Table of Contents
Executive Summary
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- The market
- Steady growth trend is forecast to continue
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- Figure 1: Forecast of retail savings balances, fan chart at current prices, 2008-18
- Retail deposits increased by nearly 4% in 2013
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- Figure 2: Total value of retail savings balances from households, 2008-13
- Cash ISA subscriptions back on the rise
- Market factors
- Rates of return continue to act as a disincentive to save….
- …but gap between inflation and wage growth is narrowing
- Companies, brands and innovation
- Largest providers of savings accounts
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- Figure 3: Providers’ market share based on total retail savings balances, shown on a group basis, UK, 2013
- Online banking channels are the preferred channel
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- Figure 4: Activities relating to savings, by channel preference, January 2014
- Sharp decline in industry adspend continues in 2013
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- Figure 5: Total advertising expenditure on cash savings products, 2009-13
- The consumer
- Over two fifths with savings have less than £20,000
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- Figure 6: Value of savings and investments, January 2014
- Easy-access accounts among the most popular savings products
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- Figure 7: Ownership of savings accounts, January 2014
- Just over a quarter of non-savers expect to start saving
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- Figure 8: Future savings expectations, January 2014
- Less positive outlook for non-savers
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- Figure 9: Future savings expectations, January 2014
- Interest rate is a priority when choosing savings products
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- Figure 10: Influential factors for savings product uptake, January 2014
- Nearly two thirds of savings account holders tend to keep extra money in their current account
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- Figure 11: Saving habits using current accounts, January 2014
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- Figure 12: Attitudes towards saving in a current account, January 2014
- What we think
Issues and Insights
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- Consumers are not driven entirely by interest rates anymore
- The facts
- The implications
- Competitive current accounts challenge easy-access savings accounts
- The facts
- The implications
- Move towards scrapping ‘teaser rates’ and rewarding customer loyalty
- The facts
- The implications
Trend Application
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- Savings providers can ‘nudge’ consumers into saving
- Helping people feel protected
- The next generation of savers
Regulation in the Savings Market
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- Key points
- Budget 2014 reveals support for savers
- Introduction of CASS has turned all eyes on current accounts
- FCA to investigate savings market
- Funding for Lending Scheme has harmed savers
Market Drivers
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- Key points
- Low base rate and high inflation continue
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- Figure 13: Average annual changes in the RPI, CPI and Bank of England base rate, UK, 2005-13
- Rates of return continue to suffer
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- Figure 14: Average monthly quoted branch-based deposit interest rates, January 2007-February 2014
- Savings ratio slips in 2013
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- Figure 15: Gross household savings and savings ratio, seasonally adjusted and at current prices, UK, 2002-13
- Gap between inflation and wage growth is narrowing
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- Figure 16: Monthly change in RPI and average weekly earnings, January 2009-January 2014
- Consumer sentiment on an upward trend…
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- Figure 17: GfK Consumer confidence barometer – UK, January 1994-February 2014
- Figure 18: Spending and saving confidence, March 2001-December 2013*
- …but many continue to feel under financial pressure
Competitor Products
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- Key points
- Cash ISA subscriptions back on the rise
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- Figure 19: Value of new ISA subscriptions, 2007/08-2012/13
- Product innovation in the current account market renders struggle for saving accounts
- Equity-based investments remain far behind in popularity
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- Figure 20: Ownership of savings and investments, by asset type, November 2013
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- Figure 21: Ownership of savings and investments, November 2013
Who’s Innovating?
