Table of Contents
Introduction
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- Key themes in the report
- Data sources
- Definitions
- Abbreviations
Executive Summary
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- The market
- Value of outstanding loans down €14 billion between 2009 and 2014
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- Figure 1: Outstanding loans to households, consumer credit and other loans, IoI, NI & RoI, 2009-19
- Forecast
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- Figure 2: Indexed value of outstanding consumer credit and other loans, NI and RoI, 2009-19
- Market factors
- NI and RoI economies improving
- Consumers regaining confidence and optimism for future
- Cost of borrowing relatively low as a result of low interest rates
- Half of Irish consumers have no personal loan products outstanding
- Only minority of consumers are committed, organised and regular savers
- The consumer
- Just over half of consumers owe money on a personal loan product
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- Figure 3: Type of personal loan products that consumers currently owe money on, RoI and NI, July 2014
- Majority of personal loan products taken for one-off purchases or major expenses
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- Figure 4: Reason that consumers took out last personal loan product, RoI and NI, July 2014
- RoI consumers more open to borrowing in future than NI consumers
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- Figure 5: Whether consumers would take out a loan in the future for selected purposes, RoI and NI, July 2014
- RoI consumers more likely to return to the same lenders than NI
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- Figure 6: Agreement with statements relating to the last loan consumers took out, NI and RoI, July 2014
- What we think
Issues and Insights
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- What type of personal loan products do consumers own?
- The facts
- The implications
- Why do consumers borrow? And what would motivate them to borrow in the future?
- The facts
- The implications
- Where do consumers get personal loan products from?
- The facts
- The implications
Trend Application
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- Extend My Brand
- Prepare for the Worst
- Locavore
Market Overview
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- Key points
- Economic recovery now all but assured in RoI
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- Figure 7: Economic outlook, annual % change, RoI, 2012-15
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- Figure 8: Estimated unemployment levels, 2013-15
- Economic growth of 2.3% expected for NI in 2014
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- Figure 9: Economic outlook, NI, 2012-15
- Irish consumer sentiment more upbeat than in recent years
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- Figure 10: Consumer Sentiment, RoI, September 2010-August 2014
- Figure 11: Consumer confidence, NI, September 2008-June 2014
- Most consumers describe finances as either ‘healthy’ or ‘OK’
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- Figure 12: How consumers rate their current financial situation, NI and RoI, July 2014
- Debt write-offs down in NI, but set to increase in RoI
- Low interest rate environment keeping cost of borrowing down
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- Figure 13: Bank base interest rate, %, European Central Bank & Bank of England, 2008-14
- Cost of borrowing creeping upwards for RoI consumers
Competitive Context
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- Key points
- Almost half of all consumers have no personal loan products
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- Figure 14: Consumers that do not currently owe money on any personal loan product, by gender, NI and RoI, July 2014
- Consumers in full-time employment most likely to owe money on a loan
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- Figure 15: Consumers that do not currently owe money on any personal loan product, by work status, NI and RoI, July 2014
- Scant evidence of structured, committed saving among Irish consumers
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- Figure 16: Methods in which consumers contribute to their savings, NI and RoI, January 2014
Market Size and Forecast
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- Key points
- Outstanding loans to consumers down one third between 2009 and 2014
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- Figure 17: Outstanding loans to households, consumer credit and other loans, IoI, NI & RoI, 2009-19
- Value of outstanding loans expected to dip slightly between 2014-15
- Pre-recessionary heights not likely in foreseeable future
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- Figure 18: Indexed value of outstanding consumer credit and other loans, NI and RoI, 2009-19
Strengths and Weaknesses
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- Strengths
- Weaknesses
Companies and Innovations
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- Key points
- Innovations
- Barclays’ new mobile app allows customers to apply for a personal loan
- US company Kabbage to expand into the personal loan market
- Company profiles
- Allied Irish Bank (AIB) Group
- Bank of Ireland (BoI)
- Danske Bank
- Halifax
- HSBC
- Nationwide
- Permanent TSB
- Santander
- Ulster Bank
The Consumer – Ownership of Personal Loan Products
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- Key points
- More than half of consumers have a personal loan product
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- Figure 19: Type of personal loan products that consumers currently owe money on, RoI and NI, July 2014
- Older consumers least likely to owe money on personal loans
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- Figure 20: Consumers who do not currently owe money on any personal loan product, by age, RoI and NI, July 2014
