Deposit and Savings Accounts - UK - April 2013

INTRODUCTION
Report scope and product definitions
Abbreviations
EXECUTIVE SUMMARY
The market
The market will continue to grow, albeit steadily
Figure 1: Forecast of retail savings balances, at current prices – fan chart, 2007-17
Sub-sector performance
Size of the saver population
Market factors
Poor savings environment acts as a disincentive to save
Low confidence and low returns
Companies, brands and innovation
Largest providers of savings accounts
Figure 2: Providers’ share of total retail savings balances, shown on a group basis – UK, 2012
Brands score poorly on trust and differentiation
Figure 3: Attitudes towards and usage of selected brands in the deposit and savings account market, December 2012
Online account management has become the preferred channel
Figure 4: Channel most used to access savings account, by type of account held, January 2013
Savings providers cut back adspend in 2012
The consumer
Two fifths of savers hold more than one savings account
An easy-access account is the most popular cash savings product
Figure 5: Ownership of cash savings products, by type of account, January 2013
A quarter of adults save every month without fail
Figure 6: Saving frequency, January 2013
Savings intentions over the coming six months
Figure 7: Amount expected to save within the next six months relative to the previous six months, January 2013
More than a quarter of savers are considering alternative places to invest their cash
Figure 8: Agreement with statements about saving and savings accounts, January 2013
What we think
ISSUES IN THE MARKET
Is competition increasing the savings market?
What types of savings accounts are consumers favouring?
How frequently are they saving?
Do consumers trust savings providers to look after their money?
TREND APPLICATION
Trend: FSTR HYPR
Trend: Prove It
Mintel’s futures: Access Anything, Anywhere
MARKET DRIVERS
Key points
Savers are being penalised by a low base rate and high inflation
Figure 9: Average annual changes in the Bank of England base rate, CPI and RPI – UK, 2004-13
Negative rates mooted but very unlikely
Online accounts offer better rates of return than their branch-based equivalents
Figure 10: Average monthly quoted branch-based deposit interest rates, January 2006-January 2013
Introduction of FLS has further depressed savings rates…
…and reduced product availability
Economic downturn prompted rise in the savings ratio…
Figure 11: Gross household savings and saving ratio, seasonally adjusted and at current prices, 2001-12
…though this doesn’t necessarily mean people are saving more
Wider economic backdrop
Household income squeeze will remain a key feature of 2013
Figure 12: Monthly change in RPI and average weekly earnings, January 2008-December 2012
Ongoing eurozone debt crisis threatens to further undermine confidence
Consumer sentiment languishes in negative territory
Figure 13: GfK Consumer Confidence Barometer – UK, January 1989-January 2013
Both saving and spending confidence remain weak
Figure 14: Saving and spending confidence, March 2001-September 2012
Two fifths of people have ‘added to their savings’ in the past three months…
Figure 15: Usage of disposable income – recent past and near future, January 2013
…but savings intentions have receded over the past few months
Figure 16: Cash deposit intentions, March 2006-December 2012
More people are motivated to save by short-term materialistic goals than a desire to ensure a comfortable retirement
Figure 17: Main reasons for saving, February 2012
COMPETITIVE CONTEXT
Key points
Cash ISAs: both a rival and a variant product
Figure 18: Value of new ISA subscriptions, 2006/07-2011/12
Far fewer people hold equities than cash savings
Figure 19: Ownership of savings and investments, by asset type, November 2012
Improved stockmarket performance could attract disillusioned savers
Figure 20: FTSE 100 and FTSE All-Share – daily index movements, January 2004-February 2013
MARKET SWOT ANALYSIS
Figure 21: Retail savings accounts – SWOT analysis, 2013
WHO’S INNOVATING?
