2023
9
UK Deposit and Savings Accounts Market Report 2023
2023-03-31T04:07:30+01:00
OX1156821
2195
161955
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Report
en_GB
“Despite higher interest rates and increased competition, inflationary pressures are limiting the growth of the market. While consumers are finding it hard to save as a result of the cost…

UK Deposit and Savings Accounts Market Report 2023

£ 2,195 (Excl.Tax)

Description

Now more than ever, it is vitally important that financial services providers are ahead of the curve when it comes to consumer expectations and behaviour. Mintel’s UK deposits and savings account market report provides you with the information and intelligence to stay across the latest consumer trends, alongside the market statistics that really matter. Read on to discover more about our report.

UK Savings Market – Current Landscape

After years of ultra-low interest rates, apathy has taken hold among many savers, and there is very little appetite for switching to a new account or provider. However, this does not mean that there is no intention to save. In fact, half of consumers are planning to add to their savings in the next 12 months, despite the cost-of-living squeeze.

UK Deposits and Savings Accounts – Consumer Habits

Rising cost of living is making it harder for consumers to save. Despite this, more than a third of savers add small amounts to their savings as often as they can, rising to over half for under-35s. 

  • Consumer saving habits: 41% of savers prioritise saving for emergencies or unexpected events, so easy access is a top priority.
  • Consumer interests: Half of consumers are interested in sustainable or ethical saving products.
  • Consumer savings preferences: Almost half of consumers say that interest rates rises motivate them to prioritise saving in an ISA.

UK Deposits and Savings Accounts – What’s Next?

While providers have little influence on individual circumstances, there is an opportunity to help consumers through difficult periods and make saving easier. Purchase our full report to discover how your business can connect with consumers and grow during these uncertain times.

Read on to find out more about our UK Deposits and Savings Accounts Market Report. Looking for more information about UK financial services? Take a look at our UK Mortgages Market Report, or explore our extensive financial services market research.

Use this Report to Quickly Understand

  • The impact of inflation on the savings market.
  • The proportion of adults who have savings and how much they have saved.
  • Savings account ownership and provider rankings.
  • Consumer saving habits.
  • Future saving intentions over the next 12 months.

Financial Service Products and Brands Covered in this Report

Products: Instant or easy-access accounts, Limited-access accounts, Notice accounts, Fixed-term accounts or bonds, Regular savings accounts, Cash ISAs.

Brands: Nationwide, Barclays, NatWest, Lloyds Bank, Virgin Money, Starling Bank, NS&I, first direct.

Expert Analysis from a Specialist in the Finance Sector

This report, written by Great Staselyte, a leading financial services analyst, delivers in-depth commentary and analysis to highlight current trends in the UK deposits and savings accounts market and add expert context to the numbers.

Despite higher interest rates and increased competition, inflationary pressures are limiting the growth of the market. While consumers are finding it hard to save as a result of the cost of living crisis, there is a scope for savings providers to support them through economic uncertainty.

Greta Staselyte

 

Greta Staselyte
Financial Services Analyst

 

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for the retail savings market
      • Figure 1: Category outlook for deposit and savings accounts, 2023-27
    • The market
    • Market growth will be limited in 2023 but will continue to grow at a steady pace
      • Figure 2: Market forecast for total household deposit balances, 2017-27
    • Value of time deposits increases by 31%
      • Figure 3: Household deposit balances, by product type, 2017-22
    • Interest rates increase sharply after historic low
      • Figure 4: Average monthly quoted household deposit and cash interest rates, 2015-23
    • Final rules and guidance for a new Consumer Duty set
    • Companies and brands
    • LBG remains the biggest savings provider in the UK
      • Figure 5: Total retail deposits for the largest 10 providers, shown on a group basis, UK, 2022
    • Advertising expenditure increases in 2022 driven by new market entrant
      • Figure 6: Total above-the-line, online display and direct mail advertising expenditure on deposits and savings accounts, 2018-22
    • The consumer
    • 68% of consumers have some level of cash savings
      • Figure 7: Value of cash savings, by age, 2022
    • Easy access is a valued feature
      • Figure 8: Ownership of cash savings products, 2022
    • Majority of savers choose major banks to hold savings
      • Figure 9: Savings providers, 2022
    • More than a third of savers put money away regularly
      • Figure 10: Savings habits, 2022
    • Consumers prioritise saving for emergencies or unexpected events
      • Figure 11: Savings priorities, 2022
    • Despite cost-of-living squeeze, half of savers plan to add to their savings
      • Figure 12: Future savings intentions, 2022
    • Rising cost of living is making it hard for consumers to save
      • Figure 13: Attitudes towards saving, 2022
  3. Issues and Insights

    • Cost-of-living crisis limits consumers’ ability to save
    • Easy access to savings is highly valued
    • Scope to expand green savings product market
  4. Market Size and Performance

    • Household savings growth was limited in 2022
      • Figure 14: Market size for the savings market, 2017-22
      • Figure 15: Market size for the savings market, 2017-22
  5. Market Forecast

    • Growth in households’ deposits will be limited in 2023…
      • Figure 16: Category outlook for deposit and savings accounts, 2023-27
    • …but will continue to grow at a steady pace
      • Figure 17: Market forecast for total household deposits balances, 2017-27
    • Learnings from the last income squeeze
      • Figure 18: Household deposits balances, 2006-11
    • Forecast methodology
  6. Market Segmentation

