Report: Attitudes to Savings - Ireland

Consumers spending, not savingInvesting rather than saving
Buy now pay later beats save now buy later
Tide many be turning back in favour of savings!
Summary of Key Findings
Less than half believe saving is important
Consumer attitudes not driving behaviour
Majority of consumers saving for a rainy day
Rising interest rates to generate business
Holidays are an important motivation for saving
Middle-aged have strongest savings ethos
More switchers in ABC1 group
Savings war in RoI
Developing a savings habit
Controversy over charging continues
RoI savings market valued at €144 billion
Term accounts growing in popularity
Long-term saving increasing in RoI
Next 12 months critical
Market Background
Background
Incentives to save
Taxation
NI
RoI
Financial regulator
IFRSA
Financial Services Authority
Internal Market Environment
Interest rates rise: good for savers, bad for borrowers
- Figure 1: UK and eurozone interest rates, 2001-07
What' s happening?
With what effect?
Who will it affect?
Controversy continues to haunt industry
Banking complaints in NI hold opportunity for UK banks
SSIA experience may have eclipsed controversy
Will consumers maintain the savings habit?
ISA
CTFs have an impact in UK
Indebtedness affects ability to save
Credit card debt
Mortgage debt
Global stock slide highlights security of standard savings
What happened?
What was the impact?
What has happened since?
Broader Market Environment
What are consumers worried about?
- Figure 2: Current worries, NI and RoI, 2006
Not putting money away for retirement
Consumers' concerns not consistent with spending decisions
Property prices having an impact
What has happened in the housing market?
- Figure 3: Property prices, RoI and NI, 2000-06
How does this affect the savings market?
Is the property market boom over?
Population changes
- Figure 4: Population change, by age group, NI, 2000-20
Competing for the grey pound/euro
Large middle-aged RoI group is good news
- Figure 5: Population change, by age group, RoI, 2000-20
Long-term responsibilities start later
' Kidulthood' lasts longer
- Figure 6: Average age at marriage, NI and RoI, 2000-05
Reaching ' kidults'
Parenthood starts later but lasts longer
- Figure 7: Average age of women at birth of first child, NI and RoI, 1991-2005
Impact on the savings market
Mortgages last longer
- Figure 8: Average age of first-time buyers, UK, 1974-2005
Longer mortgage terms affecting middle-aged ability to save
Market Value and Forecast
- Figure 9: Value of savings market, NI and RoI, 2003-12
Forecast
Increased prosperity benefiting savings market
- Figure 10: Segmentation of the savings market, by revenue generated, NI, 2003-07
Increased long-term saving in RoI
- Figure 11: Segmentation of the savings market, by revenue generated, RoI, 2003-07
Companies and Financial Products
Competitive overview
RoI savings war timeline
Maturing SSIAs lead to battle for customer retention
NI overview
Company Profiles
Banks
Abbey
AIB Group (Allied Irish Bank)
Alliance & Leicester
Bank of Ireland
HBOS (Halifax Bank of Scotland)
IIB
Permanent TSB
National Irish Bank
Northern Bank
Ulster Bank
Anglo Irish Bank
Building societies
Irish Nationwide
Nationwide
Northern Rock
Other financial institutions -- Post Office/An Post
Other financial institutions -- Credit Unions
Online operators
Cahoot.com
Egg.com
Rabodirect.ie
Supermarket banking
Tesco
Asda
Sainsbury' s
Consumer: Ownership of Savings Accounts
Falling deposit account ownership in RoI
- Figure 14: Ownership of a deposit savings account, NI and RoI, 2002-06
Ownership dips as RoI savers begin to spend
Instant access is key factor for Irish savers
- Figure 15: Penetration of savings and investment products, RoI and NI, 2003-06
Consumer: Attitudes Towards Saving and Finance
- Figure 16: Agreement with savings-related statements, NI and RoI, 2006
Are NI consumers better savers?
RoI consumers ' walk the talk'
Are men better savers?
- Figure 17: Agreement with savings-related statements, by gender, NI and RoI, 2006
