2021
9
UK Consumers and Investing Market Report 2021
2021-12-10T03:09:12+00:00
OX1049249
2195
146208
[{"name":"Consumers and Trends","url":"https:\/\/store.mintel.com\/industries\/consumers-trends"},{"name":"Savings and Investments","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services\/savings-investments"}]
Report
en_GB
“The COVID-19 pandemic has had a positive impact on the retail investing market, with future prospects looking positive. Gross and net investment sales have increased as people have turned to…

UK Consumers and Investing Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Consumers and Investing market report identifies consumer attitudes towards retail investments, investment product ownership, assets, and investment intentions in the UK. This consumer investment report covers the market size, market forecast, market segmentation and industry trends for the Consumers and Investing market in the UK. 

Current Market Landscape

Younger age groups have driven much of the recent rise in the volume of retail investors, with under-35’s continuing to show high levels of interest in the market. However, as regulatory scrutiny intensifies, providers will need to ensure they protect this group from taking on too much risk.

  • 46% of 18-24 year old non-investors and 32% of those aged 25- 44 say they are likely to start investing in the next 12 months.
  • The cost of living has increased significantly in the second half of 2021 to stand at over 4% in November, with the OBR forecasting inflation of 4% in 2022, at the time of writing.
  • Value sales are estimated to slip back by 5% to £1.63 billion during 2021.
  • 74% of existing and potential investors agree that sustainable investment is increasingly important, while 71% believe it should be easier to invest sustainably and ethically.

COVID-19 disruption has had a broadly positive impact on the investment market, with restrictive lockdown measures boosting household savings due to reduced spending. This has increased both the number of investors engaging in the market and the amount investors have been able to save. Household deposits have fallen since the economy started to reopen from April 2021, although monthly saving remains well above pre-pandemic levels.

Future Market Trends in Consumers and Investing

Household finances will face increased pressure from the rising cost of living in 2022. Coupled with increased spending opportunities in comparison to 2020 and 2021, this will reduce the amount people are able to save and invest.

ESG investing has risen in prominence in recent years, due to a combination of regulatory and consumer pressure. Mintel’s consumer research reveals there are significant opportunities for companies to expand their offerings in this area and scope to engage with new younger investors.

Read on to discover more details or take a look at all of our UK Consumer and Savings market research.

Quickly understand

  • Size of the market for retail investments and segmentation by type of investment.
  • Ownership of investment products and how these assets are managed.
  • Investment intentions for the next year, and attitudes and motivations towards investing.
  • Factors influencing consumer choice of investment provider.

Covered in this report

Products: Exchange-traded Funds, Individual Company Shares, Investment Bonds, Stocks and Shares ISAs, Unit Trust Funds and Open-ended Investment Companies.

Brands: BlackRock, Baillie Gifford & Co, Fidelity, Jupiter, Aberdeen Standard, Threadneedle, M&G, BNY Mellon, Invesco, Fundsmith, Hargreaves Lansdown, Vanguard, Legal & General, RBC, UBS, Liontrust Investment, Jewellery Quarter Bullion, CME Group, Nutmeg, Wealthify, AJ Bell YouInvest.

Expert analysis from a specialist in the field

This report, written by Jennie Bryans, a leading analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The COVID-19 pandemic has had a positive impact on the retail investing market, with future prospects looking positive. Gross and net investment sales have increased as people have turned to investing due to enduring low interest rates and pent-up household savings. The pandemic has also encouraged new, and younger, investors to market – many of whom are interested in investing in ESG funds, which have risen in prominence. However, expect to see new regulation in the near future surrounding consumer protection of high-risk investments, which are being increasingly advertised on social media platforms. More and more investors are using technology, such as social media or trading apps, to manage their investments, providing a key opportunity for investment firms to widen engagement in the future.
Jennie Bryans
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on the investment market
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on the retail investment market, 2020-25
    • The market
    • Retail investment sales growth will slow from 2022
      • Figure 2: Market size and COVID-19 scenario forecast for gross retail sales, 2016-26
    • Fund platform sales continue to see significant growth
    • FCA announces new investment strategy to tackle investment harm
    • ESG regulation ramps up
    • Companies and brands
    • Most top investment firms saw an increase of assets under management in 2021
      • Figure 3: Top 10 asset managers, by total retail funds under management, 2020 and 2021
    • Lloyds Banking Group plans to launch new investment arm worth £100 billion
    • Market developments expand the reach of robo-advice services
    • The consumer
    • ISAs remain the key entry point to the investment market
      • Figure 4: Ownership of investment products, 2021
    • Online channels dominate the market
      • Figure 5: Channels used to manage investments, 2021
    • Most have longer-term investment aims but a minority are investing for fun
      • Figure 6: Motivations for investing, 2021
    • Low fees and charges is the biggest factor determining choice of provider
      • Figure 7: Factors influencing choice of a new investment provider or platform, 2021
    • Most investors are targeting long-term, planned growth…
    • …while sustainability is growing in importance
      • Figure 8: Attitudes towards investing, 2021
  3. Issues and Insights

