John Lewis announced on Thursday it is launching its first investment products to customers in partnership with Nutmeg, a digital wealth manager, as it looks to diversify its revenue sources beyond retail.
The products include a junior individual savings account (ISA) — a tax-free investment with a yearly allowance of £9,000 ($12,376), which enables parents and guardians to make regular contributions for someone under the age of 16, which only the child can access when they turn 18.
There is also a stocks and shares ISA, plus a general investment account for those who have used up their £20,000 ISA allowance for the year.
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All ISAs will invest in funds with high environmental, social, and governance (ESG) standards.
“The three new products aim to help those who otherwise would not consider investing and are the latest to be introduced to John Lewis financial services, following the relaunch of our home insurance and retail credit offers earlier this year,” the company said.
The move is part of John Lewis’ new strategy of wanting 40% of profits to come from outside retail by 2030. This also includes building 10,000 rental homes in the next 10 years.
It said it has committed £100m over the next five years to quadruple its financial services business.
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This comes as retail was hit hard by the pandemic. In March, John Lewis said it was not planning to reopen eight of its 42 shops after lockdown, adding to eight closures last year.
John Lewis commissioned a survey of 2,000 UK adults in which 52% of respondents said they found the pandemic had made them reassess how they spend and save.
The survey also showed that 72% of people said they would consider investing in stocks and shares rather than just putting their money into a current account, but 59% had no idea where to start.
“Customers can start investing from as little as £100 and choose a timeframe and risk level that suits them" with the new products, the company said.
Amir Goshtai, John Lewis financial services director, added that "our products allow people to put money aside and to take that first step into what is often perceived as the complicated world of investments."
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