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Consumers, Saving and Investing - UK - January 2017

“The convenience of being able to easily access savings and investments online is now just as important as fees charged and rates paid, which means that providers who develop the most effective finance management apps and dashboards will be less vulnerable to competitor price moves.”
Paul Davies, Senior Financial Services Analyst

This report looks at the following areas:

  • Brexit uncertainty adds an extra sense of caution
  • Balancing physical and digital demands
  • Investing: a rich man's game?

By drawing on Mintel’s exclusively commissioned research, this Report examines the savings and investment markets for retail consumers. It considers consumer attitudes towards saving and investment markets, as well as market conditions to identify the challenges and opportunities presented to providers operating in this market.

With this in mind the Report looks at current ownership of savings and investment products as well as the value of people’s savings and investments. It also highlights consumers’ reasons for saving and investing, the ways in which they contribute funds, what influences their choice of provider and finally interest in new-to-market digital tools and services that look to help people manage their financial products.

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Table of contents

  1. Overview

    • What you need to know
      • Scope of this Report
      • Executive Summary

          • The market
            • Retail deposits show steady growth
              • Figure 1: Total retail savings deposits, 2006-16*
            • Base rate cut to record low
              • Figure 2: UK’s consumer price index and base rate, January 2006 – November 2016
            • EU referendum vote caused mass investment exodus
              • Lifetime ISAs: the pension alternative?
                • The consumer
                  • Consumers seek familiarity in turbulent times
                    • Figure 3: Consumer ownership of savings products, October 2015 and October 2016
                  • Almost 1 in 3 people look for better returns
                    • Figure 4: Consumer ownership of investment products, October 2015 and October 2016
                  • Majority of consumers have a buffer
                    • Figure 5: Value of savings and investments, October 2015 and October 2016
                  • Size and timing of contributions tends to be spontaneous
                    • Figure 6: Methods of contributing towards savings or investments, October 2016
                  • Low interest rates polarise consumers
                    • Figure 7: Attitudes towards saving and investing, October 2016
                  • Online management tools now crucial to savers and investors
                    • Figure 8: Important factors when choosing a savings or investment provider, October 2016
                  • What we think
                  • Issues and Insights

                    • Brexit uncertainty adds an extra sense of caution
                      • The facts
                        • The implications
                          • Balancing physical and digital demands
                            • The facts
                              • The implications
                                • Investing: a rich man’s game?
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Retail deposits show steady growth
                                        • EU referendum vote caused mass investment exodus
                                          • Base rate cut to record low
                                            • Saving ratio still lags behind pre-recession levels
                                              • Lifetime ISAs: the pension alternative?
                                                • Government announces Help to Save scheme
                                                  • FAMR seeks to bridge the advice gap
                                                  • Saving and Investment Market Size

                                                    • Retail deposits show steady growth
                                                      • Figure 9: Total retail savings deposits, 2006-16*
                                                    • Premium Bonds limit upped to £50k
                                                        • Figure 10: Retail savings deposits, 2006-16*
                                                      • Stocks and shares ISAs hit record high
                                                        • Figure 11: Volume and value of ISA subscriptions, by type of ISA, 2010/11-2015/16
                                                      • EU referendum vote caused mass investment exodus
                                                        • Figure 12: Retail sales of unit trusts and OEICs – UK-domiciled, 2012-16
                                                      • Buy-to-let market hit by tax increases
                                                          • Figure 13: Number of loans for buy-to-let house purchases in the UK, January 2013 – September 2016
                                                      • The Saving and Investing Environment

                                                        • Base rate cut to record low
                                                            • Figure 14: UK’s consumer price index and base rate, January 2006 – November 2016
                                                          • Saving ratio still lags behind pre-recession levels
                                                            • Figure 15: Quarterly variations in savings ratio, Q1 2006 – Q2 2016
                                                          • Consumers’ cautious mindset
                                                            • Figure 16: Trends in saving activity, June 2012 – October 2016
                                                          • Investing remains a niche activity
                                                              • Figure 17: Sources of investment advice, by ownership of investment products, April 2015
                                                          • The Regulatory Environment

                                                            • Lifetime ISAs: the pension alternative?
                                                              • Figure 18: Awareness and interest in Lifetime ISAs, September 2016
                                                            • Government announces Help to Save scheme
                                                              • FSCS limit restored to £85,000
                                                                • FAMR seeks to bridge the advice gap
                                                                    • Figure 19: Attitudes towards robo-advice services, February 2016
                                                                • The Consumer – What You Need to Know

