2022
9
UK Deposit and Savings Accounts Market Report 2022
2022-03-25T03:09:45+00:00
OX1100855
2195
149420
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Report
en_GB
“The savings market will be hit by rising inflation in 2022 as rising energy bills and other costs squeeze consumers’ budgets and ability to save, particularly in lower-income households. Savings…

UK Deposit and Savings Accounts Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Deposit and Savings Accounts report identifies consumer attitudes towards the savings trends, the banking industry, and intentions to switch in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Deposit and Savings Accounts market in the UK.

Current Market Landscape

As a result of persistently low interest rates, savings providers are using alternative methods such as prize draws or financial incentives to persuade consumers to move their deposits into savings accounts offering higher interest rates. However, flexibility remains a key priority for consumers, with many not willing to move funds into fixed-term accounts amid the current economic uncertainty.

  • 57% of consumers still hold their savings in current accounts which offer little returns.
  • 55% of savers are planning to add to their savings over the next 12 months.
  • 20% of those with cash savings are likely to invest some of their savings into an investment product over the next 12 months.

Rising inflation will be of increasing concern for the savings market as households will increasingly have less disposable income to set aside for savings, and many will have to dip into pent-up savings which have accumulated over lockdown periods. Increasing inflation will likely see further increases to the Bank of England base rate over the next year, but interest rates will remain well below inflation, meaning that many consumers’ savings will decline in real terms.

Future Market Trends in Deposit and Savings Accounts

Savings providers are likely to come under greater competition from the investment market as some savers look for higher returns. This will be supported by regulatory intervention, with the FCA encouraging those with savings of £10,000 or more to consider investing to avoid their savings being eroded by rising inflation, and to boost wealth creation.

One of the biggest opportunities for the savings market currently is the evolution of savings platforms, which have disrupted the market over the past few years. Increasingly, investment firms are entering this gap in the market, which is driving competition amongst savings platform providers keen to offer the best interest rates to consumers. This in turn is placing pressure on banks and building societies to raise their savings interest rates in order to remain competitive.

Read on to discover more details or take a look at all of our UK Financial Services market research

Quickly understand

  • The impact of rising inflation on the retail savings market.
  • Exploring what the COVID-19 recovery phase will look like for the savings market.
  • The proportion of adults who have savings and how much they have.
  • Where and how people hold their savings, eg in which products and with which providers.
  • Savings habits and interests over the last 12 months.
  • Intentions and factors impacting switching to other products/providers/asset classes over the coming year.

Covered in this report

Brands: Lloyds Banking Group, NS&I, Barclays, NatWest Group, Nationwide, HSBC, Santander, Virgin Money, TSB Bank, Co-op Bank, Bank of Scotland, First Direct, Monzo, Starling Bank, Tesco Bank, M&S Bank, Chip, Plum, Post Office.

Expert analysis from a specialist in the field

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

The savings market will be hit by rising inflation in 2022 as rising energy bills and other costs squeeze consumers’ budgets and ability to save, particularly in lower-income households. Savings platforms offer a key opportunity to increase competition in the retail savings market by giving consumers sight of the most attractive rates. Investment firms pose a growing threat to savings, with rising inflation providing greater incentive for consumers to seek higher returns.

Jennie Bryans
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
    • Household deposit balances
  2. Executive Summary

    • The five-year outlook for the retail savings market
      • Figure 1: Category outlook, 2022-26
    • The market
    • Household deposits forecast to hit £2.24 trillion in 2026
      • Figure 2: Market forecast total household deposit balances, 2016-26
    • Instant-access and current accounts most popular for holding savings
      • Figure 3: Household deposit balances, by product type, 2017-21
    • FCA launches campaign to encourage savers to turn to investing
    • Companies and brands
    • LBG remains the biggest savings provider in the UK
      • Figure 4: Total retail deposits for the largest 10 providers, shown on a group basis – UK, 2020 and 2021
    • Digital drive persists in the savings market
    • Advertising expenditure declines sharply again in 2021
      • Figure 5: Total above-the-line, online display and direct mail advertising expenditure on deposits and savings accounts, 2017-21
    • The consumer
    • Two thirds of UK adults have some level of cash savings
      • Figure 6: Value of cash savings, by age, 2022
    • Current accounts continue to be the most popular product for holding savings
      • Figure 7: Ownership of cash savings products, 2021 vs 2022
    • Majority of savers choose major banks to hold savings
      • Figure 8: Savings providers, 2022
    • Use of digital channels is almost ubiquitous
      • Figure 9: Management of savings, 2022
    • Three fifths have increased their savings over the past 12 months
      • Figure 10: Savings habits, 2022
    • Over half of savers are hoping to add to savings over the coming year
      • Figure 11: Saving intentions over the coming year, 2021 vs 2022
    • Females prioritise flexible access more than males
      • Figure 12: Factors influencing provider choice, 2022
  3. Issues and Insights

    • Rising inflation impacting household budgets
    • Savers continuing to deposit savings in current accounts
    • Savings platforms driving competitive rates in the market
  4. Market Size and Performance

    • Household savings grew by nearly 7% in 2021
      • Figure 13: Market size for the savings market, 2016-21
  5. Market Forecast

    • Growth in the savings market expected to dip in the short term…
      • Figure 14: Category outlook, 2022-26
    • …but will continue to rise at a steady pace
      • Figure 15: Market forecast total household deposit balances, 2016-26
      • Figure 16: Forecast of total household deposit balances, 2016-26
    • Market drivers and assumptions
      • Figure 17: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast methodology
  6. Market Segmentation

