Savings - Ireland - January 2015

INTRODUCTION
Key themes in the report
Definition
Data sources
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Total deposits from private households, NI and RoI, 2010-14
Forecast
Figure 2: Index of total deposits from private households, RoI and NI, 2010-20
Market factors
Both Irish economies back to growth, with RoI’s prospects particularly positive
Consumer confidence remains high and on upward trajectory
2015 savings ratio down on recession years – but still higher than pre-recession years
Confidence among consumers in their ability to at least maintain savings behaviour…
…but household incomes remain squeezed for many, inhibiting saving
The consumer
Dominance of standard savings accounts indicates aversion to risk
Figure 3: Ownership of savings and investment products, NI and RoI, October 2014
Only a minority of consumers have no savings at all
Figure 4: Amounts that consumers currently have in their savings and investments (excluding pensions and second homes), NI and RoI, October 2014
Emergencies, unexpected events and security are the primary motivations for saving
Figure 5: Intended purpose of savings and investments, NI and RoI, October 2014
What we think
ISSUES AND INSIGHTS
What level of savings do Irish consumers have?
The facts
The implications
What savings and investment products do Irish consumers own?
The facts
The implications
Why do Irish consumers save?
The facts
The implications
TREND APPLICATION
Trend: Prepare for the Worst
Trend: Help Me Help Myself
Trend: Generation Next
MARKET OVERVIEW
Key points
Both Irish economies back on road to growth
Figure 6: GDP growth, annual %, UK, NI and RoI, actual and projected, 2012-15
Positive consumer outlook could encourage spending over saving
Figure 7: Consumer Confidence Index, NI, September 2011-September 2014
Figure 8: Consumer Sentiment Index, RoI, December 2011-December 2014
Savings ratio forecast to be 3.3% in NI, 5.2% in RoI in 2015
Figure 9: Household savings ratio as proportion of household income, UK (including NI) and RoI, actual and forecast, 2008-15
Most NI consumers expect to maintain savings at their current level
Figure 10: Savings intentions for next 12 months, NI, April 2014
RoI consumers broadly positive about savings environment
Figure 11: Savings environment index, RoI, December 2013-December 2014
Figure 12: Agreement with selected statements relating to saving environment, RoI, December 2014
RoI consumers’ attitudes towards own saving habits generally positive
Figure 13: Savings Attitude Index, RoI, December 2013-December 2014
Possible shift from prioritising debt reduction to saving underway in RoI…
Figure 14: Consumers’ intentions for surplus money, RoI, December 2013 and December 2014
…but only a minority of Irish consumers can afford to save every month
Figure 15: How consumers rate their current financial situation, NI and RoI, December 2014
MARKET SIZE AND FORECAST
Key points
Slight increase in value of deposits in 2014
Figure 16: Total deposits from private households, Ireland, RoI and NI, 2010-20
2013-14 growth in value largely came from NI consumers
Recovery to build (slow) momentum from 2015 onwards
Figure 17: Index of total deposits from private households, RoI and NI, 2010-20
Interest rates to strongly influence consumers’ savings behaviour
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
COMPANIES AND INNOVATIONS
Key points
Examples of innovation
Sweden-based Ikano Bank is taking the phrase ‘playing around with your finances’ to a new level
Fee-free branchless bank interacts with its customers through a mobile app
Social Money launches SmartyPig, making it easier and more social to save money
 COMPANIES AND PRODUCTS
Allied Irish Bank
Key facts
Savings products
Recent developments
An Post
Key facts
Savings products
Recent developments
Bank of Ireland
Key facts
Savings products
Recent developments
The Co-operative Bank
Key facts
Savings products
Recent developments
Danske Bank
Key facts
Savings products
Recent developments
EBS Limited
Key facts
Savings products
Recent developments
First Trust Bank
Key facts
Savings products
Recent developments
HSBC
Key facts
Savings products
Recent developments
KBC Group
Key facts
Savings products
Recent developments
Nationwide
Key facts
Savings products
Recent developments
Permanent TSB
Key facts
Savings products
Recent developments
Post Office
Key facts
Savings products
Recent developments
RaboDirect
Key facts
Savings products
Santander
Key facts
Savings products
Recent developments
Ulster Bank
Key facts
Savings products
Recent developments
THE CONSUMER – OWNERSHIP OF SAVINGS PRODUCTS
Key points
Simple, risk-free products most popular among Irish consumers
Figure 18: Ownership of savings and investment products, NI and RoI, October 2014
Standard savings accounts popular among all ages and means
Figure 19: Ownership of savings accounts, by age and social class, NI and RoI, October 2014
Ownership of notice accounts highest among men and ABC1s
