UK Savings 2018: Review, Forecasts, and Future Opportunities

UK Savings 2018: Review, Forecasts, and Future Opportunities

Summary

The UK retail savings market has been characterized by low levels of competition and low returns for several years. However, both competition and returns are increasing, albeit incrementally. Interest differentials between sight and time deposits are now diverging after a period of convergence. The end of cheap funding for banks has led to a steady increase in interest rates, but consumer inertia still prevails to the benefit of the big four banks (Barclays, HSBC, Lloyds Banking Group, and RBS Group).

Key Highlights

- The recent growth in real wages is improving consumers’ ability to save, but low unemployment levels and stable (albeit slow) economic growth are hindering their willingness to save.
- Pension liberalization is benefiting deposit-takers as retirees choose security over returns.
- Smaller savings providers gained 4.1% market share between 2010 and 2017, but mostly at the expense of the mid-ranking incumbents. The big four have not experienced a significant challenge to their dominance, mainly due to consumer inertia.
- 53% of consumers chose their savings provider because they already had another product with them, while 73% did not use a price comparison website when conducting research.

Scope

This report provides analysis of the factors driving the UK savings market. The report offers insight into -
- The macroeconomic factors affecting the market for deposits.
- Consumers’ attitudes and behavior towards saving and savings providers.
- Level of demand for personal financial management saving tools.
- Key new entrants in the market.

Reasons to buy

- Learn about the factors that will drive growth in deposits over the next few years.
- Understand how consumers are responding to regulatory and tax changes.
- See changes in market share since 2010.