Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Current, Packaged and Premium Accounts - UK - June 2010

  • One in six current account holders have a fee-charging packaged account, but twice as many consumers (36%) are prepared to pay a ‘small fee’ for certain benefits. There is still scope to expand this segment of the market.
  • Over two fifths of packaged account holders pay more than £10 a month. Unless they’re convinced that they’re getting full value, there’s a strong chance that some of them could start to resent this fee.
  • The benefits that are most widely used, and thus valued, by packaged account customers are card protection and annual travel insurance.
  • People are unlikely to switch to one of the new entrants to the market just because they are ‘new’ and untainted by the recent financial crisis. Instead, it would take a cash incentive (48%), online and telephone banking (45%) and a competitive rate on credit balances (31%).
  • Tesco Bank and Virgin Money pose the greatest threat to incumbent providers, with nearly one in four current account holders prepared to switch to them should they start offering current accounts. Men, those aged 25-44 and those on mid-to-high incomes would be most prepared to switch to one of these brands.
  • A lack of consumer awareness means that Metro Bank and Walton & Co face a much tougher challenge, with just 4% and 3% prepared to consider switching to them respectively.

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Issues in the Market

      • Key issues
        • Market definitions
          • Abbreviations
          • Future Opportunities

            • Moving new brands into the market
              • Winning the ‘main’ share of the customer’s wallet…
                • …and harnessing the power of social media
                  • The future is mobile
                  • Market in Brief

                    • Size of the personal current account market
                      • Influencing factors and trading environment
                        • Regulatory and political developments
                          • Leading providers
                            • Figure 1: Share of ‘main’ customers, by largest banking groups, 2010
                          • Cross-selling activity and recent product development
                            • Distribution trends
                              • Advertising activity
                                • The key findings of Mintel’s consumer research
                                  • The most common and most used packaged account benefits
                                    • Figure 2: Ownership and use of benefits – fee-charging packaged account customers only, March 2010
                                    • Figure 3: Interest in and willingness to pay for packaged account benefits, March 2010
                                  • Assessing newcomer threat
                                    • Most persuasive switching factors
                                    • Internal Market Environment

                                      • Key points
                                        • Overdraft rates rise despite a low base rate
                                          • Figure 7: Monthly overdraft interest rate versus official bank rate, January 2005-March 2010
                                        • Cost of card fraud falls, but online banking losses rise
                                          • Regulation round-up
                                            • Future banking reform
                                            • Broader Market Environment

                                              • Key points
                                                • Summary of the economic backdrop: Uncertainty reigns
                                                  • The downturn has created fresh challenges
                                                    • Rising cost of bad debt
                                                      • Interest rates will inevitably rise
                                                        • Confidence remains fragile
                                                          • Figure 4: GfK Consumer Confidence Barometer – UK, January 1988-April 2010
                                                        • Consumer spending fell in 2009
                                                          • The overall population continues to grow
                                                            • Figure 5: Size of the UK population, by age, 2001-20
                                                          • Nearly 70% of British adults now have broadband access
                                                            • Figure 6: Broadband and internet penetration – GB, 2004-09
                                                        • Competitive Context

                                                          • Key points
                                                            • Savings accounts are the most commonly cross-sold product
                                                              • Figure 8: Proportion of peoople who hold additional products with their current account provider, September 2009
                                                            • Credit cards and loans also record fairly high cross-sell conversion rates
                                                              • Figure 9: Current account cross-selling conversion rates, by product type, September 2009
                                                            • Nationwide reigns supreme in the savings arena
                                                              • Figure 10: Proportion of people who hold additional products with their current account provider, by brand, September 2009
                                                            • Plastic card usage
                                                              • Prepaid cards may compete, but they also complement existing portfolios
                                                                • Main target markets
                                                                  • Closed versus open loop
                                                                    • Product outlook
                                                                    • Market SWOT Analysis

                                                                        • Figure 11: UK current account market – SWOT analysis, 2010
                                                                    • Who’s Innovating?

