Since the launch of the Savings Plan for Every Child, more than NIS 20.4 billion has been deposited into the savings plans
41% of parents did not choose an investment plan for their children, and 43% of parents did not make an additional deposit deducted from their child allowance – which could perpetuate inequality
The National Insurance Institute has issued a follow-up report on data from the Savings Plan for Every Child summarizing the program's data, parental involvement and the amount of deposits since the beginning of 2017 (the launch of the program), as well as the summary of data from 2023.
- Since the start of the Savings Plan for Every Child program, more than NIS 20.4 billion has been transferred to savings plan, NIS 3.32 billion of which was transferred in 2023.
- As may be recalled, in January 2017 was launched a program designed to guarantee all Israeli children a savings they could use upon reaching the age of 18 or 21 and which will help them at the beginning of their adult life. As part of the plan, the State makes monthly deposits, in addition to the child allowance – of NIS 55 into the savings plan that the parents have opened for their children. The parents, for their part, are entitled to deposit an additional amount of NIS 55 take from the child allowance to which they are entitled, thus doubling the monthly deposit amount.
- At the end of 2023, more than 3.7 million savings were reported, with 3.5 million active savings plans and 116,793 of them are plans with discontinued deposits. During 2023 – 115,893 savings plans were fully redeemed and 1,224 partially redeemed, amounting to approximately NIS 679 million.
- Of the total active "Savings Plan for Every Child" – 21% were managed in banks, while 79% were managed in various provident funds. It should be noted that last week a decision was passed, to be implemented in 2025, according to which it will be possible to move the savings from a bank to a provident fund – something that has not been possible thus far.
- The report of the National Insurance Institute's Research Administration details the distribution of savings that were active in 2023 between banks and provident funds, while the largest number of savings managed by banks are located in Bank Hapoalim, followed by Bank Leumi, Mercantile Bank and Discount Bank.
- The largest number of savings managed by provident funds is found in Altshuler Shaham, followed by Harel, Phoenix and Meitav Dash provident funds.
- Of all the savings reported by the investment entities in 2023: Out of NIS 3.7 million savings, a specific savings plan was chosen by the parents for only NIS 2.05 million. That is, only 55% of parents chose a savings plan and were involved in that choice.
- According to the data processing of the National Insurance Institute's Research Administration, the share of parents who choose an investment plan between the start of the program and the end of 2023 for 4.3 million children, redeemed programs included, is 59%.
- In 3.3 million 'Savings for Every Child' plans for which a deposit was made during 2023, in 57% of them (1.9 million) parents chose to make an additional deposit of NIS 55 directly transferred from their child allowance. In other words: 43% of parents did not opt for an additional deposit into their children's savings.
- From January 2017 to the end of 2023, a total of NIS 20.4 billion was transferred to the savings plans (including redeemed ones), with NIS 14.6 billion (72%) deposited by the National Insurance Institute (basic deposit) and NIS 5.7 billion (28%) credited as part of the parents' 'additional deposit' transferred from the child allowance.
- The total yield from deposits in banks and provident funds related to the plan operation amounted to NIS 1.9 billion (in the report of the National Insurance yields are detailed for each bank and provident fund).
- As an integral part of the program, there are a number of 'stages' throughout the program and grants are given 'at these stages': there is a grant at the age of 3, at the age of 18 if it was decided to leave the savings funds until the age of 21 and an additional grant at the end of the program – at the age of 21.
- According to the National Insurance report, for 182.2 thousand children who turned 3 in 2023 – an amount of approximately NIS 50.1 million was deposited.
- For 149.8 thousand children who turned 18 in 2023 – grants were deposited by the National Insurance Institute in the amount of NIS 82.4 million.
- And for 94.7 thousand of children who turned 21 in 2023 – the National Insurance deposited a total of NIS 52.1 million in grants.
- In contrast to 2022, a year in which newly opened provident funds had losses, the savings opened in 2023 yielded a profit of about NIS 8 million. Deposits in banks yielded a profit of only NIS 260 thousand approximately.
- In 2023, savings plans were opened for 196,291 children, with 108,463 newborns in that year – 87% savings were opened in provident funds, while only 13% in banks. For 70,928 of the children for whom a savings plan was opened – their parents chose an investment plan and for 37,535 children, an investment plan was chosen by default due to the lack of involvement of the parents.
- Out of 37,535 children for whom the parents did not choose a plan, 7,140 (19%) of them are first children in the family and 30,395 (81%) are second or later children. This means that none of these children received an additional NIS 55 deposit.
- Out of 70,928 children born in 2023 for whom the parents chose a plan, about 34% are first children and about 66% are second or later children.
The National Insurance Institute: "The Savings Plan for Every Child is a good and necessary program as part of mitigating gaps and inequality in the State of Israel. However, the State can act to the best of its capacities but there is also responsibility and involvement required on the part of the parents. Choosing the right investment plan for their children and doubling the deposit taken directly from the child allowance to the extent possible can bring yields of tens and even hundreds of thousands NIS per child. The National Insurance Institute does its best to promote information on the subject through sending messages to parents, an explanation campaign, the website – in which all information relevant to parents is detailed, as well as issuing an annual report to the public to make the unequivocal statement: parental involvement, by making the correct plan choice, is very simple, does not require more than a few actions on a computer and can bring significant profits to Israeli children who could then have a better start in their adult lives ."