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Savings - Ireland - January 2013

“The cost of living continues to increase, household debt is still quite high and interest remains low; but despite all this, Irish consumers are still making frequent deposits into their savings accounts. Moving forward the value of the savings market will continue to grow as more Irish consumers reject living on credit, and embrace living within their means.”
– Brian O’Connor, Production Manager

Some questions answered in this report include:

  • How loyal are Irish consumers to banks?
  • Can the savings market flourish in a low interest environment?
  • What are the main factors considered by Irish consumers when picking a savings account?
  • What are the key alternatives to savings accounts?
  • What toll has the economic downturn taken on savings?

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Table of contents

  1. Introduction

      • Key themes of the report
        • Definitions
          • Data sources
            • Abbreviations
            • Executive Summary

                • The market
                  • Forecast
                    • Figure 1: Index of growth of total deposits from private households, RoI and NI, 2008-18
                  • Market factors
                    • Consumer spending continues to decline as consumers shun debt products
                      • Financial concerns affecting consumer confidence
                        • Figure 2: Financial factors causing consumers concern, NI and RoI, October 2012
                      • Half of RoI consumers feel it is a bad time to save
                        • Interest rates still low – and could go lower still
                          • Taxation changes eating into savings
                            • Consumers more aware of finances
                              • Companies, brands and innovations
                                • The consumer
                                  • More Irish consumers own savings accounts in 2012
                                    • Figure 3: Consumers who own any savings accounts, NI and RoI, 2008-12
                                  • Half of Irish consumers have only one savings account
                                    • Instant access the most used type of savings account
                                      • Average consumer has owned their savings account for over ten years
                                        • Irish consumers save every month
                                          • Interest is the key concern for savers
                                            • Figure 4: Top five most important factors when choosing a bank for a savings account, NI and RoI, 2012
                                          • What we think
                                          • Issues in the Market

                                            • How loyal are Irish consumers to banks?
                                              • Can the savings market flourish in a low interest environment?
                                                • What are the main factors considered by Irish consumers when picking a savings account?
                                                  • What are the key alternatives to savings accounts?
                                                    • What toll has the economic downturn taken on savings?
                                                    • Future Opportunities

                                                      • Prepare for the Worst
                                                        • Help Me Help Myself
                                                          • Mintel Futures: Old Gold
                                                          • Market Overview

                                                            • Key points
                                                              • Consumer expenditure in flux
                                                                • RoI consumers more willing to save for the things they want
                                                                  • Figure 5: Agreement with the statement ‘If there's something I want I save up for it’, NI and RoI, 2007-12
                                                                  • Figure 6: Agreement with selected financial statements, NI and RoI, 2007 and 2012
                                                                • Consumer confidence showing slight improvement
                                                                  • Figure 7: Consumer sentiment index, RoI, January 2009-January 2013
                                                                  • Figure 8: Consumer confidence index, NI, December 2009-December 2012
                                                                • Finances are top concern for most consumers
                                                                  • Figure 9: Financial and non-financial factors causing consumers concern, NI and RoI, October 2012
                                                                • Increase in costs of living driving financial worries
                                                                  • Figure 10: Consumer price index, RoI, 2007-12
                                                                • Half of RoI consumers feel that now is a bad time to save
                                                                  • Figure 11: Savings Index, RoI, January 2012-January 2013
                                                                • Interest levels still low
                                                                  • Figure 12: Official Bank of England (BoE) and European Central Bank (ECB) interest (deposit) rates, 2008-13
                                                                • BoE to hold interest rates, ECB to cut further?
                                                                  • Taxation of savings accounts a further problem for the savings market
                                                                    • Over half of RoI consumers feel the government discourages saving
                                                                      • Consumers are getting more financially savvy
                                                                        • Figure 13: Agreement with statement 'I am more aware of personal finance than I used to be', NI and RoI, 2008-12
                                                                    • Market Size and Forecast

                                                                      • Key points
                                                                        • Value of deposits market grows in 2012
                                                                          • Figure 14: Total deposits from private households, RoI, NI and all Ireland, 2008-18
                                                                          • Figure 15: Agreement with statement 'I don’t like the idea of being in debt', NI and RoI, 2007 and 2012
                                                                        • Focus on debt reduction may be stifling growth
                                                                          • Value of savings deposits set to grow
                                                                            • Figure 16: Index of growth of total deposits from private households, RoI and NI, 2008-18
                                                                          • RoI consumers save more of their disposable income
                                                                            • Figure 17: Household savings ratio, % of disposable household income, UK (incl. NI) and RoI, 2008-13
                                                                            • Figure 18: Unemployment levels, RoI and NI, 2008-12
                                                                          • Transaction values in RoI increase during 2012
                                                                            • Figure 19: Annual value of transactions in private household deposits, RoI, 2004-13
                                                                        • Strengths and Weaknesses

