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Savings - Ireland - March 2010

The savings market in Ireland has witnessed some considerable changes in the past 18-24 months. A stronger focus on security of deposits has emerged from the fallout in the financial services sector, while the tumble in interest rates has eaten away at market value.

Some good has come from the economic downturn however; consumers are more tuned in to planning for the future and as market conditions ease for consumers, gradual growth in the value of savings is expected.

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Table of contents

  1. Issues in the Market

      • Key themes in the report
        • Definition
          • Abbreviations
          • Insights and Opportunities

            • The name game
              • Rewarding responsibility
                • Capping the current account
                • Market in Brief

                  • Security at the forefront of consumers’ minds
                    • Interest rate slump deterring potential savers
                      • Economic downturn creating consumer uncertainty
                        • Savings considered a good ‘rainy day’ option during the recession
                        • Fast Forward Trends

                            • Trend 1: You Are In Control
                              • What's it about?
                                • What we've seen
                                  • Specifics
                                    • What next?
                                      • Trend 2: Local Knowledge
                                        • What's it about?
                                          • What we've seen
                                            • Specifics
                                              • What next?
                                              • Internal Market Environment

                                                • Key points
                                                  • Governments up the savings guarantee limits
                                                    • Protecting the consumer’s nest egg
                                                      • Security and control key features for the coming years
                                                        • Interest rates at all-time low
                                                          • Figure 1: Average annual UK and Eurozone interest rates, January 2003-Feburary 2010
                                                          • Figure 2: Retail interest rates for new business in deposits from households, RoI, January 2007-December 2009
                                                          • Figure 3: Average quoted deposit interest rates at banks and building societies, UK, January 2007-February 2009
                                                        • Consumers left with little incentive to save
                                                          • A stronger focus on debt repayment
                                                            • Figure 4: Value of outstanding mortgages, RoI, January 2008-December 2009
                                                          • Banks competing for deposits
                                                            • Greater savings for ISA holders
                                                            • Broader Market Environment

                                                              • Key points
                                                                • Pressures on disposable income making saving difficult
                                                                  • Figure 5: Economic outlook, NI and RoI, 2008-10
                                                                • Unemployment shows no signs of abating
                                                                  • Consumers tighten the purse strings
                                                                    • Less cash means less savings
                                                                      • Consumer confidence showing ‘moderate’ improvement
                                                                        • Figure 6: Consumer Sentiment/Confidence Index, January 2005-December 2009
                                                                      • Encouraging a savings culture
                                                                        • Deflation reducing savings returns for consumers
                                                                          • Figure 7: Monthly changes in annual inflation rates* for CPI in RoI and CPI and RPI in UK, January 2003-December 2009
                                                                        • Population trends set to place greater emphasis on savings
                                                                          • Figure 8: Percentage change in population projections, by age group, RoI, 2006-41
                                                                          • Figure 9: Percentage change in population projections, by age group, NI, 2008-41
                                                                        • Savings essential for an aging population
                                                                        • Competitive Context

                                                                          • Key points
                                                                            • Poor pension fund performance to drive savings market
                                                                              • Figure 10: Value of pension fund assets, RoI, 2003-08
                                                                              • Figure 11: Value of pension fund assets, NI, 2003-08
                                                                            • Equity markets recovering from 2008 crash
                                                                              • Figure 12: ISEQ monthly index movements, January 2006-December 2009
                                                                              • Figure 13: FTSE 100 and FTSE All-share monthly index movements, January 2006-December 2009
                                                                            • Consumers left shaken by stock market tumble
                                                                              • Figure 14: Percentage of respondents who agree with statement ‘owning stocks and shares is too risky an investment for me’, NI and RoI, 2004-09
                                                                              • Figure 15: Percentage of respondents with investments, stocks and shares, unit trusts and investment trusts, NI and RoI, 2004-09
                                                                            • Buy-to-let property – the landlords lose out
                                                                              • Figure 16: Outstanding buy-to-let residential mortgage lending, RoI, 2004-09
                                                                            • Pre-recession showed growth in NI renting sector
                                                                              • Figure 17: Total number of private rented residential units, 000s, NI, 2003-08
                                                                              • Figure 18: Number of properties let in the Belfast Metropolitan area, Jan 2008-June 2009
                                                                              • Figure 19: Average rent per month in Belfast Metropolitan area, Jan 2008-June 2009
                                                                            • Drop in UK BTL lending reflective of wider market trends
                                                                              • Figure 20: Value of new buy-to-let lending, UK, 2005-09
                                                                            • Some increase in lending activity seen at end of 2009
                                                                              • Figure 21: Number of new buy-to-let mortgages advanced, UK, 2005-09
                                                                          • Strengths and Weaknesses

