Published on : May 05, 2016
ALBANY, New York, May 05, 2016: In the recent past, inflation has resulted in low returns on balances and wages in the United Kingdom. This has made it problematic for British consumers to save more money. Also, increasing consumer spending has resulted in low savings. In the U.K., retail deposits are expected to rise at a 4.0% CAGR from 2015 to 2019, to reach GPB1,484 bn by 2019 as compared to 8.0% during the period between 2000 and 2007. In the next few years, banks are expected to use a different strategy in order to significantly grow their source of funding.
Personal deposits are predicted to make a slow recovery in the next few years as the economic outlook is expected to remain fragile. The interest rates offered by fixed-term accounts are falling and this has made long-term savings less attractive to customers. Irrespective of this, service providers are focusing on assisting consumers to save more money as they aim to build a better buffer against an uncertain financial future. The U.K. savings industry is expected to welcome new banks, which has encouraged a competitive environment. Mobile has become a crucial channel for retail financial services. Mobile applications and new secure mobile-optimized websites are two of the popularly used platforms by banks to offer retail financial services.
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Banks are planning to motivate customers to save more by keeping goal-based saving targets. By doing so, banks are targeting to engage with them in a better way. For instance, if consumers are planning to save money for a vacation, banks are expected to offer better deals on foreign exchange and travel insurance. With this, the retail savings market in the U.K. is expected to progress slowly. In the years to come, deposit accounts are predicted to remain the U.K.’s favored asset class for savings. However, factors such as stagnant unemployment rate and declining wage growth are predicted to hamper the growth of the U.K. savings industry in the near future. New rules and regulations from the banks and financial service providers are expected to change the entire landscape of the U.K. savings.
Changing trends in the U.K. savings industry are expected to make the market highly competitive in the next few years. Leading service providers are encouraging new trends in the U.K. savings industry. The Personal Savings Allowance is expected to propel the U.K. savings industry in the years to come. Lloyds Banking Group has retained its authority in the U.K. retail savings market. Lloyds bank’s Swave application encourages consumers to save little money often. Service providers are expected to harness mobile capacities to attract new savers. Dyme is aiming to encourage millennials to save money. Further, leading players in the U.K. savings industry are expected to introduce other personal financial management applications, which would drive better savings. HSBC’s Nudge application helps consumers to save more money by being aware of personal spending habits.
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