Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The Market
- Retail savings balances have marginally increased
- Some scope for growth in the coming years
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- Figure 1: Forecast of outstanding retail savings balances, 2005-15
- Short-term savings top the list of financial priorities for 2011
- Market Factors
- Saving intentions will face financial realities
- Worried consumers will sit and wait
- Surge in online banking registrations at major retail banks
- Companies, Brands and Innovation
- Santander stands out from the crowd
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- Figure 2: Attitudes towards and usage of deposit and savings account brands, January 2011
- Share of Big Six remains relatively unchanged
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- Figure 3: Proportion of savers holding an account with the leading players, February 2011
- Adspend grew in 2010 and 2011 will be a competitive year
- The Consumer
- Savings accounts held by four fifths of the adult population
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- Figure 4: Consumers without any savings, by age, February 2011
- Climbing the savings ladder
- Better to save, or to clear debts?
- Security, retirement, and education
- What we think
Issues in the Market
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- What is currently motivating people to save?
- How are price comparison sites affecting the market?
- Are low interest rates stopping people from saving?
- How can different consumer groups be tempted to increase savings?
Future Opportunities
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- Proving credentials in the savings market
- Certainty in an uncertain world
Internal Market Environment
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- Key points
- Savings ratio still up on pre-recession levels...
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- Figure 5: Household saving ratio (% of Post Tax Income), seasonally adjusted, 2006-10
- ... but is forecast to remain flat in 2011
- Reduced household incomes affect savings ability
- Low base rate hits savings for millions
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- Figure 6: bank of England base rate, end of quarter, Q1 1975-Q4 2010
- …and are hitting margins
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- Figure 7: Average monthly quoted deposit interest rates at banks and building societies, January 2004-January 2011
- Short-term savings top the list of financial priorities for 2011…
- …but fixed term accounts are tempting many
- Consumers’ intentions... and reality
- Market still ruled by confusing number of products
- Interest in ISAs at new high
- Relaunch of inflation-beating NS&I bonds
- Further changes
- New ISA transfer times
Broader Market Environment
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- Key points
- UK households are still concerned with paying off debt
- Fourth quarter GDP figures show negative growth
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- Figure 8: GDP quarterly percentage change, Q1 2004-Q4 2010
- Unemployment falls back in February, but remains high
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- Figure 9: Unemployment rate, UK, January 2000-February 2011
- UK consumer confidence at alarming low
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- Figure 10: Gfk NOP Consumer Confidence Index, January 1988-February 2011
- UK’s aging population means fewer people actively saving
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- Figure 11: Trends in the age structure of the UK population, 2005-15
- Prosperity increasing in the long term
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- Figure 12: Forecast adult population trends, by socio-economic group, 2005-15
- Improved consumer advice needed
- Rebuilding retail banking at times of turmoil – a golden opportunity?
- An advice gap opening
Competitive Context
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- Key points
- Healthy rise in ISA deposits in 2010
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- Figure 13: ISA sales, by type of ISA, 2003/04-2009/10
- Call for investment as stock market grows
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- Figure 14: FTSE-100 Index, end of month, January 1994-January 2011
- Current account balances forecast to grow further
SWOT Analysis
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- Figure 15: Deposit and savings accounts – SWOT Analysis, 2011
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Who’s Innovating?