    • ESG is increasingly a point of differentiation for consumers
    • Apps move into the mainstream for younger consumers
  4. Market Size and Performance

    • Impact of COVID-19 on the retail investment market
      • Figure 9: Short, medium and long-term impact of COVID-19 on the retail investment market, 2020-25
    • Gross and net retail investment sales continue to grow in 2021
      • Figure 10: Retail sales of UK funds and recognised overseas funds, 2012-21
  5. Market Forecast

    • Gross retail sales are expected to grow steadily over the next five years
      • Figure 11: Forecast for the value of gross retail sales, 2016-26
      • Figure 12: Forecast for the value of gross retail sales, 2016-26
    • Market drivers and assumptions
      • Figure 13: Selected key drivers affecting Mintel’s market forecast, 2015-25
    • Forecast methodology
  6. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • COVID-19 scenario forecast for retail investment
      • Figure 14: COVID-19 scenario forecasts, 2016-26
    • An extended period of disruption will boost sales
    • A rapid recovery will slightly subdue investment sales
    • COVID-19 market disruption: risks and outcomes
      • Figure 15: Summary of Mintel scenario expectations and the impact on the retail investment market, 2021
  7. Market Segmentation

    • Investors turn to equities and mixed assets…
    • …but property funds continue to see significant outflows
      • Figure 16: Net retail sales of UK funds and recognised overseas funds, by asset type, Q3 2019-Q2 2021
    • ISA funds have consistently grown through the pandemic
      • Figure 17: Total ISA funds under management, 2020-21
  8. Channels to Market

    • Fund platform sales continue to grow…
      • Figure 18: Gross retail sales, by distribution channel, 2015-H1 2021
    • …whilst direct sales lose ground
  9. Market Drivers

    • Financial wellbeing and confidence held up despite pandemic pressures…
    • …although rising inflation is denting confidence
      • Figure 19: Financial confidence index, 2019-21
    • Savings ratio has peaked and is expected to return to pre-pandemic levels
      • Figure 20: Household savings ratio, 2019-21
    • Households have deposited £180 billion during the pandemic
      • Figure 21: Households’ deposits, 2019-21
    • Ethical investing shows sharp growth in 2020
      • Figure 22: Responsible investments – net retail fund inflows, Q1 2020-Q3 2021
  10. Regulatory and Legislative Changes

    • FCA announces new investment strategy to tackle investment harm
    • Cryptoassets set to remain an area of regulatory focus
    • Post-Brexit regulation updates
    • ESG regulation ramps up
  11. Market Share

    • Most firms saw an increase of assets under management in 2021
      • Figure 23: Top 10 asset managers, by total retail funds under management, 2020 and 2021
  12. Competitive Strategies and Launch Activity

    • Lloyds Banking Group plans to launch new investment arm worth £100 billion
    • High street banks offering cashback for new investors
    • Apps move to the fore
    • Market developments expand the reach of robo-advice services
    • ESG credentials take centre stage
  13. Advertising and Marketing Activity

    • Adspend up by 37% in 2020/21
      • Figure 24: Total above-the-line, online display and direct mail advertising expenditure on investments, 2016/17-2020/21
    • Major increase in TV adspend
      • Figure 25: Total above-the-line, online display and direct mail advertising expenditure on investments, by media type, 2016/17-2020/21
    • Baillie Gifford & Co leads with a large push in advertising
      • Figure 26: Total above-the-line, online display and direct mail advertising expenditure on products, by advertiser, 2018/19-2020/21
    • Southbank Investment Research ramps up digital adspend
    • TikTok bans investment promotions
    • Nielsen Ad Intel coverage
  14. Brand Research