                                                                            • Strengths
                                                                              • Weaknesses
                                                                              • Market Value and Forecast

                                                                                • Key points
                                                                                  • Spare cash not making its way into savings
                                                                                    • Figure 22: Value of savings market, IoI, RoI and NI, 2004-14
                                                                                  • The recession eating away at ‘would-be’ savings
                                                                                    • Consumers forced to take responsibility
                                                                                      • Saving intentions and ability do not match up
                                                                                      • Market Segmentation

                                                                                        • Key points
                                                                                          • RoI consumers thinking long-term
                                                                                            • Figure 23: Segmentation of the savings market, RoI, 2005-10
                                                                                          • NI consumers keeping their cash handy
                                                                                            • Figure 24: Segmentation of the savings market, NI, 2005-10
                                                                                        • Who’s Innovating?

                                                                                          • Key points
                                                                                            • Competitive offers to draw customers in
                                                                                              • An emphasis on security
                                                                                                • Moving forward
                                                                                                • Companies and Products

                                                                                                  • Key points
                                                                                                    • Banks and building societies
                                                                                                      • Allied Irish Bank (AIB)
                                                                                                        • Bank of Ireland (BoI) Group
                                                                                                          • Halifax (HBOS plc)
                                                                                                            • HSBC Bank plc
                                                                                                              • Irish Life & Permanent Group plc
                                                                                                                • Nationwide
                                                                                                                  • Nationwide UK (Ireland)
                                                                                                                    • National Irish Bank (NIB) and Northern Bank
                                                                                                                      • Santander UK plc
                                                                                                                        • Standard Life plc
                                                                                                                          • Ulster Bank Group
                                                                                                                            • Other
                                                                                                                              • The Co-operative Group
                                                                                                                                • Post Office
                                                                                                                                  • Rabodirect.ie
                                                                                                                                  • Consumer Ownership

                                                                                                                                    • Key points
                                                                                                                                      • Multiple account ownership higher in RoI
                                                                                                                                        • Figure 25: Number of respondents with one, two or three or more accounts, RoI, 2007-09
                                                                                                                                        • Figure 26: Number of respondents with one, two or three or more accounts, NI, 2007-09
                                                                                                                                      • Ready access a key feature for savers
                                                                                                                                        • Figure 27: Type of account owned, NI, 2007-09
                                                                                                                                        • Figure 28: Type of account owned, RoI, 2007-09
                                                                                                                                      • Long-term savings on the horizon in RoI
                                                                                                                                          • Figure 29: Frequency of payment into savings account, NI and RoI, 2009
                                                                                                                                        • ISAs continue to gain ground
                                                                                                                                          • Figure 30: ISA ownership, NI, 2004-09
                                                                                                                                          • Figure 31: Where ISA is held, NI, 2004-09
                                                                                                                                        • Interest rates most important factor for consumers
                                                                                                                                            • Figure 32: Most important factors when choosing a savings account provider, NI and RoI, 2007-09
                                                                                                                                        • Consumer Typologies

                                                                                                                                          • Key points
                                                                                                                                            • NI target groups
                                                                                                                                              • Figure 33: Consumer typologies, NI, 2009
                                                                                                                                            • Shrewd Savers
                                                                                                                                              • Scatter-brain Students
                                                                                                                                                • Money Jugglers
                                                                                                                                                  • Security Seekers
                                                                                                                                                    • RoI target groups
                                                                                                                                                      • Figure 34: Consumer typologies, RoI, 2009
                                                                                                                                                    • Risk Avoiders
                                                                                                                                                      • Early Planners
                                                                                                                                                        • Purpose Savers
                                                                                                                                                          • Non-savers
                                                                                                                                                          • Appendix

                                                                                                                                                              • Figure 35: Target groups, by agreement with attitudes towards finance, NI, 2009
                                                                                                                                                              • Figure 36: Target groups, by demographic breakdown, NI, 2009
                                                                                                                                                              • Figure 37: Target groups, by agreement with attitudes towards finance, RoI, 2009
                                                                                                                                                              • Figure 38: Target groups, by demographic breakdown, RoI, 2009

                                                                                                                                                          Companies Covered

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                                                                                                                                                          Savings - Ireland - March 2010

                                                                                                                                                          £1,095.00 (Excl.Tax)