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

ISAs - UK - August 2010

This report examines the wider economic conditions influencing the ISA market, the size of the market and provides analysis of the major players. Recent market developments are also considered along with analysis of distribution trends and advertising activity. Mintel’s exclusive consumer research provides insight into product ownership, cash ISA market share, attitudes towards and awareness of ISAs and also looks at the motivation behind saving and investment activity.

  • The market was boosted by the increase in contribution limits for the over-50s in the last tax year, but the move doesn't seem to have brought any new people into the market - total contributions were up, but the number of new accounts barely changed.
  • Investors are clearly tiring of low interest rates, and are prepared to take a few risks with their investments. The value of new investment in stocks and shares ISAs increased by a quarter.
  • Mintel forecasts a strong growth in ISA funds in 2010/2011, as people take advantage of raised contribution limits. Post-2011, growth will continue, but at a slower rate.
  • By far the most common reason for saving in an ISA is security - more concrete objectives, such as retirement or saving for a specific purchase are some way behind.
  • Around 16% of ISA owners are 'ISA Informed': highly savvy savers who make the most of their ISA allowance. Nine in ten plan to increase their ISA savings as a result of the increased allowance.
  • For the 63% of ISA holders who are 'Cash Specialists', though, the change will have little impact. Just 3% expect the increased allowance to make a difference.

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 covered in the report
        • Market definitions
          • Abbreviations
          • Future Opportunities

            • My life, my legacy
              • The frequent flier ISA
              • Market in Brief

                • ISA ownership continues to grow
                  • Figure 1: Product ownership, April 2010
                • ISA subscriptions reached £45 billion in 2009/10
                  • Figure 2: Number of ISA accounts and amounts subscribed, 1999/2000-2009/10*
                • Savings activity increases
                  • New industry developments
                    • Provider rankings
                      • ISA product ownership
                        • Attitudes towards ISAs
                          • Figure 3: Attitudes towards ISAs, April 2010
                        • Reasons for saving and investment
                        • Internal Market Environment

                          • Key points
                            • Recent changes to simplify the scheme
                              • Figure 4: Recent and proposed changes to the ISA scheme - UK, 2004-20
                            • Industry welcomes increase in ISA limits
                              • Consumer awareness remains a barrier in the investment sector
                                • Limit increase provides a boost to ISA activity
                                  • New scheme structure 2009/10 v 20010/11
                                    • Figure 5: Illustration of annual investment limits, 2009/10 v 2010/11
                                  • How successful have ISAs been?
                                    • Investment element continues to deter some savers
                                      • OFT study forces cash ISA providers to change their ways
                                        • FSA introduces new conduct of business rules
                                          • Main draw of ISAs tax efficiency
                                            • Change is on the way in the savings marketplace
                                            • Broader Market Environment

                                              • Key points
                                                • Full economic recovery many years away
                                                  • Economic warning signs
                                                    • Figure 6: UK consumer confidence, 2004-10
                                                  • Inflation erodes already low savings returns
                                                    • Figure 7: Average annual changes in the bank base rate, CPI and RPI - UK, 2000-10*
                                                  • Recovery in stock market boosts investor sentiment
                                                    • Figure 8: FTSE 100 and FTSE All Share – daily index movements, Jan 2000-Jun 2010
                                                  • More people are saving and repaying debt
                                                    • Figure 9: UK savings ratio, 2000-10
                                                  • Uncertainty leads to a greater emphasis on saving
                                                    • Figure 10: Savings Climate and Savings/Investment activity, Mar 2006-Jun-2010
                                                  • Falling numbers of higher rate taxpayers
                                                    • Figure 11: Number of basic and higher-rate taxpayers, 1998/99-2010/11
                                                  • Slowdown in over-50s market
                                                    • Figure 12: Size of the UK population, by age group, 2005-15
                                                • Competitive Context

                                                  • Key points
                                                    • ISAs complement other savings and investment products
                                                      • Harmonisation between ISA and pension regimes?
                                                        • Cash-based ISAs lose their appeal as interest rates hit record lows
                                                          • Figure 13: Average monthly quoted deposit interest rates at banks and building societies, January 2000-May 2010
                                                          • Figure 14: Retail savings balances, by type, July 2008, July 2009 and June 2010
                                                        • Cash ISA share of retail funding grows
                                                          • The search for yield
                                                          • Strengths and Weaknesses in the Market

                                                              • Figure 15: ISAs – Strengths and weaknesses of the ISA market – 2010
                                                          • Who’s Innovating?