                                                                      • Key points
                                                                        • Round-up of recent product developments
                                                                          • Halifax extends its ‘Rewards’ programme
                                                                            • Santander adds to its ‘Zero’ range with a new current account
                                                                              • Alliance & Leicester lures switchers with a cash reward
                                                                                • HSBC enhances its current account range
                                                                                  • Nationwide offers “more” to its main FlexAccount customers
                                                                                  • Market Size

                                                                                    • Key points
                                                                                      • Product availability
                                                                                        • The size of the market continues to grow steadily
                                                                                          • Figure 12: Number of current account holders and number of current accounts, 2007-09
                                                                                        • The ‘free banking’ model dominates
                                                                                          • Figure 13: Proportional distribution of personal current accounts, by type – established banks only, 2006
                                                                                        • There are some eight million basic bank accounts
                                                                                          • Current accounts provide an important revenue stream for retail banks…
                                                                                            • Figure 14: Proportional distribution of retail banking revenue, by product area, 2006
                                                                                          • …with the greatest share of income coming from net credit interest
                                                                                            • Figure 15: Breakdown of personal current account revenue, by main income stream, 2006
                                                                                        • Market Share

                                                                                          • Key points
                                                                                            • Lloyds TSB has the largest share of ‘main’ current account customers
                                                                                              • Figure 16: Main current account provider, by individual brand, 2009 and 2010
                                                                                              • Figure 17: Main current account provider, by type of account, March 2010
                                                                                            • Top five banking groups control over four fifths of the market
                                                                                              • Figure 18: Share of main current account holder customer base, by banking group (top seven only), March 2010
                                                                                            • Barclays claims second place in the packaged account market
                                                                                              • Figure 19: Share of main packaged account holder customer base, by banking group (top six only), March 2010
                                                                                          • New Challenger Brands

                                                                                            • Key points
                                                                                              • Crisis has transformed the banking landscape
                                                                                                • RBS and Lloyds set to divest assets and give up share
                                                                                                  • New entrants emerge to crack the current oligopoly
                                                                                                    • Home and Savings Bank
                                                                                                      • Metro Bank
                                                                                                        • Post Office
                                                                                                          • Triodos
                                                                                                            • Tesco Bank
                                                                                                              • Virgin Money
                                                                                                                • Walton & Co
                                                                                                                  • Are non-traditional financial providers better at customer service?
                                                                                                                  • Companies and Products

                                                                                                                      • Barclays
                                                                                                                          • Figure 20: Barclays’ current account range, May 2010
                                                                                                                          • Figure 21: Segmentation of Barclays' adspend, year ending January 2010
                                                                                                                        • Co-operative Financial Services
                                                                                                                            • Figure 22: The Co-operative Bank’s current account range, May 2010
                                                                                                                            • Figure 23: smile’s current account range, May 2010
                                                                                                                            • Figure 24: Segmentation of CFS’ adspend, year ending January 2010
                                                                                                                          • HSBC
                                                                                                                              • Figure 25: HSBC’s current account range, May 2010
                                                                                                                              • Figure 26: First Direct’s current account range, May 2010
                                                                                                                              • Figure 27: Segmentation of HSBC's adspend, year ending January 2010
                                                                                                                              • Figure 28: Segmentation of First Direct's adspend, year ending January 2010
                                                                                                                            • Lloyds Banking Group
                                                                                                                                • Figure 29: Lloyds TSB’s current account range, May 2010
                                                                                                                                • Figure 30: Halifax’s/Bank of Scotland’s current account range, May 2010
                                                                                                                                • Figure 31: Segmentation of Lloyds TSB’s adspend, year ending January 2010
                                                                                                                                • Figure 32: Segmentation of Halifax’s adspend, year ending January 2010
                                                                                                                                • Figure 33: Segmentation of Bank of Scotland’s adspend, year ending January 2010
                                                                                                                              • Nationwide Building Society
                                                                                                                                  • Figure 34: Nationwide’s current account range, May 2010
                                                                                                                                  • Figure 35: Segmentation of Nationwide Building Society’s adspend, year ending January 2010
                                                                                                                                • National Australia Bank
                                                                                                                                    • Figure 36: Clydesdale’s and Yorkshire Bank’s current account range, May 2010
                                                                                                                                  • RBS/NatWest
                                                                                                                                      • Figure 37: RBS’ current account range, May 2010
                                                                                                                                      • Figure 38: NatWest’s current account range, May 2010
                                                                                                                                      • Figure 39: Segmentation of NatWest’s adspend, year ending January 2010
                                                                                                                                      • Figure 40: Segmentation of RBS’ adspend, year ending January 2010
                                                                                                                                    • Grupo Santander
                                                                                                                                        • Figure 41: Santander’s current account range, May 2010
                                                                                                                                        • Figure 42: A&L’s current account range, May 2010
                                                                                                                                        • Figure 43: Segmentation of Santander’s adspend, year ending January 2010
                                                                                                                                        • Figure 44: Segmentation of Alliance & Leicester’s adspend, year ending January 2010
                                                                                                                                    • Brand Elements

