£) and number of different investment product types held (%), by lifestage, 2017

Figure 1: The finances of families and households are interlinked
Figure 2: Individuals can be segmented into lifestages reflective of their household dynamics
Figure 3: Lifestage is reflective of age but is determined by lifestyle
Figure 4: Home ownership increases by lifestage
Figure 5: Household income is highest for lifestages with children living in the household
Figure 6: It is common for both adults in households with children to be working full-time
Figure 7: How parents balance childcare depends on the number of children
Figure 8: Most elderly dependents do not live in the same household as their children
Figure 9: Customers are most likely to have bank accounts and credit cards
Figure 10: Current accounts, savings accounts, and credit cards have high uptake
Figure 11: Most have under £2,000 in a current account and less than £10,000 in savings
Figure 12: The average value held in current accounts is £2,000 and £36,000 for savings
Figure 13: Outright home ownership increases by lifestage as mortgages are paid off
Figure 14: Average house values rise when starting a family, and fall when downsizing in later lifestages
Figure 15: Inheritance and help to buy is important in house purchasing for earlier lifestages
Figure 16: The proportion of individuals receiving help to buy is highest among the earlier lifestages
Figure 17: Inheritance is mainly stored in savings accounts
Figure 18: Earlier lifestages are also getting help for day-to-day expenses
Figure 19: Downsizing is the main way property is expected to be used to fund retirement
Figure 20: Parents may be left with an empty property when they move in together, which can be used for investment
Figure 21: Lifestages with pre-school age children have the highes- value investment properties
Figure 22: Personal loans are most common among lifestages with dependent children
Figure 23: Exchange-traded funds have the lowest penetration but the highest average value of money invested
Figure 24: Different lifestages have different behaviors when it comes to investment products
Figure 25: Lifestages with dependent children are the most likely to have more than one type of investment product
Figure 26: The value held in investment products differs by lifestage
Figure 27: Private pensions have higher uptake among later lifestages
Figure 28: Pensions are the main way to fund retirement
Figure 29: Pensions are the main way to fund retirement among all lifestages
Figure 30: Withdrawing from a pension is becoming increasingly popular due to pension freedoms
Figure 31: Money withdrawn from pensions has different uses
Figure 32: Lifestages with dependent children are most likely to have purchased protection insurance in the last year
Figure 33: The top triggers to buy life insurance are dependent on lifestage
Figure 34: Buying or moving house and having a child are the top triggers for buying income protection insurance
Figure 35: Having a child, poor family medical history, and changing jobs are triggers for purchasing PMI
Figure 36: Critical illness is often sold alongside life insurance for protecting a mortgage
Figure 37: Saving for retirement increases as a financial concern with age
Figure 38: Summary and critical success factors for targeting young/pre-family households
Figure 39: Summary and critical success factors for targeting child-free professionals
Figure 40: Summary and critical success factors for targeting households with dependent children
Figure 41: Summary and critical success factors for targeting households with adult children
Figure 42: Summary and critical success factors for targeting post-family households which are still working
Figure 43: Summary and critical success factors for targeting post-family households which are retired