                                                            • Key points
                                                              • ISA regulation restricts innovation
                                                                • Recent ISA advertising activity
                                                                  • ISA season events drive product development and launches
                                                                    • Inflation-beating cash ISA launched
                                                                      • Innovation in corporate ISAs market
                                                                        • More providers offer ISA wrapper with structured products
                                                                          • Charity-linked ISA accounts emerge
                                                                            • Broad array of investment funds available to retail investors
                                                                              • Innovations/launches in the funds sector have been:
                                                                              • Market Size and Forecast

                                                                                • Key points
                                                                                  • ISA subscriptions rose by 12% in 2009/10
                                                                                    • Figure 16: Number of ISA accounts and amounts subscribed, 1999/2000-2009/10*
                                                                                  • Value of stocks and shares ISA subscriptions best for nine years
                                                                                    • Figure 17: Number of ISA accounts and amounts subscribed, segmented by type, 1999/2000-2009/10
                                                                                  • Average amounts subscribed at record levels in 2009/10
                                                                                    • Figure 18: Average amounts subscribed per account, 1999/2000-2009/10*
                                                                                  • Surge in retail unit trust/OEIC sales; strong net ISA sales in H2 2010
                                                                                    • Figure 19: Total net retail unit trust/OEIC sales and net retail ISA sales, 2005-10
                                                                                  • ISA market forecast
                                                                                    • Figure 20: Forecast of new ISA business, segmented by cash and stocks and shares ISAs, 1999/00-2014/15
                                                                                • Value of ISA Funds

                                                                                  • Key points
                                                                                    • £275 billion held in ISAs
                                                                                      • Figure 21: Value of funds held in ISAs 2005-09
                                                                                  • Market Share

                                                                                    • Key points
                                                                                      • Banks have a 50% share of the ISA market
                                                                                        • Figure 22: Where ISA is held, 2005-09*
                                                                                      • Building societies have around a 36% share of cash ISA balances
                                                                                        • Figure 23: Cash ISA balances by provider, March 2010
                                                                                      • Lloyds Banking Group strengthens position in cash ISA market
                                                                                        • Figure 24: Cash ISA leading groups, April 2009 and April 2010
                                                                                      • Leading ISA fund managers
                                                                                        • Fidelity tops ISA fund rankings
                                                                                          • Figure 25: Top 15 unit trust/OEIC ISA fund managers, by value of funds under management, 2008-10
                                                                                        • Steady consolidation in ISA fund managers
                                                                                        • Companies and Products

                                                                                          • Major players
                                                                                            • Fidelity
                                                                                              • Grupo Santander
                                                                                                • Invesco Perpetual
                                                                                                  • Legal & General
                                                                                                    • Lloyds Banking Group
                                                                                                      • Nationwide Building Society
                                                                                                        • RBS Group
                                                                                                        • Channels to Market

                                                                                                          • Key points
                                                                                                            • Cash ISA are sold directly
                                                                                                              • Branch is most popular distribution channel
                                                                                                                • Figure 26: Distribution channels used for product purchase, September 2009
                                                                                                              • Growth in financial DIY increasing use of non-advised channel
                                                                                                                • Stocks and shares ISAs – the main routes to market
                                                                                                                    • Figure 27: Gross retail sales of unit trusts and OEIC ISAs by distribution channel, 2005-09
                                                                                                                  • Fund supermarkets are increasingly dominant
                                                                                                                    • The leading fund platforms
                                                                                                                      • Platforms redrawing distribution map
                                                                                                                      • Brand Elements

