Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- Retail savings environment
- Retail savings deposits increased by 4% in 2013
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- Figure 1: Retail savings balances outstanding, by sector, 2004-13^
- Economic factors
- Recovery finally gaining traction
- Inflation still above target, putting pressure on household incomes
- Unemployment continues to fall
- BoE base rate remains at historical low
- FTSE 100 posts strong performance in 2013, and big things expected for the year ahead
- Consumer sentiment and confidence
- Consumer confidence reaches 2007 levels
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- Figure 2: UK consumer confidence, January 1989-December 2013
- Increase in the number of people who are feeling better-off
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- Figure 3: Financial situation compared to 12 months ago, November 2012 vs. November 2013
- The consumer
- Value of savings and investments
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- Figure 4: Value of savings and investments, November 2013
- Saving and investment portfolio
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- Figure 5: Saving and investment product ownership, November 2013
- Consumers’ savings contribution habits
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- Figure 6: Saving/investing habits and contributions, November 2013
- Saving and investing goals
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- Figure 7: Influential factors for saving and investing, November 2012 and 2013
- Importance of inflation
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- Figure 8: Consumer behaviour towards inflation in relation to saving and investment products, November 2013
- Influential factors
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- Figure 9: Important factors for choosing saving and investment products, November 2013
- Property as an investment
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- Figure 10: Consumer attitudes towards investment and housing, November 2013
- What we think
Issues and Insights
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- Is there scope to increase ownership of equities?
- The facts
- The implications
- Introductory bonuses or long-term average savings rates?
- The facts
- The implications
- Clear goals and targets is the key to establishing regular saving activity
- The facts
- The implications
- Helping consumers look beyond basic savings products
- The facts
- The implications
Trend Application
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- Top of the savers
- Instant access investments
- Mintel futures: Generation Next
Economic Background
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- Key points
- GDP set for highest rate of annualised growth since the recession
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- Figure 11: UK quarterly GDP growth, Q1 2006-Q3 2013
- Figure 12: Quarterly changes in the savings ratio*, 1998-Q3 2013
- Inflation is still having an impact on household finances and living standards
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- Figure 13: Monthly change in RPI and average weekly earnings, January 2007 – October 2013
- Unemployment rate on a downward trajectory
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- Figure 14: UK unemployment rate, seasonally adjusted, July 2008-September 2013
- Savings rates continue to suffer due to low BOE base rate
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- Figure 15: Average annual changes in the Bank of England base rate, CPI and RPI – UK January 2011-November 2013
- FTSE 100 performing well in 2013 as market optimism returns
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- Figure 16: FTSE 100 and FTSE All-share – daily index movements, January 2008-January 2014
Retail Savings and Investment Environment
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- Key points
- Retail savings balances increased by 4% in 2013
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- Figure 17: Retail savings balances outstanding, by sector, 2004-13^
- ISA subscriptions increased in 2012/13
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- Figure 18: Value of ISA sales, by type of ISA, 2007/08-2012/13
- Figure 19: Volume and value of ISA subscriptions, by type of ISA, 2007/08-2012/13
- Net and gross investment fund sales up by October 2013
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- Figure 20: Retail sales of unit trusts and OEICs – UK-domiciled, 2008-13
Consumer Confidence
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- Key points
- Consumer confidence up in 2013
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- Figure 21: UK consumer confidence, January 1989-December 2013
- Fewer people describe their financial situation as tight or struggling
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- Figure 22: Current financial situation, November 2012 vs. November 2013
- Increase in the percentage of people who are better-off
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- Figure 23: Financial situation compared to 12 months ago, November 2012 vs. November 2013
- Consumers are feeling more financially confident
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- Figure 24: Financial confidence, November 2012 vs. November 2013
Value of Savings and Investments
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- Key points
- One in two has less than £10,000 in savings and investments
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- Figure 25: Value of savings and investments, November 2013
- Older people tend to have a higher level of savings and investments
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- Figure 26: Value of savings and investments, by age, November 2013
- Higher earners most likely to value savings/investments over £50,000
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- Figure 27: Value of savings and investments, by gross annual household income, November 2013
- Homeowners tend to have a higher level of savings and investments
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- Figure 28: Value of savings and investments, by housing situation, November 2013
Saving and Investment Portfolio
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- Key points
- Risk-free and safe products lead the way…
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- Figure 29: Ownership of savings accounts/Cash ISAs versus equity-based investments, November 2013
- …but future intentions show there is scope to increase ownership of equity-based products
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- Figure 30: Saving and investment product ownership and planned ownership, November 2013
- Ownership of equities skewed towards men, over-55s and the affluent
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- Figure 31: Adults who do not own equity-based investments but plan on buying in the next year, by gender and age, November 2013
- Portfolio composition depends on investable assets
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- Figure 32: Saving and investment product ownership and planned ownership, by value of savings and investments, November 2013
Saving and Investment Contribution Habits
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- Key points
- A higher proportion save when they can rather than regularly
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- Figure 33: Saving/investing habits and contributions, November 2013
- Financial situation dictates ability to save
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- Figure 34: Adults who have saved in the past but have not managed to add to their savings/investments in the last 12 months, by current financial situation, November 2013
- Even those with portfolios over £50,000 have struggled to save in the last year
