Table of Contents
Executive Summary
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- The market
- Savings growth remains slow
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- Figure 1: Deposits from households, 2009-19
- Stocks and shares ISAs outperform cash ISAs
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- Figure 2: Number of cash and stocks and shares ISAs and amounts subscribed, 2012/13-2018/19
- NS&I sees 7% growth in funds
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- Figure 3: Transactions with investors, by NS&I product, 2018 and 2019
- Interest rate increases are unlikely in the short term
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- Figure 4: Consumer deposits quoted interest rates to households, October 2011-October 2019
- Real wages continue to grow and savings ratio starts to recover
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- Figure 5: Household savings ratio, 2009-H1 2019
- Regulators continue to review price discrimination and the ‘loyalty penalty’
- The consumer
- People are more careful when spending than saving
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- Figure 6: Spending habits self-classification, October 2019
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- Figure 7: Saving habits self-classification, October 2019
- Share of people saving regularly increases in 2019…
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- Figure 8: Current saving activity, October 2019
- …but 29% have either no savings or less than £500
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- Figure 9: Value of savings and investments, October 2019
- 90% identify at least one savings priority
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- Figure 10: Saving priorities, October 2019
- Easy-access and cash ISAs are the most common savings products
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- Figure 11: Savings product ownership, October 2019
- Negative perceptions of limited-access accounts mean savers miss out on better rates
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- Figure 12: Savings products perceptions, correspondence analysis, October 2019
- Online via website is the most preferred channel
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- Figure 13: Channel preference, October 2019
- Technology is widely appreciated but direct prompts are not necessarily welcomed
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- Figure 14: Attitudes towards saving and money management, October 2019
- What we think
Issues and Insights
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- Nudges: “Neutral” technology versus patronising interference
- The facts
- The implications
- Opportunity for providers to help savers maximise their returns
- The facts
- The implications
The Market – What You Need to Know
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- Savings growth remains slow
- Stocks and shares ISAs outperform cash ISAs
- Interest rate increases are unlikely in the short term
- Real wages continue to grow and savings ratios start to recover
- Regulators continue to review price discrimination and the ‘loyalty penalty’
Market Size
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- Savings growth remains slow
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- Figure 15: Deposits from households, 2009-19
- Stocks and shares ISAs outperform cash ISAs
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- Figure 16: Number of cash and stocks and shares ISAs and amounts subscribed, 2012/13-2018/19
- NS&I sees 7% growth in funds
- New strategy makes investments more accessible…
- …while some products are wound down
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- Figure 17: Transactions with investors, by NS&I product, 2018 and 2019
The Savings Environment
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- Real wages continue to grow
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- Figure 18: CPI and average weekly earnings, June 2016-October 2019
- Interest rates remain historically low…
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- Figure 19: Consumer deposits quoted interest rates to households, October 2011-October 2019
- …and no increases are expected anytime soon
- Household savings ratio starts to recover, albeit slowly
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- Figure 20: Household savings ratio, 2009-H1 2019
- Proportion of people with no savings has declined
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- Figure 21: Value of savings and investments, 2016-19
The Regulatory Environment
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- Regulators continue to review price discrimination and the ‘loyalty penalty’…
- …with the expansion of Open Banking expected as a way to improve competition
- Withdrawal of the Help to Buy ISA may push first-time buyers towards its closest alternative
The Consumer – What You Need to Know
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- People more careful when spending than when saving
- Share of people saving regularly increases in 2019
- 90% identify at least one savings priority
- Easy-access and cash ISAs are the most common savings products
- Negative perceptions could mean savers miss out on better rates
- Online via website is the most preferred channel
- Technology is widely appreciated but direct prompts are not necessarily welcomed
Saving and Spending Habits
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- Spending habits self-classification
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- Figure 22: Spending habits self-classification, October 2019
- Saving habits self-classification
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- Figure 23: Saving habits self-classification, October 2019
- Correlation between saving and spending habits
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- Figure 24: Savings habits self-classification, by spending habits self-classification, October 2019
Saver Profile
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- 11% of people have no savings…
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- Figure 25: Value of savings and investments, by age, October 2019
- …a further 18% have less than £500…
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- Figure 26: Value of savings and investments, 2016-19
- …but 79% of people are currently contributing to their savings
- Share of people saving regularly increases in 2019
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- Figure 27: Current saving activity, October 2018 and October 2019
Saving Priorities
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- Saving for a ‘rainy day’ is the most common reason to save…
- …followed by more specific goals such as holidays or retirement
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- Figure 28: Saving priorities, October 2017 and October 2019
- 90% identify at least one savings priority
- Majority of savers stick to one or two priorities
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- Figure 29: Repertoire of different saving priorities, October 2019
- Priorities and goals go together
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- Figure 30: Repertoire of saving priorities, by agreement with the statement ‘I set myself savings goals’, October 2019
Savings Product Ownership
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- Easy-access and cash ISAs are the most common savings products
- 32% of savers claim to have a regular savings account
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- Figure 31: Savings product ownership, October 2019
- People who maximise the returns on their savings look beyond easy access
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- Figure 32: Savings product ownership, by saving habits, October 2019
- Majority of savers have more than one product
Savings Product Perceptions
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- Easy-access accounts are associated with positive attributes
- Negative perceptions could mean savers miss out on better rates
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- Figure 33: Savings products perceptions, correspondence analysis, October 2019
- Savers are confused about cash ISAs
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- Figure 34: Savings products perceptions, October 2019
Channel Preference
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- Online via website is the most preferred channel…
- …with mobile apps generally behind in person/face to face
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- Figure 35: Channel preference, October 2019
- Convenience is key…
- …but the personal touch offers reassurance
Attitudes towards Saving and Money Management
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- More than half of savers set themselves savings goals
- Most are happy with their approach to money management
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- Figure 36: Attitudes towards saving and money management, October 2019
- Generational differences in attitudes towards provider involvement
- Technology is helpful to the majority…
- …but not everyone would welcome help from financial services providers
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- Figure 37: Attitudes towards help from financial services providers, by age, October 2019
- A and D socio-economic groups are more likely to value intervention
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- Figure 38: Attitudes towards saving and money management – CHAID – Tree output, October 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Correspondence analysis methodology
- CHAID analysis methodology
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- Figure 39: Attitudes towards saving and money management – CHAID – Table output, October 2019
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- Figure 40: Spending habits self-classification – CHAID – Table output, October 2019
- Figure 41: Saving habits self-classification – CHAID – Table output, October 2019
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