Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Savings deposits forecast to grow by around 3% annually
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- Figure 1: Forecast of total retail savings deposits, 2012-22
- Interest bearing sight deposits account for 45% of the market
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- Figure 2: Share of household retail savings balances, by main product type, 2017
- Savings ratio falls to historic low
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- Figure 3: Household savings ratio, 2008-17
- Competition in the cash savings market
- Companies and brands
- Lloyds Banking Group has the greatest share of customer deposits
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- Figure 4: Providers’ total retail savings balances at year end, shown on a group basis – UK, 2016-17
- Providers respond differently to base rate increase
- Microsaving tools could tackle savings crisis
- Adspend doubles in 2018
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- Figure 5: Above-the-line, online display and direct mail advertising expenditure on cash savings products, by type of product, 2014-18
- The consumer
- Four in five have a cash savings account
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- Figure 6: Ownership of cash saving products, February 2018
- Unstructured approach to saving makes it hard to set goals
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- Figure 7: Approach to saving, February 2018
- Online access is a priority
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- Figure 8: Attitudes towards managing savings, February 2018
- Rising interest rates could lead to an increase in savings activity
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- Figure 9: Impact of interest rates on savings behaviour, February 2018
- Positive levels of interest in digital saving innovations
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- Figure 10: Interest in various digital saving innovations, February 2018
- What we think
Issues and Insights
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- Younger consumers more reactive to rising interest rates
- The facts
- The implications
- Pent-up demand for digital saving innovations
- The facts
- The implications
- Adapting to people’s saving approach is key to personalisation
- The facts
- The implications
The Market – What You Need to Know
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- Savings deposits forecast to grow by around 3% annually
- Interest bearing sight deposits account for 45% of the market
- Savings ratio falls to a historic low
- Competition in the cash savings market
Market Size and Forecast
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- Annual growth in deposits drops to 3%
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- Figure 11: Total retail savings deposits, 2007-17
- Savings deposits forecast to grow by around 3% annually
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- Figure 12: Forecast of total retail savings deposits, 2012-22
- Figure 13: Forecast of total retail savings balances, at current and constant prices, 2017-22
- Forecast methodology
Market Segmentation
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- Interest-bearing sight deposits account for 45% of the market
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- Figure 14: Household retail savings balances, by main product type, 2013-17
- Time deposits fall by 4%
- Non interest-bearing deposits grew by 8%
Market Drivers
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- Competition in the cash savings market
- Interest rates begin to rise
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- Figure 15: Effective interest rates on household deposit balances versus official bank base rate, January 2010-February 2018
- Average rates still below inflation
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- Figure 16: Annual change in the Consumer Price Index (CPI) and average weekly earnings (year on year 3 months average), January 2012-March 2018
- Nearly a quarter have no savings
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- Figure 17: Value of savings and investments, February 2018
- Savings ratio falls to a historic low
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- Figure 18: Household savings ratio, 2008-17
- Open Banking
Companies and Brands – What You Need to Know
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- Lloyds Banking Group has the greatest share of customer deposits
- Providers respond differently to base rate increase
- Microsaving tools could tackle savings crisis
- Adspend doubles in 2018
Market Share
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- Lloyds Banking Group has the greatest share of customer deposits
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- Figure 19: Providers’ total retail savings balances at year end, shown on a group basis – UK, 2016-17
- More people look elsewhere for fixed-rate or notice accounts
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- Figure 20: Savings product provider used, by product type, March 2018
- Majority only use one savings provider
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- Figure 21: Number of different savings providers used, by age, March 2018
Competitive Strategies and Innovation
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- Providers respond differently to base rate increase
- Microsaving tools could tackle savings crisis
- AI-based affordability saving
- Rounding up
- Savings ‘pots’ give people greater control over their savings
- Current account interest on balances falling
Advertising and Marketing Activity
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- Adspend doubles in 2018
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- Figure 22: Above-the-line, online display and direct mail advertising expenditure on cash savings products, by type of product, 2014-18
- Halifax accounts for 30% of total adspend
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- Figure 23: Top 15 advertisers of above-the-line, online display and direct mail advertising on cash savings products, 2015/16-17/18
- TV share of spend continues to rise
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- Figure 24: Share of above-the-line, online display and direct mail advertising expenditure on cash savings products, by type of media, 2015/16-2017/18
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Four in five have a cash savings account
- Unstructured approach to saving makes it hard to set goals
- Online access is a priority
- Rising interest rates could lead to an increase in savings activity
- Positive levels of interest in digital saving innovations
Ownership of Cash Saving Products
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- Four in five have a cash savings account
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- Figure 25: Ownership of cash saving products, February 2018
- Higher-value savers have a greater variety of accounts
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- Figure 26: Ownership of cash saving products, by value of savings, February 2018
- Higher penetration of accounts among over 55s
- Online saving pots could appeal to younger generations
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- Figure 27: Repertoire of ownership of cash saving products, February 2018
Approach to Saving
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- Unstructured approach to saving makes it hard to set goals
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- Figure 28: Approach to saving, February 2018
- Financial pressures challenge structured saving activities
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- Figure 29: Approach to saving, by age, February 2018
- Lower earners find it difficult to save regularly
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- Figure 30: Approach to saving, by household income, February 2018
Attitudes towards Managing Savings
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- Savings protection is key
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- Figure 31: Attitudes towards managing savings, February 2018
- Online access is a priority
- People look beyond their main provider for restricted access accounts
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- Figure 32: Agreement with the statement ‘I have a savings account with a provider other than my main current account provider’
Impact of Interest Rates on Saving Behaviour
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- Rising interest rates could lead to an increase in savings activity
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- Figure 33: Impact of interest rates on savings behaviour, February 2018
- Most people are likely to stay put
- Timed account holders more likely to switch
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- Figure 34: Agreement with the statement ‘I am considering moving some savings to another provider or product that offers a better rate’, February 2018
- Financially healthy Millennials more open to alternative providers
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- Figure 35: Target groups based on attitudes towards saving – CHAID – Tree output, February 2018
Interest in Digital Saving Innovations
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- Positive levels of interest in digital saving innovations
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- Figure 36: Interest in various digital saving innovations, February 2018
- Younger generations more interested in digital saving innovations
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- Figure 37: Interest in various digital saving innovations, by age, February 2018
- Financial strugglers interested in automated saving
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- Figure 38: Interest in various digital saving innovations, by financial situation, February 2018
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 39: Best and worst case forecast scenarios for total retail savings deposits, 2017-22
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