Key points
Improved funding situation reduces incentive to innovate
The banks are putting greater focus on their current accounts…
Santander’s 123 Current Account
M&S Bank launches Premier Current Account
Lloyds TSB’s Vantage offer
Nationwide enters the packaged account market
…and existing customers
MARKET SIZE AND FORECAST
Key points
Retail deposits increase by 5% in 2012
Figure 22: Retail savings balances, by sector, 2003-12
More money flowing into time accounts, as savers seek to bolster their returns
Figure 23: Volume and value of individual interest-bearing current and deposit accounts (MBBGs only), 2003-11
A sizeable customer base
Figure 24: Estimated number of retail savers in the UK, by type of account, January 2013
Very steady growth trend is forecast to continue
Figure 25: Forecast of retail savings balances, at current prices – fan chart, 2007-17
Figure 26: Forecast of total retail savings balances, 2012-17
Forecast methodology
Fan chart explanation
MARKET SHARE
Key points
Halifax is the leading brand in the retail savings account market
Figure 27: Ranking of largest providers of savings accounts, by proportion of customers, January 2013
Provider rankings based on overall retail savings balances
Figure 28: Providers’ total retail savings balances, shown on a group basis – UK, 2010-12
COMPANIES AND PRODUCTS
Lloyds Banking Group
Figure 29: Key annual financial data for Lloyds Banking Group, 2011 and 2012
Nationwide Building Society
Figure 30: Key interim financial data for Nationwide Building Society, H1 2011 and H1 2012
Santander
Figure 31: Key annual financial data for Santander UK, 2011 and 2012
Barclays
Figure 32: Key annual financial data for Barclays Plc, 2011 and 2012
HSBC
Figure 33: Key annual financial data for HSBC Bank Plc, 2011 and 2012
RBS Group
Figure 34: Key annual financial data for RBS Group, 2011 and 2012
BRAND RESEARCH
Brand map
Figure 35: Attitudes towards and usage of selected brands in the deposit and savings account market, December 2012
Correspondence analysis
Brand qualities
Figure 36: Brand attributes and qualities, by selected brands operating in the deposit and savings market, December 2012
Brand personality
Figure 37: Deposit and savings account brand personality – macro image, December 2012
Figure 38: Deposit and savings account brand personality – micro image, December 2012
Brand experience
Figure 39: Usage of brands operating in the deposit and savings market, December 2012
Figure 40: Satisfaction with various brands operating in the deposit and savings market, December 2012
Figure 41: Consideration of brands that operate in the deposit and savings market, December 2012
Figure 42: Consumer perceptions of current brand performance of selected brands operating in the deposit and savings market, December 2012
Figure 43: Deposit and savings account brand recommendation – Net Promoter Score, December 2012
Brand index
Figure 44: Deposit and savings account brand index, December 2012
Figure 45: Deposit and savings account brand index vs. recommendation, December 2012
Target group analysis
Figure 46: Target groups, December 2012
Figure 47: Usage of brands operating in the deposit and savings market, by target groups, December 2012
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
BRAND COMMUNICATION AND PROMOTION
Key points
2012 sees sharp fall in industry adspend
Figure 48: Total advertising expenditure on cash savings products, 2008-12
In 2012 savings providers spent more on their brands
Figure 49: Total advertising expenditure on cash savings products, by product type, 2008-12
TV claimed the largest share of sector adspend in 2012
Figure 50: Distribution of adspend on cash savings products, by media type, 2010-12
Halifax was once again the highest-spending advertiser in the savings account market in 2012…
Figure 51: Top ten advertisers of savings accounts (excluding cash ISAs), 2010-12
…while sister brand Lloyds TSB invested the most in the cash ISA market
Figure 52: Top ten advertisers of cash ISAs, 2010-12
CHANNELS TO MARKET
Key points
Greater focus on remote channels underpins steady decline in the UK branch network
Figure 53: UK bank and building society branch networks, 2003-11
Most savers access their accounts online
Figure 54: Channel most used to access savings account, by type of account held, January 2013
NUMBER OF ACCOUNTS HELD AND SWITCHING ACTIVITY
Key points
Many people hold multiple savings accounts
Figure 55: Number of savings accounts held, 2009-12
Fairly stable customer churn
Figure 56: Percentage of savers who have opened a new savings account within the past 12 months, 2009-12
TYPES OF SAVINGS ACCOUNT HELD
Key points
Survey background
Roughly four in five UK adults have some form of cash savings product
Figure 57: Ownership of cash savings products, February 2012 and January 2013
Over-55s are most likely to have savings…
Figure 58: Ownership of cash savings products, by gender and age, January 2013
…due to their greater wealth accumulation
Figure 59: Value of investible assets, by gender and age, January 2013
Fixed-term bonds and tax-exempt savings products strongly appeal to those with substantial assets