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- Key points
- Current account landscape reduces incentive to innovate
- New savings accounts emerge from challenger banks
- FirstSave launches three competitive fixed-rate online savings accounts
- Aldermore lets business customers customise their terms
- Providers look to simplify their savings product range
- Technology assists with promoting savings
Market Size and Forecast
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- Key points
- Retail deposits increased by nearly 4% in 2013
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- Figure 22: Retail savings balances from households, by sector, 2004-13
- Money flowing into sight accounts as savers look towards packaged current accounts
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- Figure 23: Volume and value of individual interest-bearing current and deposit accounts (MBBGs only), 2004-12
- Five-year forecast of the value of retail deposits
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- Figure 24: Forecast of retail savings balances, fan chart at current prices, 2008-18
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- Figure 25: Forecast of total retail savings balances, 2008-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Lloyds Banking Group holds the top position based on overall retail savings balances
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- Figure 26: Providers’ total retail savings balances, shown on a group basis – UK, 2012-13
- Halifax, Barclays and Nationwide are the market leaders in the retail savings account market
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- Figure 27: Ranking of the largest providers of savings accounts, by proportion of customers, January 2014
Companies and Products
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- Lloyds Banking Group
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 28: Key annual financial data for Lloyds Banking Group, 2012 and 2013
- Brand positioning and strategy
- Recent activity
- Barclays
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 29: Key annual financial data for Barclays Plc, 2012 and 2013
- Brand positioning and strategy
- Recent activity
- Nationwide
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 30: Key interim financial data for Nationwide Building society, H1 2012 and H1 2013
- Brand positioning and strategy
- Recent activity
- HSBC
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 31: Key annual financial data for HSBC Bank Plc, 2012 and 2013
- Brand positioning and strategy
- Recent activity
- Santander
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 32: Key annual financial data for Santander UK, 2012 and 2013
- Brand positioning and strategy
- Recent activity
- RBS Group
- Company description
- Ranking in the retail savings market
- Savings product range
- Distribution mix
- Recent financial performance
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- Figure 33: Key annual financial data for RBS Group, 2012-13
- Brand positioning and strategy
- Recent activity
Brand Communication and Promotion
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- Key points
- Sharp decline in industry adspend continues in 2013
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- Figure 34: Total advertising expenditure on cash savings products, 2009-13
- Instant-access accounts suffer greatest decline in adspend
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- Figure 35: Total advertising expenditure on cash savings products, by product type, 2009-13
- Halifax holds top position as highest spending advertiser in the savings account market
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- Figure 36: Top ten advertisers of savings accounts (excluding cash ISAs), 2011-13
- Barclays top advertiser of cash ISAs
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- Figure 37: Top ten advertisers of cash ISAs, 2011-13
- A note on adspend
Channels to Market
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- Key points
- Online banking channels are preferred…
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- Figure 38: Activities relating to savings, by channel preference, January 2014
- …even among older age groups
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- Figure 39: Activities relating to savings by channel preference, by age, January 2014
- Mobile banking should pick up even more in the coming years
- Many consumers still use branches
- Decline in the UK branch network is speeding up
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- Figure 40: UK bank and building society branch networks, 2003-12
- Balancing ‘bricks and clicks’ may be the best way forward
Value of Savings and Investments
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- Key points
- Survey background
- Over two fifths with savings below £20,000
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- Figure 41: Value of savings and investments, January 2013 and January 2014
- Higher earners most likely to have savings worth more than £50,000
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- Figure 42: Value of savings and investments, by gross annual household income, January 2014
- Older adults more likely to have a higher level of savings
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- Figure 43: Value of savings and investments, by gender and age, January 2014
- Young savers create opportunities in the savings market
- Gender gap in the value of savings
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- Figure 44: Value of savings and investments, by gender and age, January 2014
Ownership of Savings Products
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- Key points
- Easy-access accounts among the most popular savings products
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- Figure 45: Ownership of savings accounts, January 2014
- Regular savings accounts tend to appeal to the younger adult savers…
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- Figure 46: Ownership of savings accounts, by age, January 2014
- …while fixed-term and tax-exempt savings products appeal to those with high value of savings
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- Figure 47: Ownership of savings accounts, by value of savings and investments, January 2014
- Over half of adult savers have multiple savings products
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- Figure 48: Number of savings product types held, January 2014
- Figure 49: Ownership of savings products, by number of savings product types held, January 2014
- Higher-income households more likely to own more product types
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- Figure 50: Number of savings product types held, by gross annual household incomes, January 2014
Future Savings Expectations
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- Key points