Why is this happening?
Targeting customers by gender
The ' sleeping beauty' mentality
Targeting by demographic
- Figure 18: Agreement with savings-related statements, by age, NI, 2006
- Figure 19: Agreement with savings-related statements, by age, RoI, 2006
Middle-aged people have strongest savings ethos in NI
Young people follow the money
Catering for the grey market
Some consumers may be looking for alternative to property investment
Attitudes towards savings determined by income and education
- Figure 20: Agreement with savings-related statements, by socio-economic group, NI, 2006
- Figure 21: Agreement with savings-related statements, by socio-economic group, RoI, 2006
Can better short-term deals help generate new business
Consumer: Regional Differences
Northern Ireland
- Figure 23: Top ten things people are saving for, by region, NI, 2006
Republic of Ireland
- Figure 24: Top ten things people are saving for, by region, RoI, 2006
What does this mean for local branches?
Consumer: What are People Saving For?
- Figure 25: What people are saving for, NI and RoI, 2006
Saving for security
Poorer consumers save for a rainy day
- Figure 26: Top ten things people are saving for, by socio-economic group, RoI, 2006
Men save for cars, women save for holidays
- Figure 27: Top ten things people are saving for, by gender, RoI, 2006
Age determines savings priorities
- Figure 28: Top ten things people are saving for, by age, NI, 2006
Parental responsibility kicks in for 35-44-year-olds
Putting the kids through university
Older consumers more likely to save for rainy day
Saving for retirement
Saving for retirement a priority for ABC1 group
Men a key target for retirement savings accounts
Hospital bills a grey issue
Consumer: Types of Saver?
- Figure 29: Breakdown of cluster groups, NI and RoI, 2006
Northern Ireland: Types of saver overview
- Figure 30: Top ten things people are saving for, by cluster groups, NI, 2006
Committed Savers should be key target for banks
- Figure 31: Agreement with savings-related statements, by cluster groups, NI, 2006
Sceptical Savers unlikely to provide potential
Routine Savers take the long view
Financially Burdened have good intentions...
...but may need help to follow through
Republic of Ireland: Types of saver summary
- Figure 32: Top ten things people are saving for, by cluster groups, RoI, 2006
Live for Today group may provide potential
Turning good intentions into good business
- Figure 33: Agreement with savings-related statements, by cluster groups, RoI, 2006
Struggling savers attracted by instant-access accounts
Attitudes do not determine behaviour
The Future
A soft landing from the property boom desirable
Interest rates to continue to rise
Impact of Competition Commission' s proposals
Appendix
Definitions
Geographical, national and regional definitions
Conversion factors
BMRB Target Group Index sample sizes
Abbreviations
Big four banks' (NI) complaints
Banks' complaints in RoI
Additional demographic data tables
- Figure 34: Forecast population change, by age, NI, 2000-20
- Figure 35: Forecast population change, by age, RoI, 2000-20
- Figure 36: Health of the economy, NI and RoI, 2002-07
- Figure 37: Percentage in employment, by age group, NI and RoI, 2000 and 2005
- Figure 38: Average number of hours worked a week, by gender and working status, NI and RoI, 1998-2005
Ownership of savings accounts
- Figure 39: Ownership of a deposit savings account, by gender, age, socio-economic group, working status, marital status and lifestage, NI and RoI, 2006
Consumer: What Are People Saving For?
- Figure 40: Things people are saving for, by gender, NI, 2006
- Figure 42: Top ten things people are saving for, by age, RoI, 2006
Consumer Attitudes Towards Saving
- Figure 43: Agreement with selected finance statements, NI and RoI, 2006
- Figure 44: Agreement with savings-related statements, by region, NI, 2006
- Figure 45: Agreement with savings-related statements, by region, RoI, 2006

Attitudes to Savings - Ireland - May 2007

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