- Credit union loan most popular in RoI, but far less so in NI
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- Figure 21: Consumers who currently owe money on a loan from credit union, by age, RoI, July 2014
- Credit union loans more popular among C2DEFs than among ABC1s
- Non-mainstream providers fill the ‘credit union gap’ in NI
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- Figure 22: Selected personal loan products that consumers currently owe money on, RoI and NI, July 2014
- Overdrafts most popular loan type in NI, second in RoI
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- Figure 23: Consumers who currently owe money on a current account overdraft facility, by age, RoI and NI, July 2014
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- Figure 24: Consumers who currently owe money on a current account overdraft facility, by work status, RoI and NI, July 2014
- Overdrafts are good short-term solution, but may not offer the best value to consumers
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- Figure 25: Annual average retail interest rates on overdraft facilities, UK (including NI) and RoI, 2009-14
- Free overdraft facilities more common in NI than in RoI
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- Figure 26: If consumers who use a current account overdraft facility pay for this facility, RoI and NI, July 2014
- 35-44s most likely to have outstanding personal loans
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- Figure 27: Consumers who currently owe money on a personal loan (eg from a bank), by age, RoI and NI, July 2014
The Consumer – Reasons for Last Loan Ownership
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- Key points
- Most loans taken for one-off purchases or major expenses
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- Figure 28: Reason that consumers took out last personal loan product, RoI and NI, July 2014
- Significant minority borrow to ease financial stress
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- Figure 29: Consumers who borrowed money for financial reasons, RoI and NI, July 2014
- Little appetite for borrowing to finance lifestyle or non-essential buying
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- Figure 30: non-essential reasons that consumers took out last personal loan product for holiday, occasion or celebration, RoI and NI, July 2014
The Consumer – Reasons for Future Loan Ownership
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- Key points
- RoI consumers more open generally to borrowing than NI consumers
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- Figure 31: Whether consumers would take out a loan in the future for selected purposes, RoI and NI, July 2014
- Key difference is greater access to public education and healthcare in NI
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- Figure 32: What consumers would take out a loan for, RoI and NI, July 2014
- Half RoI and a third of NI consumers would borrow to buy a car
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- Figure 33: Consumers who would in future take out a loan to pay for a new car/vehicle, by age, RoI and NI, July 2014
- ABC1s and women most open to borrowing for education/qualifications
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- Figure 34: Consumers who would in future take out a loan to pay for selected education and training-related expenses, by gender and socio-economic background RoI and NI, July 2014
- 35-54 most likely to borrow for home improvements and large purchases
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- Figure 35: If consumers would in future take out a loan to pay for home improvements, by gender and age, RoI and NI, July 2014
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- Figure 36: If consumers would in future take out a loan to pay for a large purchase, by gender and age, RoI and NI, July 2014
- Borrowing for occasions and presents/celebrations appeals to young
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- Figure 37: Consumers who would in future take out a loan to pay for a special occasion, by age, RoI and NI, July 2014
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- Figure 38: Consumers who would in future take out a loan to pay for Christmas or birthday presents/celebrations, by age, RoI and NI, July 2014
- ABC1s in employment would borrow to consolidate existing debts
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- Figure 39: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by gender and socio-economic background and work status, RoI and NI, July 2014
- … whereas intent to borrow to make ends meet should set off alarm bells
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- Figure 40: If consumers would in future take out a loan to help make ends meet, by work status and age, RoI and NI, July 2014
The Consumer – Attitudes towards Personal Loan Products
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- Key points
- Familiarity, existing relationship key factors when taking loan in RoI
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- Figure 41: Agreement with statements relating to the last loan consumers took out, NI and RoI, July 2014
- Only quarter of RoI, and a fifth of NI consumers borrowed from their main bank
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- Figure 42: Agreement with the statement ‘I took the loan out with my main bank’, by gender, NI and RoI, July 2014
- Only small minority undertook online research before taking loan
- Majority of consumers handling loan repayments comfortably
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- Figure 43: Consumers who agree ‘I have struggled to make loan repayments in the last 12 months’, by socio-economic background, NI and RoI, July 2014
Appendix
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- NI Toluna tables
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- Figure 44: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014
- Figure 45: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014 (continued)