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- Figure 35: Saving/investing habits and contributions, by value of savings and investments, November 2013
Saving and Investing Goals
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- Key points
- Saving for unexpected events and security top consumer priorities
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- Figure 36: Influential factors for saving and investing, November 2012 and 2013
- Financial priorities dictate reasons for saving
- Saving for a home encourages for more methodical saving
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- Figure 37: Saving/investing habits and contributions, by influential factors for saving and investing, November 2013
- Figure 38: Saving/investing habits and contributions, by influential factors for saving and investing, November 2013 (continued)
- Long-term goals encourage ownership of equity-based products
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- Figure 39: Ownership of savings accounts/cash ISAs and equity-based products, by influential factors for saving and investing, November 2013
- Figure 40: Ownership of savings accounts/cash ISAs and equity-based products, by influential factors for saving and investing, November 2013 (continued)
Consideration of Inflation in Saving and Investing
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- Key points
- A third of adults do not consider inflation when choosing products
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- Figure 41: Consumer behaviour towards inflation in relation to saving and investment products, November 2013
- Inflation-conscious are more likely to hold equity-based products
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- Figure 42: Saving and investment product ownership and planned ownership, by consumer behaviour towards inflation in relation to saving and investment products, November 2013
- Adults with a higher level of savings more aware of impact of inflation
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- Figure 43: Consumer behaviour towards inflation in relation to saving and investment products, by value of savings and investment, November 2013
- Regular savers more likely to look at inflation when choosing products
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- Figure 44: Consumer behaviour towards inflation in relation to saving and investment products, by saving/investing habits and contributions, November 2013
Influential Factors when Choosing a Saving or Investment Product
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- Key points
- Instant access is the most important factor
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- Figure 45: Important factors for choosing saving and investment products, November 2013
- Taking a longer-term approach to introductory rates
- Adults with higher worth portfolios more likely to look for tax efficiency and FSCS coverage
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- Figure 46: Important factors for choosing saving and investment products, by value of savings and investments, November 2013
- Adults who invest in alternative products less concerned about access
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- Figure 47: Important factors for choosing saving and investment products, by saving and investment product ownership and planned ownership, November 2013
Property as an Investment
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- Key points
- A third feel it makes sense to overpay on a mortgage than to save elsewhere
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- Figure 48: Consumer attitudes towards investment and housing, November 2013
- A fifth of adults prefer bricks and mortar to equities
- Under 35s are more likely to view buying a home as an investment
Appendix – Value of Savings and Investments
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- Figure 49: Value of savings and investments, by demographics, November 2013
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- Figure 50: Value of savings and investment, by demographics, November 2013 (continued)
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Appendix – Saving and Investment Portfolio
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- Figure 51: Savings account/Cash ISA ownership and planned ownership, by demographics, November 2013
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- Figure 52: Savings account ownership and planned ownership, by demographics, November 2013
- Figure 53: Cash ISA ownership and planned ownership, by demographics, November 2013
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- Figure 54: Company pension ownership and planned ownership, by demographics, November 2013
- Figure 55: Personal pension ownership and planned ownership, by demographics, November 2013
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- Figure 56: Equity-based investments ownership and planned ownership, by demographics, November 2013
- Figure 57: NS&I (National Savings and Investments) products ownership and planned ownership, by demographics, November 2013
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- Figure 58: Stocks and shares ISA, by demographics ownership and planned ownership, November 2013
- Figure 59: Individual company shares ownership and planned ownership, by demographics, November 2013
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- Figure 60: With profits, unit-linked, money market, distribution or guaranteed investment bond ownership and planned ownership, by demographics, November 2013
- Figure 61: Investment property ownership and planned ownership, by demographics, November 2013
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- Figure 62: Investment trust ownership and planned ownership, by demographics, November 2013
- Figure 63: Unit trust/OEIC ownership and planned ownership, by demographics, November 2013
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- Figure 64: Other savings or investments ownership and planned ownership, by demographics, November 2013
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Appendix – Saving and Investment Contribution Habits
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- Figure 65: Saving/investing habits and contributions, by demographics, November 2013
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- Figure 66: Saving/investing habits and contributions, by demographics, November 2013 (continued)
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Appendix – Saving and Investing Goals
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- Figure 67: Most influential factors for saving and investing, by demographics, November 2013
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- Figure 68: Less influential factors for saving and investing, by demographics, November 2013
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Appendix – Consideration of Inflation in Saving and Investing
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- Figure 69: Consumer behaviour towards inflation in relation to saving and investment products, by demographics, November 2013
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Appendix – Influential Factors when Choosing a Saving or Investment Product
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- Figure 70: Most influential factors for choosing saving and investment products, by demographics, November 2013
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- Figure 71: Less important factors for choosing saving and investment products, by demographics, November 2013
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Appendix – Property as an Investment
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- Figure 72: Consumer attitudes towards investment and housing, by demographics, November 2013
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