Table of Contents
Overview
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- What you need to know
- Report scope
Executive Summary
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- The market
- 2018 sees slow growth in the retail savings market
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- Figure 1: Total retail savings deposits, 2007-18*
- Interest rates are set to continue rising, but could be stalled by Brexit
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- Figure 2: UK’s consumer price index, base rate and average weekly earnings growth, October 2008-Sepember 2018
- UK households are still struggling to save
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- Figure 3: UK households’ cash basis saving ratio and national accounts saving ratio, seasonally adjusted and at current prices, Q1 2014-Q2 2018
- FCA turns focus to price discrimination and improving switching between platforms
- The consumer
- Over 60% have less than £10,000 saved
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- Figure 4: Value of savings and investments, October 2018
- 42% save on a regular basis
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- Figure 5: Current saving activity, October 2018
- Proportion of savers owning a saving account increases
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- Figure 6: Savings and investment product ownership, October 2018
- Nearly half had a savings target in the last year
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- Figure 7: Saving and investment aims, October 2018
- Rising interest rates would lead to 48% considering a lesser-known savings provider
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- Figure 8: Attitudes towards saving, October 2018
- A lack of confidence hampers investment ownership
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- Figure 9: Non-Investor attitudes towards investing, October 2018
- Majority are satisfied with their investment performance
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- Figure 10: Attitudes towards investing, October 2018
- Struggling savers are looking for assistance
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- Figure 11: Interest in savings and investment features, October 2018
- Consumers are unsure about the benefits of robo-advice
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- Figure 12: Interest in automated services, by savings and investment aims, October 2018
- What we think
Issues and Insights
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- Scope to extend reach of budgeting services to boost customer engagement
- The facts
- The implications
- Automated advice services will soon be the norm, but inexperienced investors need convincing
- The facts
- The implications
The Market – What You Need to Know
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- Growth remains slow, although rate rises should boost market
- Interest rates on an upward trajectory
- UK households are still struggling to save
- High street brands launch their own robo-advice services
- FCA turns focus to price discrimination and improving switching between platforms
Savings and Investment Market Size
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- Retail savings deposits break £1.5 trillion
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- Figure 13: Total retail savings deposits, 2007-18
- Cash ISAs halt decline while stocks and shares products continue to rise
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- Figure 14: Number of ISAs and amounts subscribed, segmented by component type, 2011/12-2017/18
- Net sales of unit trusts and OEICs fall by an estimated 65%
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- Figure 15: Retail sales of unit trusts and OEICs-UK domiciled, 2014-18
- Mixed asset funds account for 50% of all sales in 2018
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- Figure 16: Retail sales of unit trusts and OEICs-UK domiciled, by asset type, 2008-18
The Savings and Investment Environment
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- Weekly earnings growth moves above inflation
- Rates are on the rise, but Brexit uncertainty persists
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- Figure 17: UK’s consumer price index, base rate and average weekly earnings growth, October 2008-Sepember 2018
- Savings ratio on the rise, but savers are still struggling
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- Figure 18: UK households’ cash basis saving ratio and national accounts saving ratio, seasonally adjusted and at current prices, Q1 2014-Q2 2018
- Adviser-led platforms dominate the market
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- Figure 19: Assets under administration, by distribution channel, 2013-17
- Major brands are looking to expand into robo-advice
The Regulatory Environment
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- The Treasury Committee launches a new Investment Management Strategy
- FCA publishes discussion paper on price discrimination…
- …and is also looking to improve switching on investment platforms
The Consumer – What You Need to Know
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- Over 60% have less than £10,000 saved
- 42% save on a regular basis
- Proportion of savers owning a saving account increases
- Nearly half had a savings target in the last year
- Rising interest rates would lead to 48% considering a lesser-known savings provider
- A lack of confidence hampers investment ownership
- Majority are satisfied with their investment performance
- Savers who have failed to meet their goals are looking for assistance
- Consumers are unsure about the benefits of robo-advice
Value of Savings and Investments
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- Proportion of savers with less than £10,000 is growing
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- Figure 20: Value of savings and investments, 2016-18
- 50% of under-35s living at home have less than £500 in savings
- Empty Nesters are valuable customers, but are hard to engage
Current Saving Activity
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- Millennials are the most active savers
- Scope to increase saving activity among Gen X and Baby Boomers
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- Figure 21: Current saving activity, October 2018
- Home owners more likely to commit to saving regularly
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- Figure 22: Current saving activity, by housing situation, October 2018
Savings and Investment Product Ownership
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- Savings account ownership is widespread
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- Figure 23: Savings and investment product ownership, October 2018
- Scope to grow investment ownership among mid-range savers
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- Figure 24: Saving and investment product ownership, by value of savings and investments, October 2018
Approach to Saving and Investing
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- Just under half have saving or investment aims
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- Figure 25: Saving and investment aims, October 2018
- 69% have met or exceeded their saving or investment aims
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- Figure 26: Saving and investment progress, October 2018
- Inexperienced savers need more help
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- Figure 27: Saving and investment progress, by value of savings and investments, October 2018
Attitudes towards Saving
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- Almost half would consider a lesser-known provider
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- Figure 28: Attitudes towards saving, October 2018
- Regular savers are likely to increase their savings activity and keep a lookout for a better deal
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- Figure 29: Agreement with attitudes toward saving, by frequency of saving activity, October 2018
Non-Investors Attitudes towards Investing
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- Almost three quarters are uncomfortable putting their savings at risk
- Low level investments to attract new customers
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- Figure 30: Non-Investor attitudes towards investing, October 2018
- Millennials are more likely to consider impact of Brexit
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- Figure 31: Response to the statement ‘recent market uncertainty around Brexit puts me off investing’, by generation, October 2018
Investor Attitudes toward Investing
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- Investors show a willingness to consider a lesser-known brand
- Investors split on whether to increase their investment activity
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- Figure 32: Attitudes towards investing, October 2018
- Majority with savings goal are satisfied with their investment performance
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- Figure 33: Agreement with attitudes toward investing, by saving and investment aims, October 2018
Interest in Saving and Investment Features
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- Regular product updates the most popular feature
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- Figure 34: Interest in savings and investment features, October 2018
- Savers who have failed to meet their goals are looking for assistance
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- Figure 35: Interest in savings and investment features, by saving and investment progress, October 2018
Interest in Automated Advice Services
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- Consumers split over interest in automated advice
- Existing investors are more positive
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- Figure 36: Attitudes towards automated advice services, October 2018
- Parents with investment experience are strong prospects
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- Figure 37: Consumers Saving and Investing – CHAID – Tree output, October 2018
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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