                                                                                                                          • Key points
                                                                                                                            • Brand map
                                                                                                                                • Figure 28: Attitudes towards and usage of ISA brands, April 2010
                                                                                                                              • Brand qualities of ISA brands
                                                                                                                                • NS&I seen as safest bet
                                                                                                                                  • Figure 29: Personalities of various ISA brands, April 2010
                                                                                                                                • Experience of ISA brands
                                                                                                                                  • No brand dominates in ISAs
                                                                                                                                    • Figure 30: Consumer usage of various ISA brands, April 2010
                                                                                                                                  • Brand consideration for ISA brands
                                                                                                                                    • Progressive Santander has interest, Lloyds and Halifax avoided
                                                                                                                                      • Figure 31: Consideration of various ISA brands, April 2010
                                                                                                                                    • Brand satisfaction for ISA brands
                                                                                                                                      • HSBC and Nationwide strongest on satisfaction
                                                                                                                                        • Figure 32: Satisfaction with various ISA brands, June 2010
                                                                                                                                      • Brand commitment to ISA brands
                                                                                                                                        • NatWest and HSBC have highest loyalty
                                                                                                                                          • Figure 33: Commitment to various ISA brands, April 2010
                                                                                                                                        • Brand intentions for ISA brands
                                                                                                                                          • HSBC and Nationwide have biggest draws
                                                                                                                                            • Figure 34: Future usage intentions for various ISA brands, April 2010
                                                                                                                                          • Brand recommendation for ISA brands
                                                                                                                                            • Strong support for NatWest, HSBC and Santander
                                                                                                                                              • Figure 35: Recommendation of various ISA brands, April 2010
                                                                                                                                            • Barclays
                                                                                                                                              • What the consumer thinks
                                                                                                                                                • Figure 36: Attitudes towards the Barclays brand, April 2010
                                                                                                                                              • Room for improvement
                                                                                                                                                • Nationwide
                                                                                                                                                  • What the consumer thinks
                                                                                                                                                    • Figure 37: Attitudes towards the Nationwide brand, April 2010
                                                                                                                                                  • Room for improvement
                                                                                                                                                    • HSBC
                                                                                                                                                      • What the consumer thinks
                                                                                                                                                        • Figure 38: Attitudes towards the HSBC brand, April 2010
                                                                                                                                                      • Room for improvement
                                                                                                                                                        • Santander
                                                                                                                                                          • What the consumer thinks
                                                                                                                                                            • Figure 39: Attitudes towards the Santander brand, April 2010
                                                                                                                                                          • Room for improvement
                                                                                                                                                            • National Savings & Investments (NS&I)
                                                                                                                                                              • What the consumer thinks
                                                                                                                                                                • Figure 40: Attitudes towards the NS&I brand, April 2010
                                                                                                                                                            • Brand Communication and Promotion

                                                                                                                                                              • Key points
                                                                                                                                                                • Record level of ISA adspend
                                                                                                                                                                  • Figure 41: Total advertising expenditure on ISAs, by product category, 2005/06-2009/10
                                                                                                                                                                • Seasonal aspect of ISA market reflected in monthly adspend
                                                                                                                                                                  • Figure 42: Average monthly adspend on ISAs as a percentage of annual adspend, 2009
                                                                                                                                                                • Television preferred media channel for first time in over three years
                                                                                                                                                                  • Figure 43: Adspend on Cash ISAs, by media type, 2007/08-2009/10
                                                                                                                                                                • Press and direct mail dominate investment ISA adspend
                                                                                                                                                                  • Figure 44: Adspend on Investment ISAs, by media type, 2007/08-2009/10
                                                                                                                                                                • Santander top ISA adspend
                                                                                                                                                                  • Figure 45: Top 15 ISA advertisers, 2007/08-2009/10
                                                                                                                                                              • Savings Product Ownership