                                                                                                                                        • Key points
                                                                                                                                          • Brand map
                                                                                                                                              • Figure 45: Attitudes towards and usage of current account brands, April 2010
                                                                                                                                            • Brand qualities of current account brands
                                                                                                                                              • Lloyds and Barclays lead on authority, but lack warmth
                                                                                                                                                • Figure 46: Personalities of various current account brands, April 2010
                                                                                                                                              • Experience of current account brands
                                                                                                                                                • Halifax nearing Lloyds
                                                                                                                                                  • Figure 47: Consumer usage of various current account brands, April 2010
                                                                                                                                                • Brand consideration for current account brands
                                                                                                                                                  • Nationwide and Santander most considered
                                                                                                                                                    • Figure 48: Consideration of various current account brands, April 2010
                                                                                                                                                  • Brand satisfaction for current account brands
                                                                                                                                                    • Smaller brands most excellent, Nationwide top performer
                                                                                                                                                      • Figure 49: Satisfaction with various current account brands, April 2010
                                                                                                                                                    • Brand commitment to current account brands
                                                                                                                                                      • Inertia drives loyalty to Lloyds
                                                                                                                                                        • Figure 50: Commitment to various current account brands, April 2010
                                                                                                                                                      • Brand intentions for current account brands
                                                                                                                                                        • Nationwide and Santander have best retention
                                                                                                                                                          • Figure 51: Future usage intentions for various current account brands, April 2010
                                                                                                                                                        • Brand recommendation for current account brands
                                                                                                                                                          • Nationwide and Santander most recommended
                                                                                                                                                            • Figure 52: Recommendation of various current account brands, April 2010
                                                                                                                                                          • NatWest
                                                                                                                                                            • What the consumer thinks
                                                                                                                                                              • Figure 53: Attitudes towards the NatWest brand, April 2010
                                                                                                                                                            • Santander
                                                                                                                                                              • What the consumer thinks
                                                                                                                                                                • Figure 54: Attitudes towards the Santander brand, April 2010
                                                                                                                                                              • Barclays
                                                                                                                                                                • What the consumer thinks
                                                                                                                                                                  • Figure 55: Attitudes towards the Barclays brand, April 2010
                                                                                                                                                                • Lloyds TSB
                                                                                                                                                                  • What the consumer thinks
                                                                                                                                                                    • Figure 56: Attitudes towards the Lloyds TSB brand, April 2010
                                                                                                                                                                  • Nationwide
                                                                                                                                                                    • What the consumer thinks
                                                                                                                                                                      • Figure 57: Attitudes towards the Nationwide brand, April 2010
                                                                                                                                                                  • Brand Communication and Promotion

