Table of Contents
Executive summary
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- The market
- Mintel forecasts a steady growth in retail deposits over the next five years
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- Figure 1: Forecast of retail savings balances, fan chart at current prices, 2009-19
- Retail deposits reached a total of nearly £1.3 trillion in 2014
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- Figure 2: Total value of retail savings deposits from UK households and % change year on year, 2005-14
- Economic environment and market conditions
- Online beats all other channels in the savings market
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- Figure 3: Activities relating to savings, by channel preference, February 2015
- Key players
- Lloyds Banking Group reports the highest overall retail savings balances
- High street players continue to develop their multi-channel capabilities
- All eyes on current accounts
- Providers target loyalty through simplification
- The consumer
- Over one quarter have no savings or investments
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- Figure 4: Value of savings and investments, February 2015
- Easy-access savings accounts: the most popular savings product
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- Figure 5: Ownership of savings products, February 2015
- More than half of adult savers own multiple savings products
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- Figure 6: Number of saving product types held, February 2015
- Almost two fifths of savers expect to increase their savings
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- Figure 7: Savers’ future saving plans, February 2015
- Fewer than one in five non-savers expect to start saving
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- Figure 8: Non-savers’ future saving plans, February 2015
- Peace of mind and protection from the unexpected are the main reasons for saving
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- Figure 9: Reasons for saving, February 2015
- Consumer saving habits
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- Figure 10: Consumer saving habits, February 2015
- Savers’ engagement in the market
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- Figure 11: Savers’ interest in the market, February 2015
- 30% have switched savings accounts in the last year
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- Figure 12: Savers’ attitudes and switching behaviour, February 2015
Issues and insights
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- PFM apps have growth potential in the UK
- The facts
- The implications
- Low switching in the savings market gives banks the opportunity to compete on non-price factors
- The facts
- The implications
The Market – What you need to know
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- Retail deposits reached a total of nearly £1.3 trillion in 2014
- Market forecasts a steady growth in retail deposits over the next five years
- Gap between inflation and wage growth has disappeared…
- …but economic recovery will take time to feed through into consumer financial wellbeing
- Rates of return continue to suffer
- Equity-based products are becoming a more appealing option
- Online beats all other channels in the savings market
Market size and segmentation
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- Retail deposits reached a total of nearly £1.3 trillion in 2014
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- Figure 13: Total value of retail savings deposits from UK households and % change year on year, 2005-14
- Value of sight accounts is steadily increasing
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- Figure 14: Volume and value of individual interest-bearing Sterling accounts (high street retail banks only), 2009-13
Market forecast
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- Figure 15: Forecast of retail savings balances, fan chart at current prices, 2009-19
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- Figure 16: Forecast of total retail savings balances, 2009-19
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Economic environment
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- Gap between inflation and wage growth has disappeared
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- Figure 17: Monthly change in RPI and average weekly earnings (regular pay, excluding bonuses), January 2009-January 2015
- Economic recovery will take time to feed through into consumer financial wellbeing…
- …but consumer confidence edged upwards in January 2015
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- Figure 18: Financial confidence index, January 2009-15
- No major change in the savings ratio in 2014
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- Figure 19: Gross household savings and savings ratio, seasonally adjusted at current prices, 2004-14* (est)
Market conditions
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- Rates of return continue to suffer
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- Figure 20: Average monthly quoted interest rates of UK monetary financial institutions (excluding Central Bank), not seasonally adjusted, January 2011-15
- Equity-based products are becoming a more appealing option
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- Figure 21: Value of new adult ISA subscriptions, 2009/10 – 2013/14
- Budget 2015: New personal savings allowance and cash ISA flexibility
- FCA probe into the cash savings market
- NS&I Pensioner Bonds: a savings gift to the over-65s
Channels to market
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- Online beats all other channels in the savings market
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- Figure 22: Activities relating to savings, by channel preference, February 2015
- Providers increasingly promote digital channels
Key Players – What you need to know
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- Lloyds Banking Group reports the highest overall retail savings balances
- NS&I grew savings balances significantly in 2014
- Adspend on cash savings products down by 38% in 2014
- Greater focus on brand building in 2014
- High street players are embracing a multi-channel approach
- All eyes on current accounts
- Providers target loyalty
- A look towards their customers with disabilities
Market share
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- NS&I holds less than 10% of the savings market share
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- Figure 23: Retail savings balances from households and market share, by sector, 2010-14
- Lloyds Banking Group reports the highest overall retail savings balances
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- Figure 24: Big providers’ total retail savings balances, shown on a group basis – UK, 2013-14
- Lloyds Banking Group holds leading position in the easy-access savings account market
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- Figure 25: Ranking of the largest group providers of each savings product, by proportion of customers, February 2015
Advertising spend
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- Greater focus on brand building in 2014
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- Figure 26: Total advertising expenditure on cash savings products, by product type, 2010-14
- Halifax remains the highest-spending advertiser in the savings account market
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- Figure 27: Top ten advertisers of cash savings products (excluding cash ISAs and children’s saving products), 2012-14
- TV and press claimed 88% of sector adspend in 2014
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- Figure 28: Total advertising expenditure on cash savings products (excluding cash ISAs and children’s saving products), by media type, 2014*
- A note on adspend
Competitive strategies – Channel evolution
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- High street players continue to develop their multi-channel capabilities
- Lloyds Bank: Online appointment booking system
- Barclays: Video Banking
- Nationwide NOW
- Digital-only banks are on the way…
- …while the big high street players are developing their digital services
- Lloyds Banking Group: Electronic identification
- Barclays: Cheque imaging service
- RBS/NatWest: Fingerprint login
- Nationwide: Impulse Saver
Competitive strategies – Product development
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- All eyes on current accounts
- Providers target loyalty
- Simplification of savings products…
- …and introduction of ‘loyalty’ products