                                                                                                                                                                • Key points
                                                                                                                                                                  • Note on consumer research
                                                                                                                                                                    • Two fifths of adults hold an ISA
                                                                                                                                                                      • Figure 46: Product ownership, April 2010
                                                                                                                                                                    • Generating income in a low-interest environment
                                                                                                                                                                      • Figure 47: Most popular product ownership, by demographics, April 2010
                                                                                                                                                                    • Stock market investments still the preserve of high earners
                                                                                                                                                                      • Knowledge is a vital commodity
                                                                                                                                                                        • Over 55s – especially the retired – dominant force in cash savings market
                                                                                                                                                                          • Figure 48: Next most popular product ownership, by demographics, April 2010
                                                                                                                                                                        • Will cash ISAs fill the gap left by the Child Trust Fund?
                                                                                                                                                                          • Figure 49: Other product ownership, by demographics, April 2010
                                                                                                                                                                        • Some 14 million high and super savers
                                                                                                                                                                          • Figure 50: Repertoire of product ownership, April 2010
                                                                                                                                                                          • Figure 51: Product ownership, by repertoire of product ownership, April 2010
                                                                                                                                                                        • Around 19 million adults hold ISAs
                                                                                                                                                                          • Figure 52: Have ISA, 2005-09
                                                                                                                                                                        • Easy access is the most widely held type of ISA
                                                                                                                                                                          • Figure 53: Types of ISA have, 2009
                                                                                                                                                                      • Cash ISA Market Share

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Halifax/Bank of Scotland leading cash ISA provider
                                                                                                                                                                            • Figure 54: Cash ISA account providers, April 2010*
                                                                                                                                                                        • Attitudes Towards ISAs, Savings and Investments

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Nearly three quarters of ISA holders aware of increased ISA allowances
                                                                                                                                                                              • Figure 55: Attitudes towards ISAs, April 2010
                                                                                                                                                                            • Increased allowances boost the top end of the market
                                                                                                                                                                              • Figure 56: Most popular attitudes towards ISAs, by demographics, April 2010
                                                                                                                                                                            • Income seekers are more likely to be aware of ISA changes
                                                                                                                                                                              • Instant access accounts have wide-ranging appeal
                                                                                                                                                                                • Confusion over ISA regulations
                                                                                                                                                                                  • Figure 57: Next most popular attitudes towards ISAs, by demographics, April 2010
                                                                                                                                                                                • The retirement hot spots
                                                                                                                                                                                  • Could the tabloids help increase awareness?
                                                                                                                                                                                    • Switched ISA providers
                                                                                                                                                                                      • Nationwide customers appear more to be ISA aware
                                                                                                                                                                                        • Figure 58: Attitudes towards ISAs, by cash ISA account providers, April 2010
                                                                                                                                                                                    • Motivation for Saving and Investing

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • More than half of savers are preparing for a ‘rainy day’
                                                                                                                                                                                          • Figure 59: Main reasons for saving or investing, April 2010
                                                                                                                                                                                        • Funding major purchases is a motivation across all lifestage groups
                                                                                                                                                                                          • Figure 60: Top four main reasons for saving or investing, by lifestage, April 2010
                                                                                                                                                                                        • Promoting ISA tax benefits
                                                                                                                                                                                          • Figure 61: Main reasons for saving or investing, by product ownership, April 2010
                                                                                                                                                                                      • ISA Targeting Opportunities

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • ISA target groups
                                                                                                                                                                                            • Figure 62: ISA target groups, April 2010
                                                                                                                                                                                          • Cash specialists (64%)
                                                                                                                                                                                            • The ISA informed (16%)
                                                                                                                                                                                              • Heavy savers (19%)
                                                                                                                                                                                                • Half of the ISA informed have switched in the last two years
                                                                                                                                                                                                  • Figure 63: Attitudes towards ISAs, by target groups, April 2010
                                                                                                                                                                                                • Cash specialists
                                                                                                                                                                                                  • ISA informed
                                                                                                                                                                                                    • Heavy savers
                                                                                                                                                                                                      • Tax benefits motivate the ISA Informed and Heavy Saver groups
                                                                                                                                                                                                        • Figure 64: Main reasons for saving or investing, by target groups, April 2010
                                                                                                                                                                                                      • Cash Specialists
                                                                                                                                                                                                        • ISA Informed
                                                                                                                                                                                                          • Heavy Savers
                                                                                                                                                                                                            • Product holdings vary between groups
                                                                                                                                                                                                              • Figure 65: Product ownership, by target groups, April 2010
                                                                                                                                                                                                          • Appendix – Savings Product Ownership

