Table of Contents
Issues in the Market
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- Key issues covered in the report
- Market definitions
- Abbreviations
Future Opportunities
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- My life, my legacy
- The frequent flier ISA
Market in Brief
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- ISA ownership continues to grow
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- Figure 1: Product ownership, April 2010
- ISA subscriptions reached £45 billion in 2009/10
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- Figure 2: Number of ISA accounts and amounts subscribed, 1999/2000-2009/10*
- Savings activity increases
- New industry developments
- Provider rankings
- ISA product ownership
- Attitudes towards ISAs
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- Figure 3: Attitudes towards ISAs, April 2010
- Reasons for saving and investment
Internal Market Environment
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- Key points
- Recent changes to simplify the scheme
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- Figure 4: Recent and proposed changes to the ISA scheme - UK, 2004-20
- Industry welcomes increase in ISA limits
- Consumer awareness remains a barrier in the investment sector
- Limit increase provides a boost to ISA activity
- New scheme structure 2009/10 v 20010/11
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- Figure 5: Illustration of annual investment limits, 2009/10 v 2010/11
- How successful have ISAs been?
- Investment element continues to deter some savers
- OFT study forces cash ISA providers to change their ways
- FSA introduces new conduct of business rules
- Main draw of ISAs tax efficiency
- Change is on the way in the savings marketplace
Broader Market Environment
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- Key points
- Full economic recovery many years away
- Economic warning signs
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- Figure 6: UK consumer confidence, 2004-10
- Inflation erodes already low savings returns
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- Figure 7: Average annual changes in the bank base rate, CPI and RPI - UK, 2000-10*
- Recovery in stock market boosts investor sentiment
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- Figure 8: FTSE 100 and FTSE All Share – daily index movements, Jan 2000-Jun 2010
- More people are saving and repaying debt
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- Figure 9: UK savings ratio, 2000-10
- Uncertainty leads to a greater emphasis on saving
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- Figure 10: Savings Climate and Savings/Investment activity, Mar 2006-Jun-2010
- Falling numbers of higher rate taxpayers
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- Figure 11: Number of basic and higher-rate taxpayers, 1998/99-2010/11
- Slowdown in over-50s market
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- Figure 12: Size of the UK population, by age group, 2005-15
Competitive Context
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- Key points
- ISAs complement other savings and investment products
- Harmonisation between ISA and pension regimes?
- Cash-based ISAs lose their appeal as interest rates hit record lows
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- Figure 13: Average monthly quoted deposit interest rates at banks and building societies, January 2000-May 2010
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- Figure 14: Retail savings balances, by type, July 2008, July 2009 and June 2010
- Cash ISA share of retail funding grows
- The search for yield
Strengths and Weaknesses in the Market
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- Figure 15: ISAs – Strengths and weaknesses of the ISA market – 2010
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Who’s Innovating?
