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SAVINGS & RETIREMENT PLANNING - IRELAND - NOVEMBER 2017

Published By :

Mintel

Published Date : Dec 2017

Category :

Banking

No. of Pages : N/A

With precautionary saving being the leading motivation behind both NI and RoI consumers saving activity, it is evident that Irish consumers are conscious of the need to prepare for the future. Despite this, there is a clear deficit between awareness of the need to prepare and actual preparation when it comes to retirement planning. There is an ongoing challenge facing the industry to continually promote and educate.

Table of contents
OVERVIEW
What you need to know
Issues covered in this Report
Definitions
EXECUTIVE SUMMARY
The market
Figure 1: Total deposits from private households, IoI, RoI and NI, 2012-22
Forecast
Figure 2: Index of total deposits from private households, actual, estimated, forecast and projected, RoI and NI, 2012-22
Market factors
Economic growth and job creation in NI and RoI
29% of NI and 22% of RoI consumers well placed to save and invest
Consumer confidence faring well, but spectre of Brexit having impact
Little financial return on saving due to low interest rates
Whos innovating?
The consumer
20% of NI and 17% of RoI consumers have no savings at all
Figure 3: Amount that consumers currently have in savings and investments (excluding the value of your main home and any pension savings), NI and RoI, October 2017
Around two thirds of consumers have a basic savings account
Figure 4: Ownership of savings and investments products, RoI and NI, October 2017
Consumers saving for rainy days, holidays, celebrations and retirement
Figure 5: Main reasons for saving by consumers, NI and RoI, October 2017
Sense that retirement is changing, and preparations not ideal
Figure 6: Agreement with statements relating to savings and retirement, NI and RoI, October 2017
What it means
THE MARKET WHAT YOU NEED TO KNOW
Economic growth and job creation in NI and RoI
29% of NI and 22% of RoI consumers well placed to save and invest
Consumer confidence faring well, but spectre of Brexit having impact
Little financial return on saving due to low interest rates
MARKET SIZE AND FORECAST
Irish consumers savings total almost 143 billion in 2017
Figure 7: Total deposits from private households, IoI, RoI and NI, 2012-22
Total value of savings to top 163 billion by 2022
Figure 8: Index of total deposits from private households, actual, estimated, forecast and projected, RoI and NI, 2012-22
MARKET DRIVERS
Economic growth continuing in RoI, while unemployment falls
Figure 9: Key economic indicators, RoI, actual, estimated and forecast, 2016-18
Figure 10: Labour market summary, RoI, estimated and forecast, 2016-18
Brexit uncertainties looming, but NI economy still growing
Figure 11: Economic growth, annual % increase, estimated and forecast, NI and UK, 2017-19
Figure 12: Unemployment rate, NI, estimated and forecast, 2017 and 2018
Around a quarter of consumers can afford to easily add to savings
Figure 13: How consumers rate their own financial health, NI and RoI, November 2017
Increase over last two years in number of consumers with healthy finances
Figure 14: Consumers who rate their own financial health as being healthy, NI and RoI, November 2015 and November 2017
Looming Brexit shadow affecting RoI consumer confidence
Figure 15: Consumer sentiment Index Survey results, RoI, October 2016 and October 2017
Uncertainty taking its toll on NI consumer confidence
Savings ratio in NI and RoI lagging international norms
Figure 16: Personal savings %, EU, eurozone, UK (incl. NI) and RoI, June 2017*
Low return on savings likely discouraging many would-be savers
Figure 17: If consumers are considering applying for a mortgage within the next 12 months, NI and RoI, January 2017
COMPANIES AND BRANDS WHAT YOU NEED TO KNOW
Some savers in UK worse off as commercial banks fail to pass on rise in interest rates
AIB and KBC cut interest rates on several accounts
Bank of Ireland becomes first Irish institution to charge for placing cash on deposit
HSBC trails open API app to help consumers manage money
Ulster Bank to remove hard credit searches which can damage customer credit rating
WHOS INNOVATING?
The Innovative ISA
Bitcoin savings accounts
BSave
Magnr
COMPANIES AND BRANDS
Allied Irish Bank (RoI) / First Trust Bank (NI)
Key facts
Savings products
Recent developments
Bank of Ireland
Key facts
Savings products
Recent developments
Danske Bank
Key facts
Savings products
An Post (RoI Only)
Key facts
Savings products
Halifax (NI Only)
Key facts
Savings products
HSBC (NI Only)
Key facts
Savings products
Recent developments
KBC (RoI Only)
Key facts
Savings products
Recent developments
Nationwide (NI Only)
Key facts
Savings products
Permanent TSB (RoI Only)
Key facts
Savings products
Santander (NI Only)
Key facts
Savings products
Post Office (NI Only)
Key facts
Savings products
Ulster Bank
Key facts
Savings products
Recent developments
THE CONSUMER WHAT YOU NEED TO KNOW
20% of NI and 17% of RoI consumers have no savings at all
Around two thirds of consumers have a basic savings account
Consumers saving for rainy days, holidays, celebrations and retirement
Sense that retirement is changing, and preparations not ideal
THE CONSUMER VALUE OF SAVINGS
Around a fifth of all Irish consumers have no savings at all
Figure 18: Amount that consumers currently have in savings and investments (excluding the value of your main home and any pension savings), NI and RoI, October 2017
Women particularly in NI more likely to be without savings