    • Value of time deposits increases by 31%
    • Interest-bearing sight deposits remain the largest segment
      • Figure 19: Household deposit balances, by product type, 2017-22
    • NS&I and Cash ISA market share remains unchanged
  7. Market Drivers

    • Interest rates increase sharply after historic low
      • Figure 20: Average monthly quoted household deposit and cash ISA interest rates, 2015-23
    • Inflation continues to squeeze household budgets…
    • …and erode real wages
      • Figure 21: Annual changes in CPI, average regular wages and average real regular wages (adjusted for CPI), 2007-22
    • Unemployment is at a near 50-year low
      • Figure 22: Unemployment rate (aged 16 and over, seasonally adjusted), 2007-22
    • Savings ratio remains above pre-pandemic levels but is expected to fall
      • Figure 23: Household savings ratio, 2017-22
    • Consumers’ financial wellbeing has fallen from the highs of 2021…
      • Figure 24: Household financial wellbeing index, 2016-23
  8. Regulatory and Legislative Changes

    • Final rules and guidance for a new Consumer Duty set
    • FCA proposes ways to make financial advice more accessible
    • Government and regulators remain committed to Open Banking
  9. Market Share

    • LBG retains the largest share of retail deposits
      • Figure 25: Total retail deposits for the largest 10 providers, shown on a group basis, UK, 2021 and 2022
  10. Competitive Strategies and Launch Activity

    • Savings market sees increase in competition and activity…
    • …as digital-only banks and FinTechs challenge the status quo
    • Providers use prizes to attract consumers
    • Green savings products becoming more competitive
  11. Advertising and Marketing Activity

    • Savings market sees an increase in ATL adspend
      • Figure 26: Total above-the-line, online display and direct mail advertising expenditure on deposits and savings accounts, 2018-22
    • Advertising for regular savings accounts nearly doubles
      • Figure 27: Above-the-line, online display and direct mail advertising expenditure on savings products, by type of product, 2021-22
    • JP Morgan’s digital bank Chase was the top spender in 2022…
    • …but other providers also ramped up adspend
      • Figure 28: Top 10 advertisers of above-the-line, online display and direct mail advertising on savings products, 2021-22
    • Nielsen Ad Intel coverage
  12. Brand Research

    • Brand map
      • Figure 29: Attitudes towards and usage of selected brands, 2023
    • Key brand metrics
      • Figure 30: Key metrics for selected brands, 2023
    • Brand attitudes: customers perceive Nationwide as a firm with a good reputation
      • Figure 31: Attitudes, by brand, 2023
    • Brand personality: Lloyds Bank and NatWest are deemed to be accessible
      • Figure 32: Brand personality – Macro image, 2023
    • Starling Bank is seen as progressive
      • Figure 33: Brand personality – Micro image, 2023
    • Brand analysis
    • Barclays is perceived as reliable, competent and helpful brand
    • Nationwide has high commitment and awareness levels
    • NatWest benefits from high levels of awareness and usage
    • NS&I is viewed as somewhat different from others
    • Lloyds Bank benefits from frequent use
    • First Direct enjoys high awareness amongst older demographics
    • Virgin Money seen as a fun
    • Starling Bank is considered progressive
  13. Value of Cash Savings

    • Almost half of adults have more than £1,000 in cash savings…
      • Figure 34: Value of cash savings, by age, 2022
    • …but one in four lack financial resilience
      • Figure 35: Value of cash savings, by household income, 2022
    • Nearly a third of savers increased their savings in 2022
      • Figure 36: Change in value of savings compared to a year ago, 2022
  14. Ownership of Cash Savings Products

    • Easy access remains the top priority
      • Figure 37: Ownership of cash savings products, 2022
    • Scope to expand cash ISA ownership
    • Room to increase take-up of limited-access or fixed-rate savings accounts
      • Figure 38: Ownership of cash savings products, by value of cash savings, 2022
  15. Savings Providers Used

    • Top six banking providers continue to dominate the savings market
      • Figure 39: Savings providers, 2022
    • Opportunity to attract consumers with lower savings balances
      • Figure 40: Savings providers, by total value of cash savings, 2022
  16. Savings Habits

    • Personalise value proposition based on saving habits
      • Figure 41: Savings habits, 2022
    • Nearly one in four save what is left after bills and spending
  17. Savings Priorities

    • Consumers prioritise saving for emergencies or unexpected events…
    • …but one in four are saving for household bills
      • Figure 42: Savings priorities, 2022
    • Highlight how savings products can help consumers achieve their goals
  18. Future Savings Intentions

    • Despite cost-of-living squeeze, half of savers plan to add to their savings
      • Figure 43: Future savings intentions, 2022
    • Incentivise savers to switch
    • Rising household costs are driving consumers to use savings
      • Figure 44: Reasons to dip into savings over the next year, 2022
  19. Attitudes towards Saving

    • Rising prices make saving harder but highlight the benefits of putting cash away…
    • …while rising interest rates offer stronger motivation
      • Figure 45: Consumer attitudes towards saving, 2022
    • Scope to expand green savings product market
      • Figure 46: Agreement with the statement ‘I am interested in sustainable/ethical savings products’, by generation, 2022
  20. Appendix – Data Sources, Abbreviations and Supporting Information

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

    • Market forecast and prediction intervals
      • Figure 47: Market forecast for total deposit balances, 2022-27
    • Market drivers and assumptions
    • 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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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.

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