                                                                          • Strengths
                                                                            • Weaknesses
                                                                            • Competitive Context

                                                                              • Key points
                                                                                • Property prices continue to fall in 2012
                                                                                  • Figure 20: House price index, RoI and NI, 2005-12
                                                                                • Prices estimated to continue dropping in 2013, but by less
                                                                                  • Irish consumers still see stocks and shares investments as being risky
                                                                                    • Figure 21: Agreement with the statement ‘Owning stocks and shares is too risky an investment for me’, NI and RoI, 2008 and 2012
                                                                                    • Figure 22: Ownership of stocks, shares, unit trusts or investment trusts, NI and RoI, 2008 and 2012
                                                                                  • Few Irish consumers acquired stocks or shares since downturn began
                                                                                    • Figure 23: When stocks, shares, unit trusts or investment trusts were first acquired, NI and RoI, 2012
                                                                                • Companies and Innovations

                                                                                    • Examples of innovation
                                                                                      • NatWest pigs re-invented to encourage saving
                                                                                        • Danske Bank introduces first iPad banking app in RoI
                                                                                          • Nationwide launches ‘SavingsWatch’
                                                                                            • Company profiles
                                                                                              • Allied Irish Bank (AIB)
                                                                                                • An Post
                                                                                                  • Bank of Ireland (BoI)
                                                                                                    • The Co-operative Bank
                                                                                                      • Danske Bank
                                                                                                        • EBS Limited
                                                                                                          • First Trust
                                                                                                            • HSBC
                                                                                                              • KBC Bank
                                                                                                                • National Treasury Management Agency (NTMA)
                                                                                                                  • Nationwide
                                                                                                                    • Permanent TSB
                                                                                                                      • Post Office
                                                                                                                        • RaboDirect
                                                                                                                            • Figure 24: Rabobank credit rating from international rating agencies, 2012
                                                                                                                          • Santander
                                                                                                                            • Ulster Bank
                                                                                                                            • The Consumer – Savings Account Ownership

                                                                                                                              • Key points
                                                                                                                                • Ownership of savings accounts increases between 2008 and 2012
                                                                                                                                  • Figure 25: Consumers who own any savings accounts, NI and RoI, 2008-12
                                                                                                                                • Most consumers own only one savings account
                                                                                                                                  • Figure 26: Number of savings accounts held, NI and RoI, 2012
                                                                                                                                  • Figure 27: Ownership of two savings accounts, NI and RoI, 2008 and 2012
                                                                                                                                • Multiple account ownership increases with age
                                                                                                                                  • Figure 28: Number of savings accounts held, by age, NI and RoI, 2012
                                                                                                                                • Instant-access accounts more favourable with Irish savers
                                                                                                                                  • Figure 29: Type of savings account held, NI and RoI, 2012
                                                                                                                                • Instant access in uncertain times
                                                                                                                                  • Figure 30: Agreement with selected statements relating to paying bills, NI and RoI, October 2012
                                                                                                                                • Most savings accounts show long-term ownership
                                                                                                                                  • Figure 31: How long have consumers have held their savings account, RoI and NI, 2012
                                                                                                                                • Most accounts opened with existing banks
                                                                                                                                  • Figure 32: Where customers opened new savings accounts, RoI and NI, 2012
                                                                                                                                • Irish savers make deposits every month
                                                                                                                                  • Figure 33: Frequency of paying into savings account, NI and RoI, 2012
                                                                                                                                  • Figure 34: Consumers who pay into a savings account every month, by age, NI and RoI, 2012
                                                                                                                              • The Consumer – Choosing a Savings Account