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Current account adspend is cut by more than a fifth
                                                                                                                                                                        • Figure 58: Advertising expenditure on current accounts and related services, by sub-product category, 2006-10
                                                                                                                                                                      • TV and press account for the largest share of adspend
                                                                                                                                                                        • Figure 59: Share of advertising expenditure on current accounts and related services, by media type, 2008-10
                                                                                                                                                                      • Three challenger banks feature in the top five advertiser rankings
                                                                                                                                                                        • Figure 60: Top ten advertisers of current accounts and related services, 2008-10
                                                                                                                                                                      • Halifax spends the most on promoting its current account range
                                                                                                                                                                        • Figure 61: Top five advertisers of ordinary current accounts, 2008-10
                                                                                                                                                                      • A&L and HSBC focus their efforts on the packaged account market
                                                                                                                                                                        • Figure 62: Top five advertisers of packaged/premium accounts, 2008-10
                                                                                                                                                                    • Channels to Market

                                                                                                                                                                      • Key points
                                                                                                                                                                        • A branch network helps to grow and retain share
                                                                                                                                                                          • Figure 63: Number of branches belonging to the largest current account providers (shown on group basis), year-end 2009
                                                                                                                                                                        • ATM withdrawals continue to rise
                                                                                                                                                                          • Figure 64: Number of ATMs belonging to the largest current account providers (shown on group basis), 2008
                                                                                                                                                                        • More people switch from telephone to online banking
                                                                                                                                                                          • Figure 65: Number of registered telephone and online banking customers and number of transactions (MBBGs only), 2002 and 2008
                                                                                                                                                                        • Faster Payments driving growth in automated payments
                                                                                                                                                                          • Mobile phone banking technology continues to develop…
                                                                                                                                                                            • …and, while take-up is currently small, there is huge potential
                                                                                                                                                                            • The Consumer – Ownership and Usage Trends

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Current account penetration has remained broadly stable over the past four years
                                                                                                                                                                                  • Figure 66: Current account ownership, 2006-09
                                                                                                                                                                                • Two fifths of the current account customer base have a joint account
                                                                                                                                                                                  • Figure 67: Breakdown of current account holders, 2009
                                                                                                                                                                                • Around one in six customers have a premium or packaged account
                                                                                                                                                                                  • Figure 68: Type of current account held – main account only, 2009
                                                                                                                                                                                • Three in four customers have held their main account for over five years
                                                                                                                                                                                  • Figure 69: Length of time held main current account, 2009
                                                                                                                                                                                • Branch-based providers dominate the market
                                                                                                                                                                                  • Figure 70: Type of provider – main current account only, 2009
                                                                                                                                                                                • Nearly two thirds of current account holders have access to an authorised overdraft
                                                                                                                                                                                  • Figure 71: Facilities available – main current account only, 2009
                                                                                                                                                                                • Almost four fifths pay bills by direct debit
                                                                                                                                                                                  • Figure 72: Type of transaction used – main current account only, 2009
                                                                                                                                                                                • When choosing a current account, people are most likely to consider a company’s reputation, interest rates and locality
                                                                                                                                                                                  • Figure 73: Most important factors when choosing a current account, 2009
                                                                                                                                                                              • The Consumer – Fee-based Packaged Accounts

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • About Mintel’s consumer survey
                                                                                                                                                                                    • One in six have a fee-charging packaged account
                                                                                                                                                                                        • Figure 74: Ownership of fee-based packaged and free/ordinary current accounts, March 2010
                                                                                                                                                                                      • Packaged accounts appeal to a broad socio-economic spectrum
                                                                                                                                                                                        • Figure 75: Type of current account held, by gender and socio-economic group, March 2010
                                                                                                                                                                                      • 25-34-year-olds are a key target group
                                                                                                                                                                                        • Figure 76: Type of current account held, by age, March 2010
                                                                                                                                                                                    • The Consumer – Popularity of Packaged Account Benefits