NI consumers opting for cash ISAs over stocks and shares ISAs
Figure 20: Ownership of cash ISAs and stocks and shares ISAs, by working status, NI, October 2014
High level intent to purchase stocks and shares ISAs in future
Figure 21: Consumers who do not own stocks and shares ISAs but plan on buying within the next year, by gender and age, NI, October 2014
Pension gap between men and women still going strong
Figure 22: Ownership of personal pensions, by gender, age and social class, NI and RoI, October 2014
Figure 23: Ownership of company pensions, by gender, age and social class, NI and RoI, October 2014
THE CONSUMER – VALUE OF SAVINGS
Key points
Most consumers have some savings – but generally quite modest
Figure 24: Amounts that consumers currently have in their savings and investments (excluding pensions and second homes), NI and RoI, October 2014
ABC1s most likely to have high level of savings/investments
Figure 25: Consumers who claim to have no savings or investments, by social class, NI and RoI, October 2014
Younger consumers less likely to save
Figure 26: Consumers who claim to have no savings or investments, by age, NI and RoI, October 2014
Women lagging men in the savings/investment stakes
Figure 27: Consumers who claim to have no savings or investments, by gender, NI and RoI, October 2014
THE CONSUMER – REASONS FOR SAVING
Key points
Emergencies, surprises and security the main reasons for saving
Figure 28: Intended purpose of savings and investments, RoI and NI, October 2014
Women focused on precautionary saving, men on retirement
Figure 29: Consumers who are saving ‘for the security of knowing the money is there’, by gender and social class, NI and RoI, October 2014
Holidays and house deposits also on women’s saving agenda
Social class a definite factor in why consumers save
Age is a major factor in consumers’ motivation for saving
APPENDIX
NI Toluna tables
Figure 30: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, NI, October 2014
Figure 31: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, NI, October 2014 (continued)
Figure 32: Ownership of savings account (excluding Post Office accounts), by demographics, NI, October 2014
Figure 33: Ownership of cash ISA, by demographics, NI, October 2014
Figure 34: Ownership of stocks and shares ISA, by demographics, NI, October 2014
Figure 35: Ownership of company pension, by demographics, NI, October 2014
Figure 36: Ownership of NS&I (National Savings and Investments) products (eg premium bonds, index-linked savings certificates), by demographics, NI, October 2014
Figure 37: Ownership of personal pension, by demographics, NI, October 2014
Figure 38: Ownership of individual company shares, by demographics, NI, October 2014
Figure 39: Ownership of notice account, by demographics, NI, October 2014
Figure 40: Ownership of with-profits, unit-linked, money market, distribution or guaranteed investment bond, by demographics, NI, October 2014
Figure 41: Ownership of Post Office/An Post Saving Account, by demographics, NI, October 2014
Figure 42: Ownership of investment trust, by demographics, NI, October 2014
Figure 43: Ownership of other savings or investments, by demographics, NI, October 2014
Figure 44: Intended purpose of savings and investments, by demographics, NI, October 2014
Figure 45: Intended purpose of savings and investments, by demographics, NI, October 2014 (continued)
Figure 46: Intended purpose of savings and investments, by demographics, NI, October 2014 (continued)
RoI Toluna tables
Figure 47: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, RoI, October 2014
Figure 48: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, RoI, October 2014 (continued)
Figure 49: Ownership of savings account (excluding Post Office accounts), by demographics, RoI, October 2014
Figure 50: Ownership of company pension, by demographics, RoI, October 2014
Figure 51: Ownership of personal pension, by demographics, RoI, October 2014
Figure 52: Ownership of individual company shares, by demographics, RoI, October 2014
Figure 53: Ownership of notice account, by demographics, RoI, October 2014
Figure 54: Ownership of with-profits, unit-linked, money market, distribution or guaranteed investment bond, by demographics, RoI, October 2014
Figure 55: Ownership of Post Office/An Post saving account, by demographics, RoI, October 2014
Figure 56: Ownership of state savings products (savings bonds, savings certificates, instalment savings and prize bonds), by demographics, RoI, October 2014
Figure 57: Ownership of investment trust, by demographics, RoI, October 2014
Figure 58: Ownership of other savings or investments, by demographics, RoI, October 2014
Figure 59: Intended purpose of savings and investments, by demographics, RoI, October 2014
Figure 60: Intended purpose of savings and investments, by demographics, RoI, October 2014 (cont)
Figure 61: Intended purpose of savings and investments, by demographics, RoI, October 2014 (cont)