Figure 60: Ownership of cash savings products, by value of investible assets, January 2013
RECENT SAVING ACTIVITY AND FUTURE PLANS
Key points
One in four adults are managing to save every month without fail
Figure 61: Saving frequency, by type of savings product owned, January 2013
Customers who are planning to save more over the next six months are offset by those who expect to save less
Figure 62: Saving intentions over the next six months, by type of savings product owned, January 2013
CUSTOMER EXPERIENCE
Key points
One in four have been treated poorly or unfairly by their savings account provider
Figure 63: Frequency of experiencing poor customer service within the past two years, January 2013
Customer detriment is most common among notice account holders
Figure 64: Frequency of experiencing poor customer service within the past two years, by type of savings account owned, January 2013
Nationwide has the best customer service record
Figure 65: Frequency of experiencing poor customer service within the past two years, by savings account provider (top seven only), January 2013
ATTITUDES TOWARDS SAVING AND SAVINGS ACCOUNTS
Key points
Most savers are disappointed by the rates of returns they are getting
Figure 66: Agreement with statements about saving and savings accounts, January 2013
Fixed-term bond holders are the most disillusioned
Figure 67: Agreement with statements about saving and savings accounts, by type of account held, January 2013
A large minority of savers think it’s unsafe to keep savings at one bank
Figure 68: Level of agreement with statements about saving and savings accounts, by value of investible assets, January 2013
APPENDIX – MARKET SIZE AND FORECAST
Total market forecast – best- and worst-case scenarios
Figure 69: Forecast of total retail savings balances – best- and worst-case scenarios, at current prices, 2012-17
Market forecast by sector
Figure 70: Forecast of total retail savings balances, by sector, at current prices, 2007-17
Bank sector forecast
Figure 71: Forecast of retail savings balances – bank sector only, at current prices – fan chart, 2007-17
Figure 72: Forecast of total retail savings balances – bank sector only, 2012-17
Figure 73: Forecast of bank sector retail savings balances – best- and worst-case scenarios, at current prices, 2012-17
Mutual sector forecast
Figure 74: Forecast of retail savings balances – mutual sector only, at current prices – fan chart, 2007-17
Figure 75: Forecast of total retail savings balances – mutual sector only, 2012-17
Figure 76: Forecast of mutual retail savings balances – best- and worst-case scenarios, at current prices, 2012-17
NS&I sector forecast
Figure 77: Forecast of retail savings balances – NS&I sector only, at current prices – fan chart, 2007-17
Figure 78: Forecast of total retail savings balances – NS&I sector only, 2012-17
Figure 79: Forecast of NS&I retail savings balances – best- and worst-case scenarios, at current prices, 2012-17
Forecast methodology
Fan chart explanation
APPENDIX – BRAND RESEARCH
Figure 80: Brand usage, December 2012
Figure 81: Brand commitment, December 2012
Figure 82: Brand momentum, December 2012
Figure 83: Brand diversity, December 2012
Figure 84: Brand satisfaction, December 2012
Figure 85: Brand recommendation, December 2012
Figure 86: Brand attitude, December 2012
Figure 87: Brand image – macro image, December 2012
Figure 88: Brand image – micro image, December 2012
Figure 89: Profile of target groups, by demographics, December 2012
Figure 90: Psychographic segmentation, by target groups, December 2012
Figure 91: Brand usage, by target groups, December 2012
Brand index
Figure 92: Brand index, December 2012
APPENDIX – OWNERSHIP OF SAVINGS ACCOUNTS
Figure 93: Ownership of cash savings products, by demographics, January 2013
APPENDIX – VALUE OF INVESTIBLE ASSETS
Figure 94: Value of investible assets, by demographics, January 2013
APPENDIX – CUSTOMER PROFILES FOR THE TOP SEVEN PROVIDERS
Figure 95: Comparison of customer profiles for the top seven providers of savings accounts, by demographics, January 2013
APPENDIX – RECENT SAVINGS ACTIVITY AND FUTURE PLANS
Figure 96: Saving frequency, by demographics, January 2013
Figure 97: Saving frequency, by value of investible assets, January 2013
Figure 98: Saving intentions over next six months, by demographics, January 2013
Figure 99: Saving intentions over the next six months, by value of investible assets, January 2013
Figure 100: Saving intentions over next six months, by provider of easy-access savings account (top seven only), January 2013
APPENDIX – CUSTOMER EXPERIENCE
Figure 101: Experience of poor customer service within past two years in relation to savings accounts, by demographics, January 2013
APPENDIX – ATTITUDES TOWARDS SAVING AND SAVINGS ACCOUNTS
Figure 102: Agreement with statements about saving and savings accounts, by demographics, January 2013
Figure 103: Agreement with further statements about saving and savings accounts, by demographics, January 2013
Figure 104: Level of agreement with statements about saving and savings accounts, by account provider (top seven only), January 2013