Table of Contents
Issues in the Market
-
- Key issues covered in the report
- Product definitions
- Individual savings account (ISA)
- Fixed-interest securities
- Investment bonds
- Structured products
- Collective investments
- Abbreviations
Future Opportunities
-
- The boomerang generation – a chance to save?
- The time bubble bursts
- Long-term savings market in uncharted territory…but it will offer opportunities
- Moderate savers need safe, risk-free products
- Engaging with the financial DIY active investor is the challenge for advisers
- Advisers need to be prepared for the impact of demographic changes in the next five years
- Performance a major differentiator in an informed world
- Workplace advice is falling short on performance
- Deposit switching activity among wealthy creates new investment relationship opportunities
- Product offerings need to be trusted to perform and to be transparent
- A holistic approach to long-term savings is needed – with pensions playing the major role
Market in Brief
-
- Engagement in savings and investment
- Product ownership and wealth
- Attitudes towards risk
- Investor behaviour
- Attitudes towards financial advice
- Sources of financial advice
- Bank bailouts and long-term saving
- Investment bonds more popular than unit trusts or OEICS
- Falling equity markets hit full-year sales of investments
- 2009 – a very difficult year in prospect
- Market leaders
- Promotional activity
- Distribution trends
Economic and Investment Climate
-
- Key points
- Economic and investment overview
- UK in recession for first time in 16 years
- Debt deflation set to take hold?
- Debt repayment to become a priority?
- Shifts in investment choices
- Plunging stock markets
-
- Figure 1: FTSE 100 and FTSE All-share indices, quarterly March 2000-December 2008
- Stock market outlook very uncertain
- Despite falling property markets, people still like property investment
Savings and Politics
-
- Key points
- Too much saving in prospect?
-
- Figure 2: Consumers intended savings, investment, borrowing and debt repayment, 2002-08*
- Not spending – but saving is also difficult
-
- Figure 3: Spending and saving climate, 2000-08
- The changing demographic structure of the UK
-
- Figure 4: UK population, by age group, 1998, 2008 and 2016
- Figure 5: UK population, by lifestyle group, 1998-2013
- Mixed messages about savings and investment…
- …but there had been significant government-led product development
- Shaping the future savings landscape…
- …while maintaining profitability
- Company stability a consumer concern
Consumer and Investor Sentiment
-
- Key points
- Confidence near record low
-
- Figure 6: UK consumer confidence index, January 1988-2009
- Savings and investment expected activity back in vogue
-
- Figure 7: Consumers’ expected savings/investment activity, 2002-08
- Signs of an increase in savings activity
-
- Figure 8: Intended saving activities, Q3/Q4 2002-Q4 2008/Q1 2009
- Strong rise in life and pension intentions
-
- Figure 9: Expected life and pensions purchase activity, Q3/Q4 2002-Q4 2008/Q1 2009
- Weak investor sentiment towards equities – but rise in bond sentiment
-
- Figure 10: Expected investment activity, Q3/Q4 2002-Q4 2008/Q1 2009*
- Record lows in mortgage and property intentions
-
- Figure 11: Expected mortgage and property purchase activity, Q3/Q4 2002-Q4 2008/Q1 2009
- Financial wellbeing plummets
-
- Figure 12: Financial wellbeing, 2001-09
- Economy centre stage
The Consumer – Product and Asset Ownership
-
- Key points
- Fall in net worth of household sector in 2008
-
- Figure 13: Household net worth, 2003-08*
- Strongest growth in life and pension assets between 2003-07
-
- Figure 14: Household financial net worth, by asset type, 2003-07
- Savings accounts the most favoured investment product…
-
- Figure 15: Ownership of savings and investment products, December 2008
- …but three in ten have no savings
-
- Figure 16: Numbers of savings and investment products types held, December 2008
- Around 16% of the population have investible assets in excess of £50,000
-
- Figure 17: Overview of value of investible assets (excluding pensions and property investment), December 2008
- Asset-rich individuals have broader and deeper product holdings
-