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Motor breakdown cover and travel insurance are the most common features of a packaged account costing over £10 a month
                                                                                                                                                                                            • Figure 77: Benefits have access to, by type of account, March 2010
                                                                                                                                                                                          • Overdraft anomaly?
                                                                                                                                                                                            • Card protection and travel insurance are the most ‘valued’ benefits
                                                                                                                                                                                              • Figure 78: Benefits actually used, by type account, March 2010
                                                                                                                                                                                            • Scope to make better use of preferential rates and retail vouchers
                                                                                                                                                                                              • Figure 79: Ownership and use of benefits – fee-charging packaged account customers only, March 2010
                                                                                                                                                                                            • Customers are keen on identity theft and card protection, but most wouldn’t pay extra for them
                                                                                                                                                                                                • Figure 80: Interest in and willingness to pay for packaged account benefits, March 2010
                                                                                                                                                                                              • Those aged 25-34 show the greatest willingness to pay extra for value-added benefits
                                                                                                                                                                                                • Figure 81: Willingness to pay for packaged account benefits, by age, March 2010
                                                                                                                                                                                            • The Consumer – Attitudes Towards Potential Challengers

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Tesco and Virgin could pose a real threat to incumbent providers
                                                                                                                                                                                                    • Figure 82: Awareness of potential new entrants and willingness to switch to them (selected brands only), March 2010
                                                                                                                                                                                                  • Brand rankings vary among the different age groups
                                                                                                                                                                                                    • Figure 83: Willingness to switch to selected brands, by age, March 2010
                                                                                                                                                                                                  • Men are more prepared to switch than women
                                                                                                                                                                                                    • Figure 84: Willingness to switch to selected brands, by gender and socio-economic group, March 2010
                                                                                                                                                                                                  • Tesco Bank is the top choice for those on low-to-mid incomes
                                                                                                                                                                                                    • Figure 85: Willingness to switch to selected brands, by household income, March 2010
                                                                                                                                                                                                  • Virgin Money could poach a fair slice of existing fee-paying customers
                                                                                                                                                                                                    • Figure 86: Willingness to switch to selected brands, by type of account held, March 2010
                                                                                                                                                                                                • The Consumer – Targeting Opportunities

                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                    • One in two people might be persuaded to switch if offered a cash incentive
                                                                                                                                                                                                        • Figure 87: Most persuasive factors that would prompt switching to a new bank, March 2010
                                                                                                                                                                                                      • Switching motivations vary with age
                                                                                                                                                                                                        • Figure 88: Most persuasive factors that would prompt switching to a new bank, by age, March 2010
                                                                                                                                                                                                      • Over a third of fee-paying customers could be persuaded to switch for a low overdraft fee
                                                                                                                                                                                                        • Figure 89: Most persuasive factors that would prompt switching to a new bank, by type of account held, March 2010
                                                                                                                                                                                                    • The Consumer – Competitor Analysis

                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                        • Barclays and Lloyds TSB lead the fee-based packaged market
                                                                                                                                                                                                          • Figure 90: Type of current account held, by main account provider (top seven only), March 2010
                                                                                                                                                                                                        • Over half of A&L’s and Barclays’ customers have access to an interest-free overdraft
                                                                                                                                                                                                          • Figure 91: Benefits have access to, by main current account provider (top eight only), March 2010
                                                                                                                                                                                                        • HSBC has greatest success at selling ‘preferential rates’
                                                                                                                                                                                                          • Figure 92: Benefits actually used, by main current account provider (top eight only), March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of the Lloyds Banking Group
                                                                                                                                                                                                          • Figure 93: Interest in and willingness to pay for packaged account benefits – Lloyds TSB Group customers only, March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of RBS Group
                                                                                                                                                                                                          • Figure 94: Interest in and willingness to pay for packaged account benefits – RBS Group customers only, March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of HSBC and First Direct
                                                                                                                                                                                                          • Figure 95: Interest in and willingness to pay for packaged account benefits – HSBC Group customers only, March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of Barclays
                                                                                                                                                                                                          • Figure 96: Interest in and willingness to pay for packaged account benefits – Barclays customers only, March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of Santander Group
                                                                                                                                                                                                          • Figure 97: Interest in and willingness to pay for packaged account benefits – Santander Group customers only, March 2010
                                                                                                                                                                                                        • Willingness to pay for benefits by customers of Nationwide
                                                                                                                                                                                                          • Figure 98: Interest in and willingness to pay for packaged account benefits – Nationwide customers only, March 2010
                                                                                                                                                                                                        • Santander has the least to fear from any new entrants that emerge
                                                                                                                                                                                                          • Figure 99: Willingness to switch to the listed brands, by main current provider, March 2010
                                                                                                                                                                                                        • A&L’s customers are the most prepared to switch for a cash reward
                                                                                                                                                                                                          • Figure 100: Persuasive factors that would prompt switching to a new bank, by main current provider, March 2010
                                                                                                                                                                                                        • Further analysis
                                                                                                                                                                                                        • Appendix – Segmentation of Current Account Customers

