The UK deposit and savings account market continues its steady growth with a 4.4% increase in retail savings in 2014, reaching £1.28 trillion. While there is strong potential for a greater boost in savings, the improvements in the broader economy in 2014 are not reflected by a corresponding increase in consumer sentiment. Many moderate earners are still feeling the after-effects of the income squeeze, while much of the employment that has been created has been relatively insecure. This is further compounded by the all-time low interest rates, meaning that more investors have shifted their focus to equity-based products, such as stocks & shares ISAs.

The introduction of the Funding for Lending Scheme (FLS) in July 2012 and the Current Account Switch Service (CASS) in August 2013 have shifted providers’ focus away from their savings product range and towards their current account offerings. Attractive in-credit benefits offered by current accounts on the market continue to make it particularly challenging for savings products to compete as consumers show a tendency to keep extra money in their current accounts.

Many providers are concentrating on achieving a multi-channel approach through a number of digital innovations to combine online and mobile with face-to-face services delivered through the branch. This approach reflects customers’ changing preferences in how they choose to interact with their financial provider.

This report examines these trends and their implications for both providers and consumers. Drawing on a range of information sources, it provides a comprehensive overview of how the market is evolving, as well as providers’ competitive strategies. It also explores consumer saving behaviour, providing insight into savers’ attitudes and intentions by analysing the results of Mintel’s independently commissioned online consumer survey.

Report scope and definitions

The focus of this report is on retail deposit and savings accounts for the adult market. Reference is made to children’s savings accounts and tax-exempt cash ISAs, but these products are not covered extensively here. For more detailed coverage, please refer to ISAs – UK – September 2014 and Saving and Investing for Children – UK – April 2015.

There are various types of deposit and savings account available to UK consumers, which typically can be managed in-branch and/or online. The main ones are as follows:

  • Easy-access (or instant-access) savings account – the most widely available and commonly held; this type of account does not impose any restrictions on making withdrawals and provides either a variable interest rate or a fixed/guaranteed interest rate for an introductory period

  • Notice account – this is where the account holder must give a certain number of days’ notice before making a withdrawal so as not to lose any interest

  • Fixed-term/fixed-rate savings account or bond – offers a fixed rate for a fixed term, usually between one and five years

  • Regular savings account – where the account holder is required to make regular monthly payments (usually ranging from £25 to £250 or £500 a month) in return for a higher interest rate

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