                                                                                                                                                                                                              • Figure 66: Most popular product ownership, by demographics, April 2010
                                                                                                                                                                                                              • Figure 67: Next most popular product ownership, by demographics, April 2010
                                                                                                                                                                                                              • Figure 68: Other product ownership, by demographics, April 2010
                                                                                                                                                                                                              • Figure 69: Repertoire of product ownership, by demographics April 2010
                                                                                                                                                                                                          • Appendix – Cash ISA Market Share

                                                                                                                                                                                                              • Figure 70: Cash ISA account providers, by demographics, April 2010
                                                                                                                                                                                                          • Appendix – Attitudes Towards ISAs, Savings and Investment

                                                                                                                                                                                                              • Figure 71: Most popular attitudes towards ISAs, by demographics, April 2010
                                                                                                                                                                                                              • Figure 72: Next most popular attitudes towards ISAs, by demographics, April 2010
                                                                                                                                                                                                          • Appendix – Motivation for Saving and Investing

                                                                                                                                                                                                              • Figure 73: Most popular main reasons for saving or investing, by demographcis, April 2010
                                                                                                                                                                                                              • Figure 74: Next most popular main reasons for saving or investing, by demographcis, April 2010
                                                                                                                                                                                                          • Appendix – ISA Targeting Opportunities

                                                                                                                                                                                                              • Figure 75: Target groups, by demographics, April 2010
                                                                                                                                                                                                              • Figure 76: Cash ISA account providers, by target groups, April 2010

                                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                                          • Alliance & Leicester
                                                                                                                                                                                                          • Aviva Plc
                                                                                                                                                                                                          • Baillie Gifford & Co
                                                                                                                                                                                                          • Barclays Bank plc
                                                                                                                                                                                                          • Bradford & Bingley plc
                                                                                                                                                                                                          • Britannia Building Society
                                                                                                                                                                                                          • British Bankers' Association (BBA)
                                                                                                                                                                                                          • Building Societies Association
                                                                                                                                                                                                          • Cheltenham & Gloucester plc
                                                                                                                                                                                                          • Clerical Medical Investment Group Ltd
                                                                                                                                                                                                          • Direct Line Group Limited
                                                                                                                                                                                                          • Financial Ombudsman Service
                                                                                                                                                                                                          • Financial Services Authority (The)
                                                                                                                                                                                                          • Government Actuary's Department (GAD)
                                                                                                                                                                                                          • Grupo Santander Central Hispano S.A.
                                                                                                                                                                                                          • Hargreaves Lansdown Plc
                                                                                                                                                                                                          • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                                                                          • Henderson Global Investors
                                                                                                                                                                                                          • HM Revenue & Customs
                                                                                                                                                                                                          • Intelligent Finance
                                                                                                                                                                                                          • Investment Management Association
                                                                                                                                                                                                          • J. Sainsbury
                                                                                                                                                                                                          • John Gilbert Financial Research
                                                                                                                                                                                                          • Jupiter Unit Trust Managers Ltd
                                                                                                                                                                                                          • Kantar Media
                                                                                                                                                                                                          • Lloyds Banking Group
                                                                                                                                                                                                          • National Counties Building Society
                                                                                                                                                                                                          • Nationwide Building Society
                                                                                                                                                                                                          • NatWest
                                                                                                                                                                                                          • Northern Rock plc
                                                                                                                                                                                                          • Norwich Union
                                                                                                                                                                                                          • Royal Bank of Scotland Group plc
                                                                                                                                                                                                          • Scottish Friendly Assurance Society Ltd
                                                                                                                                                                                                          • Scottish Widows Bank plc
                                                                                                                                                                                                          • Skipton Building Society
                                                                                                                                                                                                          • Threadneedle Investment Services Ltd
                                                                                                                                                                                                          • Virgin Money
                                                                                                                                                                                                          • Waitrose
                                                                                                                                                                                                          • Yorkshire Building Society

                                                                                                                                                                                                          ISAs - UK - August 2010

                                                                                                                                                                                                          US $2,583.33 (Excl.Tax)