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- Key points
- ISA regulation restricts innovation
- Recent ISA advertising activity
- ISA season events drive product development and launches
- Inflation-beating cash ISA launched
- Innovation in corporate ISAs market
- More providers offer ISA wrapper with structured products
- Charity-linked ISA accounts emerge
- Broad array of investment funds available to retail investors
- Innovations/launches in the funds sector have been:
Market Size and Forecast
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- Key points
- ISA subscriptions rose by 12% in 2009/10
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- Figure 16: Number of ISA accounts and amounts subscribed, 1999/2000-2009/10*
- Value of stocks and shares ISA subscriptions best for nine years
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- Figure 17: Number of ISA accounts and amounts subscribed, segmented by type, 1999/2000-2009/10
- Average amounts subscribed at record levels in 2009/10
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- Figure 18: Average amounts subscribed per account, 1999/2000-2009/10*
- Surge in retail unit trust/OEIC sales; strong net ISA sales in H2 2010
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- Figure 19: Total net retail unit trust/OEIC sales and net retail ISA sales, 2005-10
- ISA market forecast
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- Figure 20: Forecast of new ISA business, segmented by cash and stocks and shares ISAs, 1999/00-2014/15
Value of ISA Funds
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- Key points
- £275 billion held in ISAs
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- Figure 21: Value of funds held in ISAs 2005-09
Market Share
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- Key points
- Banks have a 50% share of the ISA market
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- Figure 22: Where ISA is held, 2005-09*
- Building societies have around a 36% share of cash ISA balances
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- Figure 23: Cash ISA balances by provider, March 2010
- Lloyds Banking Group strengthens position in cash ISA market
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- Figure 24: Cash ISA leading groups, April 2009 and April 2010
- Leading ISA fund managers
- Fidelity tops ISA fund rankings
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- Figure 25: Top 15 unit trust/OEIC ISA fund managers, by value of funds under management, 2008-10
- Steady consolidation in ISA fund managers
Companies and Products
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- Major players
- Fidelity
- Grupo Santander
- Invesco Perpetual
- Legal & General
- Lloyds Banking Group
- Nationwide Building Society
- RBS Group
Channels to Market
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- Key points
- Cash ISA are sold directly
- Branch is most popular distribution channel
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- Figure 26: Distribution channels used for product purchase, September 2009
- Growth in financial DIY increasing use of non-advised channel
- Stocks and shares ISAs – the main routes to market
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- Figure 27: Gross retail sales of unit trusts and OEIC ISAs by distribution channel, 2005-09
- Fund supermarkets are increasingly dominant
- The leading fund platforms
- Platforms redrawing distribution map
Brand Elements
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- Key points
- Brand map
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- Figure 28: Attitudes towards and usage of ISA brands, April 2010
- Brand qualities of ISA brands
- NS&I seen as safest bet
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- Figure 29: Personalities of various ISA brands, April 2010
- Experience of ISA brands
- No brand dominates in ISAs
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- Figure 30: Consumer usage of various ISA brands, April 2010
- Brand consideration for ISA brands
- Progressive Santander has interest, Lloyds and Halifax avoided
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- Figure 31: Consideration of various ISA brands, April 2010
- Brand satisfaction for ISA brands
- HSBC and Nationwide strongest on satisfaction
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- Figure 32: Satisfaction with various ISA brands, June 2010
- Brand commitment to ISA brands
- NatWest and HSBC have highest loyalty
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- Figure 33: Commitment to various ISA brands, April 2010
- Brand intentions for ISA brands
- HSBC and Nationwide have biggest draws
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- Figure 34: Future usage intentions for various ISA brands, April 2010
- Brand recommendation for ISA brands
- Strong support for NatWest, HSBC and Santander
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- Figure 35: Recommendation of various ISA brands, April 2010
- Barclays
- What the consumer thinks
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- Figure 36: Attitudes towards the Barclays brand, April 2010
- Room for improvement
- Nationwide
- What the consumer thinks
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- Figure 37: Attitudes towards the Nationwide brand, April 2010
- Room for improvement
- HSBC
- What the consumer thinks
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- Figure 38: Attitudes towards the HSBC brand, April 2010
- Room for improvement
- Santander
- What the consumer thinks
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- Figure 39: Attitudes towards the Santander brand, April 2010
- Room for improvement
- National Savings & Investments (NS&I)
- What the consumer thinks
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- Figure 40: Attitudes towards the NS&I brand, April 2010
Brand Communication and Promotion
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- Key points
- Record level of ISA adspend
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- Figure 41: Total advertising expenditure on ISAs, by product category, 2005/06-2009/10
- Seasonal aspect of ISA market reflected in monthly adspend
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- Figure 42: Average monthly adspend on ISAs as a percentage of annual adspend, 2009
- Television preferred media channel for first time in over three years
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- Figure 43: Adspend on Cash ISAs, by media type, 2007/08-2009/10
- Press and direct mail dominate investment ISA adspend
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- Figure 44: Adspend on Investment ISAs, by media type, 2007/08-2009/10
- Santander top ISA adspend
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- Figure 45: Top 15 ISA advertisers, 2007/08-2009/10
Savings Product Ownership
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- Key points
- Note on consumer research
- Two fifths of adults hold an ISA
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- Figure 46: Product ownership, April 2010
- Generating income in a low-interest environment
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- Figure 47: Most popular product ownership, by demographics, April 2010
- Stock market investments still the preserve of high earners
- Knowledge is a vital commodity
- Over 55s – especially the retired – dominant force in cash savings market
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- Figure 48: Next most popular product ownership, by demographics, April 2010
- Will cash ISAs fill the gap left by the Child Trust Fund?
