A straightforward approach to savings

(Alamy)

You’re more likely to get divorced than change your bank account. No wonder banks and building societies try to hook people in as young as possible. From NatWest piggy banks to Santander building blocks ads, it seems everything possible has been done to interest children and – when they are too young to manage their own savings – their parents.

But has it? Are the financial institutions doing enough to attract people to the world of children’s savings?

It was back in the Eighties when high street banks first realised there was an untapped children’s market out there. Previously, children may have had a building society or Post Office account set up for them when they were born, but withdrawing money usually needed a parent’s signature. Banks then spotted an opportunity to encourage children to learn about managing and saving money. Two schemes stood out. The first was the NatWest piggy bank scheme, aimed at the younger, primary school end of the market. “Their family of piggy banks, that you got upon opening an account and then saving in that account, caught the imagination of many and they couldn’t produce enough,” says Philip Davies, managing director at brand specialists Dragon Rouge.

Many adults are still reminded of the TV advert whenever they hear the overture from The Marriage of Figaro (changed, of course, to Pigaro). The fact that a complete set of NatWest piggy banks can fetch up to £200 today shows not only the scheme’s success, but it’s place in British nostalgia.

Midland Bank stole the show with older children, with its Griffin Savers account – Griffin being a mythical creature with the body of a lion and head and wings of an eagle. If you kept at least £10 in your account for the first six months, you got a whole selection of goodies ranging from a gym bag to geometry set.

The problem, according to Dave Birch, director of Consult Hyperion, is that banks and building societies haven’t really moved on, whereas today’s children have. “I only have to compare what my own kids learn about money from World of Warcraft (everything) with what they have learned from banks (nothing). Only recently, I was sitting in on a focus group for a bank with 16-year-olds and it quickly became clear they had no knowledge of banking, despite savings for children being a standard part of the system.

“I think one of the main reasons is that banks seem to misunderstand how children use the media and therefore receive their messages. The kids were being asked about email, when they’re far more likely to use Facebook. The kids were being asked about television ads, but many children watch their shows on TVCatchup, where they skip the ads.”

The level of engagement between banks and young people is almost zero, agrees Paul Simonet, head of brand strategy at communications company Imagination. “They should take a lesson from technology companies, particularly telecoms, who devise multiple marketing initiatives to appeal to young people, such as messaging, best mates tariffs and multiple SIM cards,” he says.

Brian Millar, director of strategy at the research agency Sense Worldwide, isn’t so sure. “Banks have gone down the route of trying to be hip by offering iTunes vouchers and similar if children and their parents join. In fact, when banks went online, they worked hard to adopt a Silicon Valley tone of voice, but the problem is it can come across a bit ‘dancing dad’. I think they could learn from Mercedes when it comes to building lifetime relationships. Mercedes treats eight-year-olds with genuine respect. If they’re in a showroom or at a roadshow, they’re given all the brochures and offered the chance to sit in the car. Eight-year-olds are seen as customers that have already started saving.”

Despite their use of childish imagery, many bank and building society marketing campaigns aren’t aimed at kids at all. “We have a history of using childhood references in our ads, but it’s adults we’re appealing to,” says Keith Moore, head of brand and communications at Santander, whose offerings include the 11-to-15 current account and fixed rate monthly saver. “We started with the imagery of Airfix, then Scalextric and, most recently, red building blocks. We try to find ways to make connections on a family level.”

LloydsTSB, whose young savers account can be managed by a parent until the age of 15, says it tries to reach both parents and children through its animation. “With younger children, part of our campaign involves this little boy, Billy, who wants to save for a crocodile,” says a LloydsTSB spokeswoman. “He does chores to earn money, but then spends his savings on things like chocolate and then feels sad he can’t get the crocodile. It’s about getting parents to sit down and discuss it with their children, teaching them that if you really want something, you have to save.”

Halifax, whose children’s regular saver account offers 6 per cent gross (4.8 per cent net) with a minimum deposit of £10 and a 12-month term, focuses its strategy on surveying children about their approach to money – asking what they use it for, how much they get, and whether they know how much a pint of milk costs. “Once, it gets in the news, we hope it will provoke discussion,” explains a Halifax spokesman.

NatWest has launched a programme, MoneySense for Schools, enabling more schoolchildren to learn about what banks do, while HSBC offers children the chance to start up their own school bank, run for their fellow pupils with support and guidance from local HSBC employees.

Such moves have been successful, but there is clearly more to be done – something that Siobhan Freegard, cofounder of Netmums, believes is also true when it comes to parents. “We find that people on NetMums often ask other mums what’s the best way to save for children. Usually, they have no idea. I wish banks would give us parents something in-between patronising imagery and over-jargoned explanations. We just want simple products and clear explanations. Believe me, the appetite is there and children would benefit too.”

Stephen Woodford, CEO of integrated agency DDB UK, believes Metrobank is the one towatch when it comes to attracting a family audience. “Here’s a bank that welcomes pets, opens seven days a week and offers genuinely childfriendly services, like change machines, when other banks turn small change away.” With Metro Bank having opened more accounts in its first month than it expected to take in the whole year, maybe they will lead the way.

To discover more about saving for your children, click here.