UK Deposit and Savings Accounts market report
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Providing the most comprehensive and up-to-date information and analysis of the Deposit and Savings Account market, and the behaviours, preferences and habits of the consumer.
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Products covered in this report
The focus of this report is retail deposit and savings accounts for the adult market. Cash ISAs and current accounts are the subjects of separate reports, although these will also be covered here due to their close affiliation, particularly cash ISAs. Children’s savings accounts will not be covered here, and are again the subject of a separate report.
There are various types of deposit and savings account available to UK adults. The main ones are as follows:
- easy access (or instant access) savings account – the most widely available and commonly held type of account, which does not impose any restrictions on making withdrawals and provides either a variable interest rate or a fixed/guaranteed interest rate for an introductory period
- notice account – this is where the account holder must give a certain number of days’ notice before making a withdrawal so as not to lose any interest
- fixed-term/fixed-rate savings account or bond – offers a fixed rate for a fixed term, usually between one and five years
- regular savings account – where the account holder is required to make regular monthly payments (usually ranging from £25 to £250 or £500 a month) in return for a higher interest rate
- cash ISA (individual savings account) – similar to ordinary savings accounts, in that there are different varieties (eg instant access, fixed term), but all interest earned is paid tax free. In 2017/18, individuals aged 16+ can invest or save up to £20,000 in an ISA.
- National Savings & Investments (NS&I) – provide a range of tax-free cash savings products, backed by HM Treasury, the most popular of which are Premium Bonds.
Also covered in Mintel’s consumer survey, but not included in the market size data (retail balances):
- offshore savings account – this is where the account is set up and run by a bank, or a bank’s subsidiary, based outside of the UK, usually in the Channel Islands, the Isle of Man or Ireland. Offshore accounts can offer certain tax benefits and multi-currency options, but are not covered by the UK’s Financial Services Compensation Scheme.
Competitor products include:
- Peer-to-peer saving – peer-to-peer lending websites work by matching up savers (known as ‘lenders’) directly with people or small businesses looking to borrow – at interest rates agreed by both parties.
- High interest current account – a current account that offers comparatively high rates of interest (ranging from 1% to 5% AER) on in-credit balances, usually up to a set limit. They often come with strings attached (eg minimum monthly deposits, minimum number of direct debits), and may charge a monthly fee.
Expert analysis from a specialist in the field
Written by Sarah Hitchcock, a leading analyst in the Fincancial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
Savers are having a grim time, with an ultra-low base rate and rising inflation making it near-impossible to achieve a real return. The introduction of funding schemes by the Bank of England has also reduced banks’ reliance on retail deposits, removing the pressure to aggressively compete. Many savers, therefore, are turning to alternative products, such as high interest current accounts and peer-to-peer lending, in pursuit of better yields.
Senior Financial Services Analyst
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