Table of Contents
- Issues in the Market
- Main findings of the research
- Abbreviations
- Market in Brief
- Economic downturn will impact on consumers' savings habits
- Retail savings balances totalled £1.1 billion at the end of 2008
- Lloyds Banking Group is the dominant force in the savings market
- Trade perspective: Low rates create the principal challenge
- Mintel' s research findings: Product ownership
- Mintel' s research findings: Favoured account providers
- Mintel' s research findings: Attitudes towards saving
- Internal Market Environment
- Key points
- Base rates have been reduced to an historically low level
- Figure 1: Bank of England base rate, end of quarter, Q1 1972-Q1 2009
- Savings rates have tumbled in the last few months
- Figure 2: Average quoted deposit interest rates at banks and building
societies, January 2004-February 2009
- The low-interest-rate environment creates a number of challenges
- Wholesale market turmoil has driven up demand for retail funds
- The banking crisis will continue to impact on consumer sentiment
- Raising the protection limits will have eased consumer fears
- Broader Market Environment
- Key points
- The economic downturn will impact on consumers' ability to save
- Debt repayment will increasingly become a priority
- Precautionary saving may stimulate the savings habit
- The savings ratio has actually increased in recent quarters
- Figure 3: Household savings ratio, seasonally adjusted, Q1 2004-Q4 2008
- Rising ISA allowances will provide a boost to the savings market
- Population trends will impact on demand for savings accounts
- Figure 4: UK population, by age bracket, 1992-2016
- Competitive Context
- Key points
- Deposit accounts compete with investments and everyday spending
- Stockmarket decline has hit equity-based investments
- Figure 5: FTSE 100 Index, end of month, January 1994-March 2009
- Property market downturn makes housing a less attractive option
- Figure 6: Average UK house price, seasonally adjusted, January
2006-March 2009
- Strengths and Weaknesses in the Market
- Figure 7: Strengths and weaknesses in the deposit-based savings account
market
- Strengths
- Weaknesses
- Market Size and Forecast
- Key points
- Retail savings balances totalled £1.1 billion at the end of 2008
- Figure 8: Retail savings balances outstanding, 2004-09
- A number of factors will constrain future growth in balances...
- ...but a rise in precautionary saving could stimulate the market
- The value of deposits in time accounts has grown in recent years
- Figure 9: Number and value of individual interest-bearing sight and time
accounts (MBBG only), 2003-08
- More than 30 million adults hold a deposit or savings account
- Figure 10: Ownership of deposit or savings accounts and NS&I products,
December 2008
- Cash ISAs are a key segment of the deposit-based savings market
- Figure 11: Cash ISA balances outstanding, 2003-08
- Sales of cash ISAs increased by 10% in 2008
- Figure 12: Number of mini cash ISAs receiving subscriptions and the
value of gross subscriptions, 2002/03-2007/08
- Forecast
- Balances to rise as individuals shore up savings
- Figure 13: Forecast of retail savings balances outstanding, 2004-14
- Factors used in the forecast
- Market Share
- Key points
- Lloyds Banking Group is the dominant force in the savings market
- Figure 14: Estimated deposit-based savings account volume market share,
by savings brands, December 2008
- Market concentration has increased in the last couple of years
- Figure 15: Combined volume market share of top five deposit-based
savings account providers, by financial services group, 2006 and 2008
- Companies and Products
- Key points
- There have been significant changes to the operating landscape
- The Lloyds/HBOS merger has created a savings colossus
- A number of leading banks are now partly, or wholly, in state hands
- Santander has increased its presence within the UK savings market
- Nationwide has driven consolidation in the building society sector
- Co-operative Bank and Britannia are set to form a mutual alliance
- Brand Communication and Promotion
- Key points
- Savings account providers invest heavily in advertising
- Total industry adspend amounted to £100 million in 2008
- Figure 27: Advertising expenditure on savings accounts, 2004-08
- Instant-access and regular savings accounts are heavily promoted
- Figure 28: Advertising expenditure on savings accounts, by product
categories, 2007 and 2008
- The press is the main advertising medium used by savings providers
- Figure 29: Advertising expenditure on savings accounts, by media type,
2007 and 2008
- ING Direct tops the savings account adspend table
- Figure 30: Advertising expenditure on savings accounts, by organisation,
2007 and 2008
- Channels to Market
- Key points
- Combined branch network has declined by a fifth in the last decade
- Figure 31: UK bank and building society combined branch networks,
1997-2007
- Telephone and internet continue to gain in popularity
- Figure 32: Number of personal customers registered to access accounts,
by telephone and computer (MBBG only), 2002-07
- The branch will retain a key position in the distribution mix...
- ...although the trend to multichannel strategies will continue
- The Consumer -- Product Ownership
- Key points
- Survey background
- More than six in ten adults hold a deposit or savings account
- Figure 33: Ownership of savings and investment products, December 2008
- Almost eight in ten ABC1 over-55s own a savings account
- Figure 34: Savings and investment ownership, by gender, age and
socio-economic group, December 2008
- A large proportion of homeowners hold a deposit account
- Figure 35: Savings and investment ownership, by marital status,
lifestage, ACORN group, working status, income and household tenure,
December 2008
- Most M&S and Waitrose customers own a savings account
- Figure 36: Savings and investment ownership, by TV region, technology
users, newspaper readership and supermarket usage, December 2008
- Six in ten 35-44-year-olds hold an instant-access account
- Figure 37: Deposit-based savings ownership, by gender, age and
socio-economic group, December 2008
- A third of consumers hold more than one type of savings account
- Figure 38: Number of types of deposit-based savings account held, by
consumers, December 2008
- A quarter of the single-product group hold a cash ISA
- Figure 39: Ownership of deposit-based savings accounts, by number of
types of deposit-based savings account held, December 2008
- Almost half of instant-access account holders also own a cash ISA
- Figure 40: Ownership of deposit-based savings accounts, by deposit-based
savings products, December 2008
- The Consumer -- Favoured Account Providers
- Key points
- A fifth of savers hold an account with Halifax
- Figure 41: Proportion of adult savers who hold a deposit account with
each savings provider, December 2008
- HSBC has a comparatively young customer profile
- Figure 42: Proportion of adult savers who hold a deposit account with
the leading players, by gender, age and socio-economic group, December 2008
- Nationwide has a strong bias towards ABC1 third age savers
- Figure 43: Proportion of adult savers who hold a deposit account with
the leading players, by marital status, lifestage, Mintel' s Special Groups,
ACORN group and TV region, December 2008
- A fifth of broadsheet readers hold a savings account with Barclays
- Figure 44: Proportion of adult savers who hold a deposit account with
the leading players, by working status, income, household tenure, technology
users and newspaper readership, December 2008
- Almost three in ten ' wealthy' savers hold an account with Halifax
- Figure 45: Proportion of adult savers who hold a deposit account with
the leading players, by total value of savings and investments, December 2008
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