- Just over a quarter of non-savers expect to start saving
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- Figure 51: Future savings expectations, January 2014
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- Figure 52: Future savings expectations, January 2014
- Young savers are confident about the next six months
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- Figure 53: Future savings expectations, by age, January 2014
- Regular savings account holders most likely to increase their savings
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- Figure 54: Future savings expectations, by ownership of savings accounts, January 2014
Influential Factors for Savings Product Uptake
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- Key points
- Interest rate is a priority when choosing savings products
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- Figure 55: Influential factors for savings product uptake, January 2014
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- Figure 56: Influential factors for savings product uptake, January 2014
- Consumers also on the look-out for loyalty rewards
- Online access more important than branch access
- FSCS protection is a main concern for those with higher value savings
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- Figure 57: Influential factors for savings product uptake, by value of savings and investments, January 2014
Saving Habits Using Current Accounts
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- Key points
- Nearly two thirds of savings account holders tend to keep extra money in their current account
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- Figure 58: Saving habits using current accounts, January 2014
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- Figure 59: Attitudes towards saving in a current account, January 2014
- Consumer inertia may also be a factor
- Competitive interest rates on current accounts stand in the way of saving accounts
Appendix – Market Drivers
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- Figure 60: Real households’ disposable income, 2002-13
- Figure 61: Trends in current financial situation compared to a year ago, January 2012-14
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Appendix – Competitor Products
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- Figure 62: Volume and value of ISA subscriptions, by type of ISA, 2007/08-2012/13
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Appendix – Market Size and Forecast
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- Figure 63: Total market forecast, best- and worst-case scenarios
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Appendix – Channels to Market
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- Figure 64: UK bank and building society branch networks, 2002-12
- Details on providers’ branch networks
- Lloyds Banking Group
- Santander UK
- Barclays
- RBS Group
- HSBC
- Consumer data on preferences for retail banking channels
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- Figure 65: Preferences for retail banking channels, by ownership of different types of savings accounts, January 2014
- Figure 66: Preferences for retail banking channels – Researching a savings product, by demographics, January 2014
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- Figure 67: Preferences for retail banking channels – Applying for a savings product, by demographics, January 2014
- Figure 68: Preferences for retail banking channels – Checking your savings balance, by demographics, January 2014
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- Figure 69: Preferences for retail banking channels – Transferring money between accounts, by demographics, January 2014
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Appendix – Value of Savings and Investments
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- Figure 70: Value of savings and investments, by demographics, January 2014
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- Figure 71: Value of savings and investments, by demographics, January 2014 (continued)
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Appendix – Ownership of Savings Products
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- Figure 72: Ownership of savings accounts, by demographics, January 2014
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- Figure 73: Ownership of savings accounts, by demographics, January 2014 (continued)
- Figure 74: Ownership of savings accounts, by demographics, January 2014 (continued)
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- Figure 75: Number of savings product types held, by demographics, January 2014
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Appendix – Future Savings Expectations
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- Figure 76: Future savings expectations of individuals with savings and/or investments, by demographics, January 2014
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- Figure 77: Future savings expectations of individuals with no savings or investments, by demographics, January 2014
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Appendix – Influential Factors for Savings Product Uptake
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- Figure 78: Influential factors for savings product uptake, by demographics, January 2014
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- Figure 79: Influential factors for savings product uptake, by demographics, January 2014 (continued)
- Figure 80: Influential factors for savings product uptake – Rank 1, by demographics, January 2014
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- Figure 81: Influential factors for savings product uptake – Rank 1, by demographics, January 2014 (continued)
- Figure 82: Influential factors for savings product uptake – Rank 2, by demographics, January 2014
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- Figure 83: Influential factors for savings product uptake – Rank 2, by demographics, January 2014 (continued)
- Figure 84: Influential factors for savings product uptake – Rank 3, by demographics, January 2014
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- Figure 85: Influential factors for savings product uptake – Rank 3, by demographics, January 2014 (continued)
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Appendix – Saving Habits Using Current Accounts
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- Figure 86: Saving habits using current accounts, by demographics, January 2014
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- Figure 87: Attitudes towards saving in a current account, by demographics, January 2014
- Figure 88: Attitudes towards saving in a current account, by demographics, January 2014 (continued)
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