- Figure 18: Savings and investment products owned, by value of investible assets (excluding pensions and property investment), December 2008
- The benefits of broadening product ownership
-
- Figure 19: Number of savings and investment products owned, by value of investible assets (excluding pensions and property investment), December 2008
Market Size – An Overview
-
- Key points
- Regulated retail investment product sales
-
- Figure 20: Number of new regulated retail investment product sales by sector, 2006-08
- Investment bonds accounted for three fifths of investment sales
-
- Figure 21: Number of new regulated investment sales, by product type, March 2007-April 2008*
Sector Performance
-
- Key points
- Equities losing appeal
-
- Figure 22: Proportion of adults holding investments in stocks and shares or unit trusts, either individually or jointly with another person, 1985-2008
- Steep decline in unit trust/OEIC net retail sales
-
- Figure 23: UK domiciled unit trust/OEIC net retail sales, 2000-08
- Figure 24: Changes in asset class, net retail sales unit trusts/OEICs, 2007 and 2008
- Stampede out of property funds
- ISA contributions up 8% on 2007/08
-
- Figure 25: New ISA business by asset class, 2000/01-2007/08
- The value of ISA funds grew by 6% in 2008
-
- Figure 26: Value of funds held in the two ISA components, 2004-08
- Flight to safety leads to strong gains in gilts in 2008
-
- Figure 27: Size of the gilts market (nominal amount outstanding), 2000-08
- Value of corporate bond funds slumps in market downturn
-
- Figure 28: Total assets held in UK corporate bond sector and all bond sector, 2004-08
- Investment bond appeals wanes
-
- Figure 29: Total number of new single-premium investment bond contracts and value of new premiums, 2002-08
- Change in capital gains tax may weaken role for investment bonds…
- …but will continue to have appeal for income seekers
- Offshore bonds still offer benefits but exposed to lack of cash deposit compensation
- Growth in structured product sales to retail investors likely
Largest Investment Bond Providers
-
- Key points
- Leading providers
Largest Fund Managers
-
- Key points
- Invesco Perpetual keeps top spot
-
- Figure 30: Top 20 unit trust and OEIC fund managers, by retail funds under management, December 2008
- Fidelity takes over as leading ISA fund provider
-
- Figure 31: Top 10 ISA Managers, by funds under management, December 2008
Brand Communication and Advertising
-
- Key points
- Adspend on savings and investment products up sharply in 2007/08
-
- Figure 32: Total advertising expenditure on savings and investment products, by product category 2003/04-2007/08
- ING top advertising spender in 2008
-
- Figure 33: Top 20 advertisers of savings and investment products, 2005/06-07/08
- Television ads are suitable for simple savings products, while the trade press is relied upon more to promote more complex products
-
- Figure 34: Proportional advertising expenditure on savings and investment products, by media type, 2007/08 and 2006/07
Selling Channels
-
- Key points
- Around 50% of investment products and ISAs sold through banks and building societies
-
- Figure 35: Selling channels, by investment products and ISAs, 2007/08
- Unit trusts and OEICs: The main routes to market
- Intermediaries dominant sales channel for unit trusts/OEICs
-
- Figure 36: Selling channels by unit trust/OEIC, gross retail sales, 2004-08
- Fund supermarkets ahead in the ISA fund market
-
- Figure 37: Gross retail sales of ISA funds, by distribution channel, 2004-08
- Cofunds, Skandia and Funds Network leading funds platforms
- IFAs dominate investment bond distribution
-
- Figure 38: Investment bond distribution mix based on new premiums, 2004-08
- Distribution channels by investment bond type
-
- Figure 39: Investment bond distribution mix, by bond type based on new premiums, 2008
The Consumer – Attitudes towards Savings and Investment
-
- Key points
- Savings and investment and the current financial crisis
- The bank bailouts and savings confidence
-
- Figure 40: Impact of bank failures and bailouts, December 2008
- A crisis in investor confidence?
-
- Figure 41: Impact of falling stock markets on investor confidence, December 2008
- Each age cohort faces investment challenges
- A gambling instinct?
