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CONSUMERS, SAVING AND INVESTING - UK - JANUARY 2018

Published By :

Mintel

Published Date : Jan 2018

Category :

Banking

No. of Pages : N/A

Financial pressures will make it increasingly difficult to save going forward. Providers can help people by offering budgeting and financial management tools that can increase engagement and offer insights into where they can make savings.

Table of Contents

OVERVIEW
What you need to know
Report scope
EXECUTIVE SUMMARY
The market
Savings growth slows in 2017
Figure 1: Total retail savings deposits, 2007-17
Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
Rising inflation triggers first base rate increase
Figure 2: UK’s consumer price index, base rate and average weekly earnings growth, September 2008-September 2017
Falling savings ratio
Figure 3: Quarterly gross household savings and savings ratio, seasonally adjusted and at current prices, Q1 2013-Q1 2017
FCA publishes final report on asset management market study
Help to Save aims to improve savings activity
The consumer
Housing situation reflects big differences in savings
Figure 4: Value of savings and investments, October 2017
Standard cash accounts more popular than ISAs
Figure 5: Savings and investment product ownership, October 2017
Emergencies/unexpected events are the most common reason to save
Figure 6: Saving priorities, October 2017
Over half haven’t saved as much as they planned over the last year
Figure 7: Attitudes towards managing savings, October 2017
Online application and management are key for new customers
Figure 8: Important factors when choosing a savings or investment provider, October 2017
Benefits other than interest highlight a chance to personalise products
Figure 9: Interest in new savings account features, October 2017
Rising rates could lead to increased switching activity
Figure 10: Attitudes towards the current savings environment, October 2017
Ability to customise investments is important
Figure 11: Attitudes towards the current investing environment, October 2017
What we think
ISSUES AND INSIGHTS
Majority are just trying to meet their savings goals
The facts
The implications
Aggregation apps can offer more beneficial insights around savings behaviour
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Savings growth slows in 2017
Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
Rising inflation triggers first base rate increase
FCA publishes final report on asset management market study
Help to Save aims to improve savings activity
SAVINGS AND INVESTMENT MARKET SIZE
Savings growth slows in 2017
Figure 12: Total retail savings deposits, 2007-17
Cash subscriptions fall whilst stocks and shares rise slightly
Figure 13: Number of ISAs and amounts subscribed, segmented by component type, 2010/11-2016/17
Gross sales of unit trusts and OEICs rise by an estimated 26% in 2017
Figure 14: Retail sales of unit trusts and OEICs – UK-domiciled, 2013-17
THE SAVINGS AND INVESTMENT ENVIRONMENT
Rising inflation triggers first base rate increase
Figure 15: UK’s consumer price index, base rate and average weekly earnings growth, September 2008-September 2017
Some providers failing to pass on increase to customers
Falling savings ratio
Figure 16: Quarterly gross household savings and savings ratio, seasonally adjusted and at current prices, Q1 2013-Q1 2017
Proportion who say they have saved has fallen
Figure 17: Trends in savings activity, June 2012-August 2017
A fall in confidence could boost saving
THE REGULATORY ENVIRONMENT
FCA publishes final report on asset management market study
Government to publish long-term strategy for asset management industry
MiFID II comes into force
Help to Save aims to improve savings activity
Cash savings market study
THE CONSUMER – WHAT YOU NEED TO KNOW
Housing situation reflects big differences in savings
Emergencies/unexpected events are the most common reason to save
Over half haven’t saved as much as they planned over the last year
Online application and management are key for new customers
Benefits other than interest highlight a chance to personalise products
Ability to customise investments is important
VALUE OF SAVINGS AND INVESTMENTS
A third have less than £500 or no savings or investments
Employers can do more to increase savings activity
Figure 18: Value of savings and investments, October 2017
Housing situation reflects big differences in savings
Figure 19: Value of savings and investments, by housing situation, October 2017
SAVINGS AND INVESTMENT PRODUCT OWNERSHIP
Standard cash accounts more popular than ISAs
Figure 20: Savings and investment product ownership, October 2017
One in five own an investment product
Stocks and shares ISAs offer an entry point for beginners
Figure 21: Savings and investment product ownership, by value of savings and investments, October 2017
Nearly half have two or more savings and investment products
PFM apps can make it easier to manage multiple accounts
Figure 22: Repertoire of savings and investment product ownership, October 2017
SAVING PRIORITIES
Emergencies/unexpected events are the most common reason to save
Figure 23: Saving priorities, October 2017
Young Millennials balancing short and long-term savings goals
More focus needs to be placed on saving for retirement
Figure 24: Saving priorities, by generation, October 2017
18-24-year-olds have fewer savings goals…
…whilst 25-34-year-olds need help juggling their savings goals
Figure 25: Repertoire of saving priorities, by age, October 2017
SAVINGS MANAGEMENT
Over half haven’t saved as much as they planned over the last year
Figure 26: Attitudes towards managing savings, October 2017
Two in five mostly manage their savings via mobile
Figure 27: Agreement with the statement ‘I mostly manage my savings through mobile banking’, by age, October 2017
PFMs need to offer the flexibility of people’s own spreadsheet designs
Figure 28: Agreement with the statement ‘I use a spreadsheet to help me keep track of my saving and investing’, by savings and investment product ownership, October 2017
CHOOSING A SAVINGS OR INVESTMENT PROVIDER
Online application and management are key for new customers
Figure 29: Important factors when choosing a savings or investment provider, October 2017
Importance of brand means incumbent brands likely to retain share
Higher-value savers will demand more
Figure 30: Important factors when choosing a savings or investment provider, by value of savings and investments, October 2017
INTEREST IN SAVINGS ACCOUNT INNOVATION
Two in five want product recommendations
Figure 31: Interest in new savings account features, October 2017
Benefits other than interest highlight a chance to personalise products
One in four are interested in goal-based accounts
Figure 32: Interest in new savings account features, by age, October 2017
Consumers are open to more communication
ATTITUDES TOWARDS SAVING
Rising rates could lead to increased switching activity
Figure 33: Attitudes towards the current savings environment, October 2017
Open Banking can help people to improve their savings activity
Figure 34: Response to ‘I plan to save more over the next 12 months than in the last 12 months’, by agreement with ‘I haven't saved as much as I planned to over the last 12 months’, October 2016
ATTITUDES TOWARDS INVESTING
Ability to customise investments is important
Figure 35: Attitudes towards the current investing environment, October 2017
Most have not been put off by Brexit uncertainty
Greater returns mean people still expect to move cash into investments
Figure 36: Agreement with the statement ‘I expect to move cash savings into investments in the next 12 months’, by age, October 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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