                                                                  • Nearly two fifths of consumers now have a workplace pension
                                                                    • Almost 1 in 3 people look for better returns
                                                                      • Almost half of savers do so out of caution
                                                                        • Low interest rates polarise consumers
                                                                          • Brexit uncertainty simply adds to existing investment barriers
                                                                            • Online management tools now crucial to savers and investors
                                                                              • More than half of adults interested in digital innovations
                                                                              • Consumer Ownership of Savings Products

                                                                                • Consumers seek familiarity in turbulent times
                                                                                  • Auto-enrolment widens the workplace pension net
                                                                                      • Figure 20: Consumer ownership of savings products, October 2015 and October 2016
                                                                                    • Millennials: a tale of two halves
                                                                                        • Figure 21: Consumer ownership of savings products, by generation, October 2016
                                                                                      • More than half of consumers have multiple savings products
                                                                                          • Figure 22: Repertoire of consumer ownership of savings products, October 2015 and October 2016
                                                                                      • Consumer Ownership of Investment Products

                                                                                        • Almost 1 in 3 people look for better returns
                                                                                            • Figure 23: Consumer ownership of investment products, October 2015 and October 2016
                                                                                          • Lowering the complexity barriers for the risk-averse
                                                                                              • Figure 24: Consumer ownership of any investment product(s), by gender and generation, October 2016
                                                                                          • Value of Savings and Investments

                                                                                            • Majority of consumers have a buffer
                                                                                              • Figure 25: Value of savings and investments, October 2015 and October 2016
                                                                                            • Nearly a fifth of 45-64s have no cash assets
                                                                                              • Figure 26: Value of savings and investments, by age, October 2016
                                                                                            • Saving to get on the property ladder
                                                                                              • Figure 27: Value of savings and investments, by housing situation, October 2016
                                                                                            • Tailoring products for low value savers
                                                                                            • Methods of Contributing to Savings

                                                                                              • Size and timing of contributions tends to be spontaneous
                                                                                                  • Figure 28: Methods of contributing towards savings or investments, October 2016
                                                                                                • Young and wealthy most likely to plan ahead
                                                                                                  • Figure 29: Methods of contributing towards savings or investments, by age and gross annual household income, October 2016
                                                                                                  • Figure 30: Squirrel budgeting app UI
                                                                                              • Reasons for Saving

                                                                                                • Almost half of savers do so out of caution
                                                                                                    • Figure 31: Reasons for saving, October 2016
                                                                                                  • ‘Buy now pay later’
                                                                                                    • Mission-based budgeting tools will appeal to most savers
                                                                                                      • Figure 32: Repertoire of reasons for saving, October 2016
                                                                                                  • Reasons for Investing

                                                                                                    • Two fifths of investors planning for retirement
                                                                                                      • Figure 33: Reasons for investing, October 2016
                                                                                                    • Thrill of risk-taking appeals most to young men
                                                                                                      • Figure 34: Reasons for investing, by gender and age, October 2016
                                                                                                      • Figure 35: Moneybox app UI, 2016
                                                                                                  • Attitudes towards Saving and Investing

                                                                                                    • Low interest rates polarise consumers
                                                                                                      • Peer-to-peer lending appeals to the more affluent
                                                                                                        • Figure 36: Attitudes towards saving and investing, October 2016
                                                                                                      • Brexit uncertainty simply adds to existing investment barriers
                                                                                                        • CHAID analysis
                                                                                                          • City-based parents the most likely to consider alternative investments
                                                                                                              • Figure 37: Consumers sentiment towards savings and investing– CHAID – Tree output, October 2016
                                                                                                          • Important Factors when Choosing Provider

                                                                                                            • Online management tools now crucial to savers and investors
                                                                                                              • Established brands continue to hold sway with savers
                                                                                                                • Figure 38: Important factors when choosing a savings or investment provider, October 2016
                                                                                                              • Young men still like assurance of human advice
                                                                                                                  • Figure 39: Important factors when choosing a savings or investment provider, by gender and age, October 2016
                                                                                                              • Interest in Digital Innovations

                                                                                                                • More than half of adults interested in digital innovations
                                                                                                                    • Figure 40: Interest in digital saving and investing innovations, October 2016
                                                                                                                  • Digital trackers can provide an extra touch point
                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                      • Abbreviations
                                                                                                                        • Consumer research methodology
                                                                                                                          • CHAID analysis methodology
                                                                                                                            • Figure 41: Consumers sentiment towards saving and investing – CHAID – Table output, October 2016

                                                                                                                        Companies Covered

                                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                                        Consumers, Saving and Investing - UK - January 2017

                                                                                                                        US $2,940.64 (Excl.Tax)