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- Key points
- A new way of banking emerges after the recession
- NatWest makes a play to become a consumer champion
- ... and others are following
- Supermarkets have entered the fixed bonds market
Market Size and Forecast
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- Key points
- Retail savings balances have marginally increased
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- Figure 16: Retail savings balances outstanding, 2003-10
- Compared to previous years’ growth, savings are flat in 2010
- People focusing on paying off debt rather than saving
- Banks and building societies battle for top online savings rates
- Consumers shifting funds into notice accounts
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- Figure 17: Number and value of individual interest-bearing sight and time accounts (MBBG* only), 2003-09
- Ever more money being put away in ISAs
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- Figure 18: Number of cash ISA* accounts and the value of gross subscriptions, by tax year, 2002/03-2009/10
- Building societies recover strongly in 2010
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- Figure 19: Cash ISA balances outstanding, 2003-10
- Forecast
- Savings balances should return to growth…
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- Figure 20: Forecast of outstanding retail savings balances, 2005-15
- …but in real terms, values will see little change
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- Figure 21: Forecast of outstanding retail savings balances, 2005-15
- Forecast methodology
Market Share
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- Key points
- Lloyds banking group dominates the savings market
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- Figure 22: Savings account ownership, by provider, February 2011
Companies and Products
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- Barclays
- HSBC
- Lloyds Banking Group
- Nationwide
- RBS Group
- Santander
Brand Communication and Promotion
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- Key points
- In 2010, adspend grew, and 2011 will be a competitive year
- Surge in cash ISAs represents a shift in mindset.
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- Figure 23: Total savings adspend, segmented by minor brand category, 2007-08/2009-10
- The big banks continue to dominate when it comes to savings adspend...
- ... but building societies have entered the race
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- Figure 24: Top 20 advertisers in savings, 2006-07/2009-10
- Press and TV represent two biggest categories of savings adspend
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- Figure 25: Total adspend on savings by media type, 2006-07/2009-10
Brand Research
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- Brand map
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- Figure 26: Attitudes towards and usage of deposit and savings account brands, January 2011
- Brand attitudes
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- Figure 27: Attitudes by deposit and savings account brand, January 2011
- Brand personality
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- Figure 28: Deposit and savings account brand personality – macro image, January 2011
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- Figure 29: Deposit and savings account brand personality – micro image, January 2011
- Correspondence analysis
- Brand experience
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- Figure 30: Deposit and savings account brand usage, January 2011
- Figure 31: Satisfaction with various deposit and savings account brands, January 2011
- Brand consideration
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- Figure 32: Consideration of deposit and savings account brands, January 2011
- Brand momentum
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- Figure 33: Consumer perceptions of current deposit and savings account brand performance, January 2011
- Net promoter score
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- Figure 34: Deposit and savings account brand recommendation – Net Promoter Score, January 2011
- Brand index
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- Figure 35: Deposit and savings account brand index, January 2011
- Figure 36: Deposit and savings account brand index vs. recommendation, January 2011
- Target group analysis
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- Figure 37: Target groups, January 2011
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- Figure 38: Deposit and savings account brand usage, by target groups, January 2011
- Group One – The Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – The Individualists
Channels to Market
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- Key points
- 2011 should see fewer bank closures than in previous years
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- Figure 39: UK bank and building society combined branch networks, 1998-2009
- Surge in online banking registrations at major retail banks
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- Figure 40: Number of personal customers registered to access accounts by telephone and computer (MBBG only), 2002-09
- Key points
- Four in five have some form of savings
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- Figure 41: Savings product ownership, February 2011
- Young adults are savings-deprived
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- Figure 42: Consumers without any savings, by age, February 2011
- Figure 43: Consumers without any savings, by annual household income, February 2011
- All age groups equally likely to have cash-based investment
- Older, wealthier consumers taking advantage of the stock market
- Lower incomes invest in savings with instant access
- Premium Bonds – it could be you
- Saving among singles
- The ‘big six’ continue to dominate
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- Figure 44: Companies with which savings accounts are held, February 2011
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- Figure 45: Companies with which savings accounts are held, by demographics, February 2011
Repertoire Analysis
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- Key points
- Savings are embraced by the majority
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- Figure 46: Repertoire of financial product ownership, February 2011
- Married couples and high earners more likely to own multiple types of savings products
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- Figure 47: Repertoire of savings product ownership, by demographics, February 2011
- Saving generally begins with an instant access account…
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- Figure 48: Savings product ownership, by repertoire of savings product ownership, February 2011
- … followed by a cash ISA
- NS&I products suit a variety of needs and demographic groups
- Locking assets away and investing with risk reserved for those with a variety of savings products
- Santander attracting those with a wide range of holdings
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- Figure 49: Market position of the ‘big six’, by repertoire of savings product ownership, February 2011
- Owners of five or more types of product more likely to be saving for emotional security
Attitudes Towards Saving
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- Key points
- One quarter are paying off debts/mortgage…
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- Figure 50: Attitudes towards saving, February 2011
- ...but the same proportion hope to boost their savings
- Inertia still a powerful force in the market
- The scope to shift savings online
- Young adults eager to save
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- Figure 51: Attitudes towards saving, by demographics, February 2011
- High earners looking to add to their savings...