Figure 19: Consumers who currently have no savings or investments, by gender, NI and RoI, October 2017
Only one in 10 over-55s are without savings or investments
Figure 20: Consumers who currently have no savings or investments, by age, NI and RoI, October 2017
Employment a significant factor in ability to save
Figure 21: Consumers who currently have no savings or investments, by work status, NI and RoI, October 2017
Social class and household income major factors in saving
Figure 22: Consumers who currently have no savings or investments, by social class, NI and RoI, October 2017
Figure 23: Consumers who currently have no savings or investments, by gross annual household income, NI and RoI, October 2017
Fair increase in number of NI consumers with no savings or investments
Figure 24: Consumers who currently have no savings or investments, NI and RoI, 2015 and 2017
Increase in number of NI consumers with low-level savings
Figure 25: Amount that consumers currently have in savings and investments (excluding the value of your main home and any pension savings), NI, 2015 and 2017
RoI consumers savings holding steady
Figure 26: Amount that consumers currently have in savings and investments (excluding the value of your main home and any pension savings), RoI, 2015 and 2017
THE CONSUMER OWNERSHIP OF SAVINGS AND INVESTMENT PRODUCTS
Basic savings account most popular product among all consumers
Figure 27: Ownership of savings and investments products, RoI and NI, October 2017
Savings accounts holding across-the-board appeal for Irish consumers
Figure 28: Ownership of savings accounts (excluding post office accounts), by gender, age and social class, RoI and NI, October 2017
Company pensions owned by wealthy, older men in employment
Figure 29: Ownership of company pension, by gender and age, RoI and NI, October 2017
Figure 30: Ownership of company pension, by work status, RoI and NI, October 2017
Figure 31: Ownership of company pension, by social class and gross annual household income, RoI and NI, October 2017
Self-employed, men, over-55s, high incomes opting for personal pensions
Figure 32: Ownership of personal pension, by gender and age, RoI and NI, October 2017
Figure 33: Ownership of personal pension, by social class and gross annual household income, RoI and NI, October 2017
Figure 34: Ownership of personal pension, by work status, RoI and NI, October 2017
Firm preference for cash over stocks and shares when buying an ISA
Figure 35: Ownership of ISAs, cash and stocks & shares, by gender, age and social class, NI, October 2017
Men, over-55s, self-employed, wealthy putting cash into equities
Figure 36: Ownership of individual company shares, by gender and age, RoI and NI, October 2017
Figure 37: Ownership of individual company shares, by work status, RoI and NI, October 2017
Figure 38: Ownership of individual company shares, by social class and gross annual household income, RoI and NI, October 2017
THE CONSUMER REASONS FOR SAVING
Majority of savers are saving out of precaution
Figure 39: Main reasons for saving by consumers, NI and RoI, October 2017
Appeal of rainy day fund extends across all consumers
Self-employed consumers especially inclined towards precautionary saving
Figure 40: Consumers who are saving for a rainy day, by work status, NI and RoI, October 2017
Women more likely to be saving to pay for a holiday
Figure 41: Consumers who are saving to pay for a holiday, by gender and age, NI and RoI, October 2017
Young C2DEFs and women saving for celebrations and presents
Figure 42: Consumers who are saving to pay for Christmas or birthday presents/celebrations, by gender, age and social class, NI and RoI, October 2017
Self-employed, in particular, saving for retirement
Figure 43: Consumers who are saving to prepare for retirement, by gender, work status and social class, NI and RoI, October 2017
Almost a quarter of consumers saving for a home improvement
Figure 44: Consumers who are saving to pay for home improvements (eg extension, new kitchen etc), by gender and age, NI and RoI, October 2017
while many of these same consumers are saving for a large purchase
Figure 45: Consumers who are saving to pay for a large purchase, by gender and age, NI and RoI, October 2017
Saving for education or medical expenses far more common in RoI
Figure 46: Consumers who are saving for medical expenses, educational expenses or qualifications/training, NI and RoI, October 2017
Consumers aged 18-24 with heavy internet use saving to purchase cars
Figure 47: Consumers who are saving for a new car/vehicle, by age and daily internet use, NI and RoI, October 2017
THE CONSUMER AGREEMENT WITH STATEMENTS
Concern and wariness dominate consumers attitudes towards retirement
Figure 48: Agreement with statements relating to savings and retirement, NI and RoI, October 2017
Sense among consumers that the nature of retirement is changing
Figure 49: Agreement with statements relating to changes in retirement, NI and RoI, October 2017
State pension no longer determines retirement age, but still matters
Figure 50: Agreement with statements relating to state pension and state retirement age, NI and RoI, October 2017
Question marks over consumers level of preparedness for retirement
Figure 51: Agreement with statements relating to preparedness for retirement, NI and RoI, October 2017
Uncertainty and lack of confidence when it comes to retirement planning
Figure 52: Agreement with statements relating to savings and retirement, NI and RoI, October 2017
APPENDIX DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Abbreviations

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