    • Brand map
      • Figure 27: Attitudes towards and usage of selected brands operating in the UK investment market, 2021
    • Key brand metrics
      • Figure 28: Key metrics for selected brands, 2021
    • Brand attitudes: Hargreaves Lansdown has a good reputation and is trusted
      • Figure 29: Attitudes, by brand, 2021
    • Brand personality: Wealthify is perceived as fun
      • Figure 30: Brand personality – macro image, 2021
    • Nutmeg stands out as affordable and helpful
      • Figure 31: Brand personality – micro image, 2021
    • Brand analysis
    • Nutmeg has high level of awareness
      • Figure 32: User profile of Nutmeg, 2021
    • Vanguard is positively endorsed among its users
      • Figure 33: User profile of Vanguard, 2021
    • Wealthify perceived as most fun and accessible, but also deemed to be impersonal
      • Figure 34: User profile of Wealthify, 2021
    • Hargreaves Lansdown is the most trusted and prestigious brand
      • Figure 35: User profile of Hargreaves Lansdown, 2021
    • Trust in AJ Bell Youinvest is undermined by a lack of awareness
      • Figure 36: User profile of AJ Bell Youinvest, 2021
    • Fidelity is perceived as competent and reliable
      • Figure 37: User profile of Fidelity, 2021
  15. Ownership of Investment Products

    • A fifth of adults hold an investment product
      • Figure 38: Ownership of financial products, 2021
    • ISAs remain the key entry point to the investment market
      • Figure 39: Ownership of investment products, 2021
    • Cryptocurrencies move into the mainstream for young male investors
      • Figure 40: Ownership of investment products, by generation, 2021
  16. Channels Used to Manage Investments

    • Online investment platforms are most popular management method
      • Figure 41: Channels used to manage investments, 2021
    • Trading apps are emerging as a leading channel for under-35s
      • Figure 42: Channels used to manage investments, by age, 2021
    • Financial advisors are increasingly the preserve of those with high-value assets
      • Figure 43: Management of investments, by value of investments, 2021
  17. Motivations for Investing

    • Most have longer-term ambitions…
    • …but 16% are investing for fun
      • Figure 44: Motivations for investing, 2021
  18. Investment Intentions for Next 12 Months

    • A quarter of non-investors expect to start investing in the next 12 months
    • A lack of funds is the main barrier for those who rule out investing
      • Figure 45: Investment intentions over the next 12 months, 2021
    • Younger people are more likely to start investing over the next 12 months
      • Figure 46: Investment intentions over the next 12 months, by age, 2021
  19. Factors Influencing Choice of Investment Provider

    • Low fees and charges is the biggest factor determining choice of provider
      • Figure 47: Factors influencing choice of a new investment provider or platform, 2021
    • Choosing a well-known brand matters to younger investors
    • …whilst easy access to funds and online platforms appeal across the age groups
      • Figure 48: Factors influencing choice of a new investment provider or platform, by age, 2021
  20. Attitudes towards Investing

    • The vast majority are targeting long-term, planned growth…
    • …but under-45s also want excitement and are open to taking risks
      • Figure 49: Attitudes towards investing, 2021
    • Sustainable investing is increasingly important
  21. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  22. Appendix – Central Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 50: Forecast and prediction intervals for gross retail sales, 2021-26
    • Market drivers and assumptions
      • Figure 51: Key drivers affecting Mintel’s market forecast, 2020-25
    • Forecast methodology
  23. Appendix – COVID Scenario Performance Methodology and Assumptions

    • Scenario performance
      • Figure 52: Scenario forecasts for gross retail sales, 2016-26
    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

Below is a sample report, understand what you are buying.

Click to show report
2024 Sample Consumer Cover

Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted. Our reports are available to download in PDF and PPT formats.

Trusted by companies. Big and small.

Want to speak to us directly?

Contact us with your enquiry and our expert global team can help.

Get in touch