-
- Figure 42: Investor confidence and falling markets, by savings ownership, December 2008
The Consumer – Attitudes towards Risk
-
- Key point
- Consumers may have to take on more risk
-
- Figure 43: Statements relating to attitudes towards risk, December 2008
- Wealth preservation is a big driver among older, more affluent age groups
- Great majority of population risk averse
-
- Figure 44: Number of savings and investment product types held, by attitudes towards risk, December 2008
The Consumer – Sources of Saving and Investment Advice
-
- Key points
- Bank staff and IFAs most used for saving and investment advice
-
- Figure 45: Sources of saving and investment advice used in the past, December 2008
- IFAs main source of advice used by the wealthy
-
- Figure 46: Sources of savings and investment advice used in the past, by value of investible assets, December 2008
- IFAs main source of investment advice
-
- Figure 47: Sources of advice used in the past, by savings and investment products held, December 2008
- Emergence of professionally-advised and non-advised groups among savers/investors
- Professionally-advised groups, profiles:
- Non-professionally-advised groups, profiles:
- Banks are the leading source of advice for moderate savers
-
- Figure 48: Number of savings and investment product types held and sources of advice used, December 2008
The Consumer – Attitudes Towards Savings and Investment Advice
-
- Key points
- Only a quarter of consumers believe financial advisers have their customers’ best interests at heart
-
- Figure 49: Agreement with statements about savings and investment advice, December 2008
- Commission bias fears greatest among affluent 35-44-year-olds
- Commission bias in workplace felt most
-
- Figure 50: Agreement with statements about savings and investment advice, by sources of advice used, December 2008
- Greatest scepticism about financial advisers among top saver-investors
-
- Figure 51: Number of savings and investment product types held by Q4
The Consumer – Savings and Investment Behaviour
-
- Key points
- Less than a third of adults believe that it is important to save for the long term
-
- Figure 52: Overview of statements relating to savings and investing behaviour, December 2008
- Being in work is a big incentive to save and make provision for retirement
- Savings behaviour is greatly influenced by current savings holdings
-
- Figure 53: Number of savings and investment product types held, by savings behaviour statements, December 2008
- Property and equity investors have most positive savings behaviour
-
- Figure 54: Statements relating to savings and investing behaviour, by savings and investment products owned, December 2008
- More non-advised investors worried relative to professionally advised
-
- Figure 55: Sources of saving and investment advice used in the past, by statements relating to savings and investing behaviour, December 2008
- Nearly a half of adults like to do their own research before making financial decisions
-
- Figure 56: Statements relating to savings and investing attitudes, December 2008
- Over a half of active savers/investors do their own research
-
- Figure 57: Number of savings and investment product types held, by savings behaviour and industry confidence, December 2008
- Media sources have major influence on some people’s investment behaviour
-
- Figure 58: Sources of advice used in the past, by statements relating to savings and investing attitudes, December 2008
Appendix – The Consumer – Product and Asset Ownership
-
-
- Figure 59: Ownership of savings and investment products, by gender, age, lifestage and marital status, December 2008
-
- Figure 60: Ownership of savings and investment products, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 61: Ownership of savings and investment products, by internet access, internet frequency, web use, newspaper readership and education, December 2008
- Number of savings and investment products held
-
- Figure 62: Number of savings and investment product types held, by demographics
- Value of investible assets held
-
- Figure 63: Overview of value of investible assets (excluding pensions and property investment), by gender, age, lifestage and marital status, December 2008
-
- Figure 64: Overview of value of investible assets (excluding pensions and property investment), by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 65: Overview of value of investible assets (excluding pensions and property investment), by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
- Figure 66: Those who have investments in stocks and shares or unit trusts either individually or jointly with another person, December 2008
-
- Figure 67: Statements relating to attitudes towards risk, by gender, age, lifestage and marital status, December 2008
-
- Figure 68: Statements relating to attitudes towards risk, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 69: Statements relating to attitudes towards risk, by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
Appendix – The Consumer – Sources of Advice
-
-
- Figure 70: Sources of saving and investment advice used in the past, by gender, age, lifestage and marital status, December 2008
-
- Figure 71: Sources of saving and investment advice used in the past, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 72: Sources of saving and investment advice used in the past, by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
Appendix – The Consumer – Attitudes towards Savings and Investment Advice
-
-
- Figure 73: Agreement with statements about savings and investment advice, by gender, age, lifestage and marital status, December 2008
-
- Figure 74: Agreement with statements about savings and investment advice, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 75: Agreement with statements about savings and investment advice, by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
Appendix – The Consumer – Saving and Investment Behaviour
-
-
- Figure 76: Statements relating to savings and investing behaviour, by gender, age, lifestage and marital status, December 2008
-
- Figure 77: Statements relating to savings and investing behaviour, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 78: Statements relating to savings and investing behaviour, by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
- Figure 79: Statements relating to savings and investing attitudes, by gender, age, lifestage and marital status, December 2008
-
- Figure 80: Statements relating to savings and investing attitudes, by socio-economic group, gross annual household income, household tenure and working status, December 2008
-
- Figure 81: Statements relating to savings and investing attitudes, by internet access, internet frequency, web use, newspaper readership and education, December 2008
-
Back to top