John Lewis is now offering savings and investment accounts to customers in the midst of a major diversification push away from retail.
The department store chain’s personal savings accounts for adults and children have been launched today in association with digital wealth manager Nutmeg.
Clients can invest as little as £100 for a Junior ISA, and up to £500 for a general investment account or stocks and ISAs.
New products: John Lewis now has new savings and investment accounts for customers amid a major diversification push
Products include a Junior Isa, a tax-free investment with an annual allowance of £9000, which enables parents and guardians to make regular contributions for anyone under the age of 16, who only The child can access at the age of 18.
There is also a stock and share ISA, as well as a general investment account for anyone who has used up their £20,000 annual ISA allowance.
The department store chain said all ISAs would invest in funds with high environmental, social and governance standards.
Certain fees apply, including nutmeg fees and fund costs.
Anyone looking to open an ISA or other savings and investment account should carefully look at any fees involved before taking the plunge.
For example, the Nutmeg fee for John Lewis accounts is 0.75 percent on investments up to £100,000, and 0.35 percent for those with deposits over £100,000.
Ambitious: Sharon White is President of the John Lewis Partnership
The move into savings and investment products, the retailer hopes, will lead to a spurt in savings that was sparked by the Covid-19 pandemic.
“The pandemic has been tough for many, but others have managed to save more every month,” said John Lewis Financial Services Director Amir Goshtai.
He added: ‘They have also reevaluated how they want to spend their money – more than ever, they want to secure the financial future of themselves and their families.
‘Our products allow people to set money aside and take the first step in what is perceived as the complex world of investing.
‘This is where the trust and love that customers have for our brand with Nutmeg’s expertise can make a difference, while making John Lewis even more relevant to life’s big moments; Be it saving for the house or preparing for the arrival of a new baby.
While many people who lost their jobs, or were taken 20 per cent pay cuts during the pandemic, were able to work from home while not spending money in restaurants, pubs and non-essential shops, they have taken a big hit in the past year. Saved and a half.
According to data from the Office for National Statistics, households saved about 26 percent of their disposable income between April and July last year, the highest since records began in 1987.
For comparison, before the lockdown began, the savings rate between January and March last year was less than 9 per cent.
John Lewis’s move into thrift and investing has emerged as other retailers on the scene.
Earlier this year, Tesco Bank announced that it would close all of its current accounts by the end of November, noting that most customers were not using it as their main account.
Tesco’s banking arm launched its current accounts in 2014 with interest on balances and Clubcard spending points.
The bank has over five million customers across all services and closed current accounts for new business in 2019.
Moving away from finance: Marks & Spencer’s banking arm is closing all its current accounts for existing customers on August 31
In July it said 213,000 current accounts were still open, and estimated that only 12 percent of these accounts were being used as primary current accounts.
Marks & Spencer’s banking branch is also closing all its current accounts for existing customers on August 31.
Affected M&S customers will have to change banks by this date and ensure that their money is transferred on time.
But, in light of our collaboration with the John Lewis Partnership, Neil Alexander, Chief Executive of Nutmeg, said: ‘Since the beginning of 2020, we have seen a significant increase in people willing to invest to build more trustworthy financials. Future for you and your family.
He added: ‘Through our partnership with John Lewis, we are providing easy-to-use service and investments that meet the growing demand for social responsibility to help John Lewis customers create a financial future for themselves and their families. Let’s complete it.’
John Lewis’ move to insulate and invest in products is one of several steps the retail conglomerate, which also owns Waitrose, has taken to move away from its reliance on retail.
By 2030, the firm expects 40 percent of its profits to come from outside retail, and it recently revealed plans to house its older stores.
The group plans to build 10,000 new homes over the next ten years, half of which are being developed on their existing property sites.
Earlier this year, the group also launched several home insurance and retail loan products.
The John Lewis Partnership posted a profit before extraordinary items worth £131million in March, but would have posted a loss if not for COVID crisis-related support from the government.
Led by Sharon White, the retailer has permanently closed eight of its stores nationwide, including its famed site in Birmingham.
In July, the retailer said it planned to cut another 1,000 jobs as part of a store management shake-up plan. In just one year, the partnership announced nearly 4,000 job cuts.
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