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- Figure 49: Other product ownership, by demographics, April 2010
- Some 14 million high and super savers
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- Figure 50: Repertoire of product ownership, April 2010
- Figure 51: Product ownership, by repertoire of product ownership, April 2010
- Around 19 million adults hold ISAs
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- Figure 52: Have ISA, 2005-09
- Easy access is the most widely held type of ISA
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- Figure 53: Types of ISA have, 2009
Cash ISA Market Share
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- Key points
- Halifax/Bank of Scotland leading cash ISA provider
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- Figure 54: Cash ISA account providers, April 2010*
Attitudes Towards ISAs, Savings and Investments
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- Key points
- Nearly three quarters of ISA holders aware of increased ISA allowances
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- Figure 55: Attitudes towards ISAs, April 2010
- Increased allowances boost the top end of the market
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- Figure 56: Most popular attitudes towards ISAs, by demographics, April 2010
- Income seekers are more likely to be aware of ISA changes
- Instant access accounts have wide-ranging appeal
- Confusion over ISA regulations
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- Figure 57: Next most popular attitudes towards ISAs, by demographics, April 2010
- The retirement hot spots
- Could the tabloids help increase awareness?
- Switched ISA providers
- Nationwide customers appear more to be ISA aware
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- Figure 58: Attitudes towards ISAs, by cash ISA account providers, April 2010
Motivation for Saving and Investing
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- Key points
- More than half of savers are preparing for a ‘rainy day’
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- Figure 59: Main reasons for saving or investing, April 2010
- Funding major purchases is a motivation across all lifestage groups
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- Figure 60: Top four main reasons for saving or investing, by lifestage, April 2010
- Promoting ISA tax benefits
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- Figure 61: Main reasons for saving or investing, by product ownership, April 2010
ISA Targeting Opportunities
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- Key points
- ISA target groups
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- Figure 62: ISA target groups, April 2010
- Cash specialists (64%)
- The ISA informed (16%)
- Heavy savers (19%)
- Half of the ISA informed have switched in the last two years
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- Figure 63: Attitudes towards ISAs, by target groups, April 2010
- Cash specialists
- ISA informed
- Heavy savers
- Tax benefits motivate the ISA Informed and Heavy Saver groups
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- Figure 64: Main reasons for saving or investing, by target groups, April 2010
- Cash Specialists
- ISA Informed
- Heavy Savers
- Product holdings vary between groups
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- Figure 65: Product ownership, by target groups, April 2010
Appendix – Savings Product Ownership
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- Figure 66: Most popular product ownership, by demographics, April 2010
- Figure 67: Next most popular product ownership, by demographics, April 2010
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- Figure 68: Other product ownership, by demographics, April 2010
- Figure 69: Repertoire of product ownership, by demographics April 2010
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Appendix – Cash ISA Market Share
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- Figure 70: Cash ISA account providers, by demographics, April 2010
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Appendix – Attitudes Towards ISAs, Savings and Investment
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- Figure 71: Most popular attitudes towards ISAs, by demographics, April 2010
- Figure 72: Next most popular attitudes towards ISAs, by demographics, April 2010
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Appendix – Motivation for Saving and Investing
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- Figure 73: Most popular main reasons for saving or investing, by demographcis, April 2010
- Figure 74: Next most popular main reasons for saving or investing, by demographcis, April 2010
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Appendix – ISA Targeting Opportunities
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- Figure 75: Target groups, by demographics, April 2010
- Figure 76: Cash ISA account providers, by target groups, April 2010
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