    • Instant-access and current accounts account for 50% of the savings market…
      • Figure 18: Household deposit balances, by product type, 2017-21
    • …whilst time deposits decreased by 6% for the second year running
    • Cash ISAs and NS&I declined in 2021
  7. Market Drivers

    • Inflationary pressures are mounting
      • Figure 19: Consumer concerns about household finances, 2021-22
    • The conflict in Ukraine will hurt the UK economy
    • Consumers’ financial wellbeing has slipped from its recent high point
      • Figure 20: Household financial wellbeing index, 2019-22
    • Interest rates increase slightly after historic low
    • Fixed-rate products see slight improvement
      • Figure 21: Average monthly quoted household deposit and cash ISA interest rates, January 2014-January 2022
    • GDP reached pre-pandemic levels in November 2021…
    • …but the post-COVID-19 bounce-back will be followed by a period of slower growth
      • Figure 22: Key economic data, 2020-26
    • Household savings ratio declines sharply
      • Figure 23: Household savings ratio, Q1 2019-Q3 2021
  8. Regulatory and Legislative Changes

    • FCA launches campaign to encourage savers to turn to investing…
    • …but is keen to protect new-to-market customers
    • FCA launches new Consumer Duty
    • Increasing protection for consumers using digital channels
  9. Market Share

    • LBG retains the largest share of retail deposits in the UK
      • Figure 24: Total retail deposits for the largest 10 providers, shown on a group basis – UK, 2020 and 2021
  10. Competitive Strategies and Launch Activity

    • Competition in savings market increasing as interest rates rise
    • Companies increasingly using prize draws to attract customers
    • Digital drive in the savings market
    • Sustainability increasing in prominence
    • Investment firms and insurers move into the savings market
  11. Advertising and Marketing Activity

    • Total adspend for deposits and savings decreases sharply in 2021…
      • Figure 25: Total above-the-line, online display and direct mail advertising expenditure on deposits and savings accounts, 2017-21
    • …but advertising increased for regular savings accounts
      • Figure 26: Above-the-line, online display and direct mail advertising expenditure on savings products, by type of product, 2019-21
    • Nationwide remains the top spender, despite reducing adspend by a third
    • Yorkshire Building Society and NS&I ramp up adspend
      • Figure 27: Top 10 advertisers of above-the-line, online display and direct mail advertising on savings products, 2020 and 2021
    • Nielsen Ad Intel coverage
  12. Brand Research

    • Brand map
      • Figure 28: Attitudes towards and usage of selected brands, 2022
    • Key brand metrics
      • Figure 29: Key metrics for selected brands, 2022
    • Brand attitudes: Customers perceive Barclays as a firm that rewards loyalty
      • Figure 30: Attitudes, by brand, 2022
    • Brand personality: Marcus by Goldman Sachs is deemed to be exclusive
      • Figure 31: Brand personality – macro image, 2022
    • Nationwide is seen as an honest and reassuring brand
      • Figure 32: Brand personality – micro image, 2022
    • Brand analysis
    • Barclays is skewed towards younger groups
    • Nationwide has high commitment levels
    • NatWest benefits from frequent use
    • Halifax is considered as fun, and has high levels of accessibility
    • NS&I stands out from the crowd
    • Yorkshire Building Society lacks commitment from customers
    • Marcus by Goldman Sachs is deemed to be exclusive
    • First Direct seen as progressive
  13. Value of Cash Savings

    • Two thirds of UK adults have some level of cash savings
      • Figure 33: Value of cash savings, 2022
    • Value of savings rises with age
      • Figure 34: Value of cash savings, by age, 2022
    • Rising inflation set to hit lower-income households the hardest
  14. Ownership of Cash Savings Products

    • Current accounts remain most popular product for holding savings
      • Figure 35: Ownership of cash savings products, 2021 vs 2022
    • Majority keep their savings in two or more products
      • Figure 36: Repertoire analysis of cash savings products owned, 2022
  15. Savings Providers Used

    • Majority of savers keep their savings with major banks
      • Figure 37: Savings providers, 2022
    • 25-34s are embracing digital banks…
    • …whilst Nationwide’s customer base skews to older generations
      • Figure 38: Savings provider, by product type, 2022
  16. Channels Used to Manage Savings

    • Use of digital channels is almost ubiquitous
      • Figure 39: Management of savings, 2022
    • Younger consumers more likely to use telephone banking
  17. Savings Habits

    • Three fifths have increased their savings over the past 12 months…
      • Figure 40: Savings habits, 2022
    • …but rising prices are making it hard for people to save
      • Figure 41: Response to ‘Rising prices are making it hard for me to save right now’, by presence of children, 2022
    • Young savers are most interested in sustainable savings products
  18. Savings Intentions

    • Over half of savers are hoping to add to savings over the coming year
      • Figure 42: Saving intentions over the coming year, 2021 and 2022
    • A fifth expect to invest…
    • …rising to 30% of savers with more than £50,000 put away
      • Figure 43: Saving intentions over the coming year, by value of cash savings, 2022
    • Interest in switching rises among higher-value savers
  19. Factors Influencing Provider Choice

    • Consumers are keen for flexible access and financial incentives
      • Figure 44: Factors influencing provider choice, 2022
    • Half of over-55s focus on leading interest rates…
    • …while under-35s focus on tech benefits
      • Figure 45: Factors influencing provider choice, by age, 2022
    • Younger people driving savings platform usage
      • Figure 46: Savings platforms usage, by age, 2022
  20. Appendix – Data Sources, Abbreviations and Supporting Information

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

    • Market forecast
      • Figure 47: Forecast of total household deposit balances, 2016-26
    • Market drivers and assumptions
      • Figure 48: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast 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.

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