Children's education focus enhanced by three-child policy, survey says

"Children's education" became the top financial goal two years ago for many rising affluent people in China, and now it has been enhanced by the three-child policy.

Children's education has consistently appeared as a top five current and future concern, according to a survey by Shanghai Advanced Institute of Finance under Shanghai Jiao Tong University in partnership with US financial consultancy Charles Schwab.

In its survey conducted in 2019, it replaced "money for emergencies" to be the top financial goal for the rising affluent, defined as people with annual income between 125,000 yuan (US$19,479) and 1 million yuan while owning investable assets of less than 7 million yuan.

"The three-child policy has prompted renewed attention toward family finances," said Lisa Hunt, managing director and head of international services at Charles Schwab. "Funding children's education motivates respondents to undertake financial management."

This year's survey results suggested that children's education is a source of pressure for the rising affluent, and drives a desire to improve their financial capabilities.

At the same time, respondents with children also demonstrate higher overall well-being. They have the highest confidence, planning and management scores among the 3,648 surveyed who were chosen in a variety of Chinese cities from Beijing and Shanghai to Kunming in Yunnan Province and Shijiazhuang in Hebei Province.

"It indicates that the motivation created by a desire to fund their children's education positively impacts overall financial practice," Hunt said.

"As the financial services industry considers its future development, ensuring that its services are adapted to clients' best interests and recognize the importance of children in family financial planning is essential.

"Helping families alleviate pressure to provide for their children offers a clear pathway to maximizing client interest," Hunt said.

Overall, China's rising affluent have adopted new planning and management measures since the onset of the COVID-19 pandemic, enhancing their financial preparedness.

The rising affluent believe the pandemic positively impacted their finances with 19.8 percent of respondents stating they now have a higher possibility of achieving financial goals, compared with 8.5 percent in 2020.