                                                                                                                                • Key points
                                                                                                                                  • Interest is the most important factor when choosing a savings account
                                                                                                                                    • Figure 35: Most important factors when choosing a bank for a savings account, NI and RoI, 2012
                                                                                                                                  • Most interest in interest
                                                                                                                                    • Figure 36: Consumers who find rate of interest to be most important factor when choosing a bank for a savings account, by gender and age, NI and RoI, 2012
                                                                                                                                    • Figure 37: Consumer age groups, by social class, NI and RoI, 2012
                                                                                                                                  • The spectre of negative interest
                                                                                                                                    • Company reputation important to many
                                                                                                                                      • Figure 38: Consumers who find company reputation to be most important factor when choosing a bank for a savings account, NI and RoI, 2008-12
                                                                                                                                    • Trust in banks falls in RoI, increases in NI
                                                                                                                                      • Figure 39: Agreement with the statement ‘I trust banks/building societies to look after my money’, NI and RoI, 2009-12
                                                                                                                                    • Locality an important factor
                                                                                                                                      • Figure 40: Consumers who find locality to be most important factor when choosing a bank for a savings account, by work status, NI and RoI, 2012
                                                                                                                                    • Bank personnel have influence on opening a savings account
                                                                                                                                      • Personal experience also important
                                                                                                                                      • Appendix

                                                                                                                                        • NI TGI tables
                                                                                                                                          • Figure 41: Number of savings accounts held, by demographics, NI, 2012
                                                                                                                                          • Figure 42: Own/joint savings account, by demographics, NI, 2012
                                                                                                                                          • Figure 43: Type of savings account held, by demographics, NI, 2012
                                                                                                                                          • Figure 44: Frequency of paying into savings account, by demographics, NI, 2012
                                                                                                                                          • Figure 45: Savings account with branch, by demographics, NI, 2012
                                                                                                                                          • Figure 46: How long savings account(s) held, by demographics, NI, 2012
                                                                                                                                          • Figure 47: Who chose bank for savings account, by demographics, NI, 2012
                                                                                                                                          • Figure 48: Consumer response to ‘Where did you open a new savings account?’, by demographics, NI, 2012
                                                                                                                                          • Figure 49: Bank/building society choice (savings account): Most important factor, by demographics, NI, 2012
                                                                                                                                          • Figure 50: Bank/building society choice (savings account): Most important factor, by demographics, NI, 2012 (continued)
                                                                                                                                          • Figure 51: Bank/building society choice (savings account): Most important factor, by demographics, NI, 2012 (continued)
                                                                                                                                          • Figure 52: Bank/building society choice (savings account): Second most important factor, by demographics, NI, 2012
                                                                                                                                          • Figure 53: Bank/building society choice (savings account): Second most important factor, by demographics, NI, 2012 (continued)
                                                                                                                                          • Figure 54: Bank/building society choice (savings account): Second most important factor, by demographics, NI, 2012 (continued)
                                                                                                                                        • RoI TGI tables
                                                                                                                                          • Figure 55: Number of savings accounts held, by demographics, RoI, 2012
                                                                                                                                          • Figure 56: Own/joint savings account, by demographics, RoI, 2012
                                                                                                                                          • Figure 57: Type of savings account held, by demographics, RoI, 2012
                                                                                                                                          • Figure 58: Frequency of paying into savings account, by demographics, RoI, 2012
                                                                                                                                          • Figure 59: Savings account with branch, by demographics, RoI, 2012
                                                                                                                                          • Figure 60: Consumer response to ‘How long have you held your savings account?’, by demographics, RoI, 2012
                                                                                                                                          • Figure 61: Consumer response to ‘Who chose your bank for savings account?’, by demographics, RoI, 2012
                                                                                                                                          • Figure 62: Consumer response to ‘With whom did you open a new savings account?’, by demographics, RoI, 2012
                                                                                                                                          • Figure 63: Bank/building society choice (savings account): Most important factor, by demographics, RoI, 2012
                                                                                                                                          • Figure 64: Bank/building society choice (savings account): Most important factor, by demographics, RoI, 2012 (continued)
                                                                                                                                          • Figure 65: Bank/building society choice (savings account): Most important factor, by demographics, RoI, 2012 (continued)
                                                                                                                                          • Figure 66: Bank/building society choice (savings account): Second most important factor, by demographics, RoI, 2012
                                                                                                                                          • Figure 67: Bank/building society choice (savings account): Second most important factor, by demographics, RoI, 2012 (continued)
                                                                                                                                          • Figure 68: Bank/building society choice (savings account): Second most important factor, by demographics, RoI, 2012 (continued)

                                                                                                                                      Companies Covered

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

                                                                                                                                      Savings - Ireland - January 2013

                                                                                                                                      US $1,466.97 (Excl.Tax)