- ...but others are struggling to find spare cash
- Interest rates are a non-issue for many
- Over-55s and high earners are most likely to chase rates
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- Figure 52: Attitudes towards online management of savings, researching and moving savings to obtain best rates, by age, February 2011
- Figure 53: Attitudes towards online management of savings, researching and moving savings to obtain best rates, by socio-economic group, February 2011
- Online banking does not necessarily translate to frequent switching
- Apathy amongst consumers without savings
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- Figure 54: Attitudes towards saving, by consumers without savings, February 2011
- Price comparison sites popular amongst stock market investors
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- Figure 55: Attitudes towards online management of savings, researching and moving savings to obtain best rates, by type of savings product owned, February 2011
- Aggregators could be key to winning fixed-rate business
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- Figure 56: Attitudes towards online management of savings, researching and moving savings to obtain best rates, by type of cash savings product owned, February 2011
- Nationwide and Santander are the choice of the financially savvy
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- Figure 57: Attitudes towards savings, by companies with which savings accounts are held, February 2011
- Consumers are adding to their emergency funds in 2011
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- Figure 58: Motivations for planning to increase savings over the next year, February 2011
Motivations for Saving and Investing
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- Key points
- Household bills and emergencies top savings priorities
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- Figure 59: Motivations for saving, February 2011
- Young adults save for major events and house deposits
- Wealthy consumers have adequate pensions and save for emotional security
- Education costs set to be prioritised amongst middle and higher income families
- Low earners saving to pay regular bills
- Taking the long-term view
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- Figure 60: Motivations for saving, by product ownership, February 2011
- Consumers with locked away assets have multiple savings priorities
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- Figure 61: Motivations for saving, by cash-based savings ownership, February 2011
- Big ticket purchasers likely to be the most driven savers in 2011
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- Figure 62: Motivations for saving, by attitudes towards saving, February 2011
Target Groups
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- Key points
- Motivated, or apathetic?
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- Figure 63: Savings product target groups, February 2011
- Household expenses dominated
- Savings profile
- Demographics
- Consumer behaviour insight
- Debt/mortgage repayers
- Savings profile
- Demographics
- Consumer behaviour insight
- Financially comfortable savers
- Savings profile
- Demographics
- Consumer behaviour insight
- Highly motivated savers
- Savings profile
- Demographics
- Consumer behaviour insight
Appendix – Product Ownership
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- Figure 64: Most popular financial product ownership, by demographics, February 2011
- Figure 65: Next most popular financial product ownership by demographics, February 2011
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- Figure 66: Other financial product ownership, by demographics, February 2011
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Appendix – Repertoire Analysis
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- Figure 67: Repertoire of financial product ownership, by demographics, February 2011
- Figure 68: Repertoire of financial product ownership, by demographics, February 2011
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Appendix – Attitudes Towards Saving
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- Figure 69: Most popular savings behaviour, by demographics, February 2011
- Figure 70: Next most popular savings behaviour, by demographics, February 2011
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Appendix – Motivations for Saving and Investing
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- Figure 71: Most popular motivations for saving, by demographics, February 2011
- Figure 72: Next most popular motivations for saving, by demographics, February 2011
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Appendix – Target Groups
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- Figure 73: Target groups, by demographics, February 2011
- Figure 74: Savings behaviour, by target groups, February 2011
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- Figure 75: Motivations for saving, by target groups, February 2011
- Figure 76: Financial product ownership, by target groups, February 2011
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