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- Figure 46: Types of personal loan products that consumers currently owe money on, by demographics, NI, July 2014 (continued)
- Figure 47: If consumers using current account overdraft facilities pay for their overdraft facility, by demographics, NI, July 2014
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- Figure 48: Reason that consumers took out last personal loan product, by demographics, NI, July 2014
- Figure 49: Reason that consumers took out last personal loan product, by demographics, NI, July 2014 (continued)
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- Figure 50: Reason that consumers took out last personal loan product, by demographics, NI, July 2014 (continued)
- Figure 51: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by demographics, NI, July 2014
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- Figure 52: If consumers would in future take out a loan to pay for a new car/vehicle, by demographics, NI, July 2014
- Figure 53: If consumers would in future take out a loan to pay for home improvements, by demographics, NI, July 2014
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- Figure 54: If consumers would in future take out a loan to pay for a large purchase, by demographics, NI, July 2014
- Figure 55: If consumers would in future take out a loan to pay for a holiday, by demographics, NI, July 2014
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- Figure 56: If consumers would in future take out a loan to pay for a special occasion, by demographics, NI, July 2014
- Figure 57: If consumers would in future take out a loan to pay child/children’s education, by demographics, NI, July 2014
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- Figure 58: If consumers would in future take out a loan to help make ends meet, by demographics, NI, July 2014
- Figure 59: If consumers would in future take out a loan to pay for qualifications/training, by demographics, NI, July 2014
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- Figure 60: If consumers would in future take out a loan to pay for education expenses, by demographics, NI, July 2014
- Figure 61: If consumers would in future take out a loan to pay for medical expenses, by demographics, NI, July 2014
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- Figure 62: If consumers would in future take out a loan to help a family member out, by demographics, NI, July 2014
- Figure 63: If consumers would in future take out a loan to pay for Christmas or birthday presents/celebrations, by demographics, NI, July 2014
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- Figure 64: Agreement with statements relating to the last loan consumers took out, by demographics, NI, July 2014
- Figure 65: Agreement with statements relating to the last loan consumers took out, by demographics, NI, July 2014 (continued)
- RoI Toluna tables
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- Figure 66: Types of personal loan products that consumers currently owe money on, by demographics, RoI, July 2014
- Figure 67: Types of personal loan products that consumers currently owe money on, by demographics, RoI, July 2014 (continued)
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- Figure 68: If consumers using current account overdraft facilities pay for their overdraft facility, by demographics, RoI, July 2014
- Figure 69: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014
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- Figure 70: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014 (continued)
- Figure 71: Reason that consumers took out last personal loan product, by demographics, RoI, July 2014 (continued)
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- Figure 72: If consumers would in future take out a loan to consolidate debts/pay off other credit products, by demographics, RoI, July 2014
- Figure 73: If consumers would in future take out a loan to pay for a new car/vehicle, by demographics, RoI, July 2014
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- Figure 74: If consumers would in future take out a loan to pay for home improvements, by demographics, RoI, July 2014
- Figure 75: If consumers would in future take out a loan to pay for a large purchase, by demographics, RoI, July 2014
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- Figure 76: If consumers would in future take out a loan to pay for a holiday, by demographics, RoI, July 2014
- Figure 77: If consumers would in future take out a loan to pay for a special occasion, by demographics, RoI, July 2014
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- Figure 78: If consumers would in future take out a loan to pay child/children’s education, by demographics, RoI, July 2014
- Figure 79: If consumers would in future take out a loan to help make ends meet, by demographics, RoI, July 2014
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- Figure 80: If consumers would in future take out a loan to pay for qualifications/training, by demographics, RoI, July 2014
- Figure 81: If consumers would in future take out a loan to pay for education expenses, by demographics, RoI, July 2014
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- Figure 82: If consumers would in future take out a loan to pay for medical expenses, by demographics, RoI, July 2014
- Figure 83: If consumers would in future take out a loan to help a family member out, by demographics, RoI, July 2014
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- Figure 84: If consumers would in future take out a loan to pay for Christmas or birthday presents/celebrations, by demographics, RoI, July 2014
- Figure 85: Agreement with statements relating to the last loan consumers took out, by demographics, RoI, July 2014
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- Figure 86: Agreement with statements relating to the last loan consumers took out, by demographics, RoI, July 2014 (continued)
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