                                                                                                                                                                                                            • Figure 101: Type of current account held, by full demographics, March 2010
                                                                                                                                                                                                        • Appendix – Profile of Packaged Account Customers

                                                                                                                                                                                                            • Figure 102: Demographic profile of fee-based packaged account customers, March 2010

                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                        • Abbey
                                                                                                                                                                                                        • Alliance & Leicester
                                                                                                                                                                                                        • Bank of England
                                                                                                                                                                                                        • Bank of Ireland
                                                                                                                                                                                                        • Barclays Bank plc
                                                                                                                                                                                                        • Bradford & Bingley plc
                                                                                                                                                                                                        • Britannia Building Society
                                                                                                                                                                                                        • British Bankers' Association (BBA)
                                                                                                                                                                                                        • Cheltenham & Gloucester plc
                                                                                                                                                                                                        • Clydesdale Bank
                                                                                                                                                                                                        • Co-operative Group
                                                                                                                                                                                                        • Dunfermline Building Society
                                                                                                                                                                                                        • Facebook, Inc.
                                                                                                                                                                                                        • Financial Services Authority (The)
                                                                                                                                                                                                        • Gfk NOP
                                                                                                                                                                                                        • Government Actuary's Department (GAD)
                                                                                                                                                                                                        • Grupo Santander Central Hispano S.A.
                                                                                                                                                                                                        • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                                                                        • HSBC Private Bank (UK) Limited
                                                                                                                                                                                                        • John Gilbert Financial Research
                                                                                                                                                                                                        • John Lewis Partnership
                                                                                                                                                                                                        • Kantar Media
                                                                                                                                                                                                        • Lloyds Banking Group
                                                                                                                                                                                                        • Metro Bank
                                                                                                                                                                                                        • National Australia Bank
                                                                                                                                                                                                        • Nationwide Building Society
                                                                                                                                                                                                        • NatWest
                                                                                                                                                                                                        • Northern Rock plc
                                                                                                                                                                                                        • Office of Fair Trading
                                                                                                                                                                                                        • PizzaExpress Limited
                                                                                                                                                                                                        • Portman Building Society
                                                                                                                                                                                                        • Royal Bank of Scotland Group plc
                                                                                                                                                                                                        • Sainsbury's Bank
                                                                                                                                                                                                        • Somerfield
                                                                                                                                                                                                        • T-Mobile (UK) Ltd
                                                                                                                                                                                                        • Tesco Personal Finance Limited
                                                                                                                                                                                                        • Twitter, Inc.
                                                                                                                                                                                                        • Virgin Mobile
                                                                                                                                                                                                        • Virgin Money
                                                                                                                                                                                                        • Vodafone Group Plc (UK)
                                                                                                                                                                                                        • Waitrose
                                                                                                                                                                                                        • Wm Morrison Supermarkets
                                                                                                                                                                                                        • Yorkshire Bank PLC
                                                                                                                                                                                                        • YouTube, Inc.

                                                                                                                                                                                                        Current, Packaged and Premium Accounts - UK - June 2010

                                                                                                                                                                                                        US $2,583.33 (Excl.Tax)