Table of Contents
Overview
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- What you need to know
- Report scope
Executive Summary
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- The market
- Savings growth slows in 2017
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- Figure 1: Total retail savings deposits, 2007-17
- Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
- Rising inflation triggers first base rate increase
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- Figure 2: UK’s consumer price index, base rate and average weekly earnings growth, September 2008-September 2017
- Falling savings ratio
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- Figure 3: Quarterly gross household savings and savings ratio, seasonally adjusted and at current prices, Q1 2013-Q1 2017
- FCA publishes final report on asset management market study
- Help to Save aims to improve savings activity
- The consumer
- Housing situation reflects big differences in savings
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- Figure 4: Value of savings and investments, October 2017
- Standard cash accounts more popular than ISAs
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- Figure 5: Savings and investment product ownership, October 2017
- Emergencies/unexpected events are the most common reason to save
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- Figure 6: Saving priorities, October 2017
- Over half haven’t saved as much as they planned over the last year
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- Figure 7: Attitudes towards managing savings, October 2017
- Online application and management are key for new customers
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- Figure 8: Important factors when choosing a savings or investment provider, October 2017
- Benefits other than interest highlight a chance to personalise products
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- Figure 9: Interest in new savings account features, October 2017
- Rising rates could lead to increased switching activity
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- Figure 10: Attitudes towards the current savings environment, October 2017
- Ability to customise investments is important
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- Figure 11: Attitudes towards the current investing environment, October 2017
- What we think
Issues and Insights
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- Majority are just trying to meet their savings goals
- The facts
- The implications
- Aggregation apps can offer more beneficial insights around savings behaviour
- The facts
- The implications
The Market – What You Need to Know
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- Savings growth slows in 2017
- Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
- Rising inflation triggers first base rate increase
- FCA publishes final report on asset management market study
- Help to Save aims to improve savings activity
Savings and Investment Market Size
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- Savings growth slows in 2017
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- Figure 12: Total retail savings deposits, 2007-17
- Cash subscriptions fall whilst stocks and shares rise slightly
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- Figure 13: Number of ISAs and amounts subscribed, segmented by component type, 2010/11-2016/17
- Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
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- Figure 14: Retail sales of unit trusts and OEICs – UK-domiciled, 2013-17
The Savings and Investment Environment
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- Rising inflation triggers first base rate increase
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- Figure 15: UK’s consumer price index, base rate and average weekly earnings growth, September 2008-September 2017
- Some providers failing to pass on increase to customers
- Falling savings ratio
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- Figure 16: Quarterly gross household savings and savings ratio, seasonally adjusted and at current prices, Q1 2013-Q1 2017
- Proportion who say they have saved has fallen
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- Figure 17: Trends in savings activity, June 2012-August 2017
- A fall in confidence could boost saving
The Regulatory Environment
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- FCA publishes final report on asset management market study
- Government to publish long-term strategy for asset management industry
- MiFID II comes into force
- Help to Save aims to improve savings activity
- Cash savings market study
The Consumer – What You Need to Know
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- Housing situation reflects big differences in savings
- Emergencies/unexpected events are the most common reason to save
- Over half haven’t saved as much as they planned over the last year
- Online application and management are key for new customers
- Benefits other than interest highlight a chance to personalise products
- Ability to customise investments is important
Value of Savings and Investments
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- A third have less than £500 or no savings or investments
- Employers can do more to increase savings activity
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- Figure 18: Value of savings and investments, October 2017
- Housing situation reflects big differences in savings
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- Figure 19: Value of savings and investments, by housing situation, October 2017
Savings and Investment Product Ownership
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- Standard cash accounts more popular than ISAs
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- Figure 20: Savings and investment product ownership, October 2017
- One in five own an investment product
- Stocks and shares ISAs offer an entry point for beginners
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- Figure 21: Savings and investment product ownership, by value of savings and investments, October 2017
- Nearly half have two or more savings and investment products
- PFM apps can make it easier to manage multiple accounts
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- Figure 22: Repertoire of savings and investment product ownership, October 2017
Saving Priorities
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- Emergencies/unexpected events are the most common reason to save
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- Figure 23: Saving priorities, October 2017
- Young Millennials balancing short and long-term savings goals
- More focus needs to be placed on saving for retirement
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- Figure 24: Saving priorities, by generation, October 2017
- 18-24-year-olds have fewer savings goals…
- …whilst 25-34-year-olds need help juggling their savings goals
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- Figure 25: Repertoire of saving priorities, by age, October 2017
Savings Management
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- Over half haven’t saved as much as they planned over the last year
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- Figure 26: Attitudes towards managing savings, October 2017
- Two in five mostly manage their savings via mobile
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- Figure 27: Agreement with the statement ‘I mostly manage my savings through mobile banking’, by age, October 2017
- PFMs need to offer the flexibility of people’s own spreadsheet designs
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- Figure 28: Agreement with the statement ‘I use a spreadsheet to help me keep track of my saving and investing’, by savings and investment product ownership, October 2017
Choosing a Savings or Investment Provider
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- Online application and management are key for new customers
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- Figure 29: Important factors when choosing a savings or investment provider, October 2017
- Importance of brand means incumbent brands likely to retain share
- Higher-value savers will demand more
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- Figure 30: Important factors when choosing a savings or investment provider, by value of savings and investments, October 2017
Interest in Savings Account Innovation
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- Two in five want product recommendations
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- Figure 31: Interest in new savings account features, October 2017
- Benefits other than interest highlight a chance to personalise products
- One in four are interested in goal-based accounts
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- Figure 32: Interest in new savings account features, by age, October 2017
- Consumers are open to more communication
Attitudes towards Saving
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- Rising rates could lead to increased switching activity
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- Figure 33: Attitudes towards the current savings environment, October 2017
- Open Banking can help people to improve their savings activity
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- Figure 34: Response to ‘I plan to save more over the next 12 months than in the last 12 months’, by agreement with ‘I haven't saved as much as I planned to over the last 12 months’, October 2016
Attitudes towards Investing
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- Ability to customise investments is important
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- Figure 35: Attitudes towards the current investing environment, October 2017
- Most have not been put off by Brexit uncertainty
- Greater returns mean people still expect to move cash into investments
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- Figure 36: Agreement with the statement ‘I expect to move cash savings into investments in the next 12 months’, by age, October 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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