- A look towards customers with disabilities
- RBS/NatWest: Accessible cards for the partially sighted and blind
- Barclays: In-branch beacon technology
Brand research
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- What you need to know
- Brand map
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- Figure 29: Attitudes towards and usage of selected financial services brands, December 2014
- Key brand metrics
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- Figure 30: Key metrics for selected financial services brands, December 2014
- Brand attitudes: The Co-operative Bank maintains a socially responsible reputation despite negative headlines
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- Figure 31: Attitudes, by brand, December 2014
- Brand personality: First Direct enjoys fun and vibrant brand image
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- Figure 32: Brand personality – Macro image, December 2014
- Brands with a high street presence tend to have stronger customer service associations
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- Figure 33: Brand personality – Micro image, December 2014
- Brand analysis
- Nationwide has a strong overall brand image
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- Figure 34: User profile of Nationwide, December 2014
- First Direct is most likely to be seen as upbeat
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- Figure 35: User profile of First Direct, December 2014
- NS&I is thought to offer something different
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- Figure 36: User profile of NS&I, December 2014
- Yorkshire Building Society has an all-round brand image
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- Figure 37: User profile of Yorkshire Building Society, December 2014
- Halifax uses branch network to boost perceptions of customer service
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- Figure 38: User profile of Halifax, December 2014
- Clydesdale Bank has strong Scottish bias
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- Figure 39: User profile of Clydesdale Bank, December 2014
- The Co-operative Bank continues to feel the effects of negative stories
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- Figure 40: User profile of The Co-operative Bank, December 2014
- Aldermore lacks overall awareness and exposure to develop strong brand image
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- Figure 41: Demographic breakdown of consumers aware of Aldermore, December 2014
The Consumer – What you need to know
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- Over one quarter with no savings or investments in 2014
- Easy-access savings accounts: the most popular savings product
- More than half of adult savers own multiple savings products
- Bank branches are still alive and kicking
- Almost two fifths of savers expect to increase their savings…
- …while fewer than one in five non-savers expect to start saving
- Peace of mind and protection against the unexpected are the main reasons for saving
- Over one third of savers keep savings in their current accounts
- Personal financial management mobile apps mostly used by younger savers
- Price comparison sites used by over half of savers
- Consumers split over confusion in the savings market
- Nearly one third have switched savings accounts in the last year
Value of savings and investments
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- Over one quarter of over-18s have no savings or investments
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- Figure 42: Value of savings and investments, February 2015, January 2014, January 2013
- Value of savings increases with age…
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- Figure 43: Value of savings and investments, by Age, February 2015
- …and income
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- Figure 44: Value of savings and investments, by gross annual household income, February 2015
- But the lower end of the market should not be ignored
Ownership of savings products
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- Easy-access savings accounts: the most popular savings product
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- Figure 45: Ownership of savings products, February 2015
- Higher-value savers attracted to tax-exempt savings products…
- …but also to fixed-rate/notice savings accounts
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- Figure 46: Ownership of savings products, by value of savings and investments, February 2015
Number of saving products held
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- More than half of adult savers own multiple savings products
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- Figure 47: Number of saving product types held, February 2015
- Figure 48: Ownership of savings products, by number of saving product types held, February 2015
- Over-55s and higher earners most likely to have multiple savings products
Consumer channel preferences
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- Online dominates across all ages, but particularly Millennials…
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- Figure 49: Activities relating to savings, by channel preference, February 2015
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- Figure 50: Activities relating to savings by channel preference, by generations, February 2015
- …but Millennials also value personal contact when applying for a savings product
- Bank branches are still alive and kicking
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- Figure 51: Agreement with the statement ‘I wouldn’t want to save with a company that doesn’t have high street branches’, February 2015
Consumer saving plans
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- Almost two fifths of savers expect to increase their savings
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- Figure 52: Savers’ future saving plans, January 2014 and February 2015
- Fewer than one in five non-savers expect to start saving
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- Figure 53: Non-savers’ future saving plans, January 2014 and February 2015
- Millennials are confident about the next six months
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- Figure 54: Savers’ future saving plans, by age, February 2015
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- Figure 55: Non-savers’ future saving plans, by age, February 2015
Reasons for saving
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- Peace of mind and protection from the unexpected are the main reasons for saving
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- Figure 56: Reasons for saving, February 2015
- Consumers’ financial confidence affects their motivations to save
- Millennials most likely to save towards a deposit to buy a home
- Individuals with savings of £100,000 or more look towards retirement
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- Figure 57: Reasons for saving, by value of savings and/or investments, February 2015
Consumer saving habits
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- Over one third of savers keep savings in their current accounts
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- Figure 58: Consumer saving habits, February 2015
- Intentions may be good, but actions speak louder than words
- Regular savings account holders are more disciplined
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- Figure 59: Consumer saving habits, by savings product ownership, February 2015
- Personal financial management mobile apps mostly used by younger savers
Savers’ interest in the market
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- More than two fifths of savers say that they regularly check the market
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- Figure 60: Savers’ interest in the market, February 2015
- Price comparison sites used by over half of savers
- Consumers split over confusion in the savings market
- Engagement is greatest among adults with higher savings
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- Figure 61: Savers’ interest in the market, by value of savings and investments, February 2015
Savers’ attitudes and switching behaviour
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- Nearly one third have switched savings accounts in the last year
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- Figure 62: Savers’ attitudes and switching behaviour, February 2015
- Accounts with introductory bonuses are considered by 75% of savers
Abbreviations
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