Long-term Savings and Investments - UK : Market Research Report

Long-term Savings and Investments - UK

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2008 - 119 Pages

ISSUES IN THE MARKET: Mintel asks…; Product definitions; Abbreviations
Market in Brief: The key findings of Mintel’s consumer research - financial priorities; Product ownership and wealth; Attitudes to risk; Investor behaviour; Popular advice sources; Northern Rock reaction; Investment bonds more popular than unit trusts or OEICs; 2004-07 saw increased investment in all the main asset classes; Storm clouds gather; Market leaders; Promotional activity; Distribution trends
Economic and Investment Climate: Key points; An economic overview; Slower growth forecast for the domestic economy; Walking a tight rope: the art of controlling inflation; Increased stockmarket volatility; Is the bear back?; Markets in turmoil; Looking for a silver lining; Consumer sentiment in the doldrums; Consumers cut back on spending…; …and put greater onus on saving
The Consumer - Financial Priorities in 2008: Key points; About Mintel’s consumer survey; ‘Making ends meet’ is most people’s main financial concern; Men and women are driven by different savings goals; AB and C2 Internet users are most likely to save; Regional variation; More than two fifths of renters say debt repayment is a financial priority; Strong link between long-term savings products and protection products
The Consumer - Asset Ownership: Key points; Household sector was worth nearly £7 billion in 2006; Cash favoured over equities; Buy-to-let investors are particularly keen on diversifying…; …and saving for retirement; Asset ownership is greater among men than women; Broadsheets and mid-market tabloids offer ad opportunities; One in seven Internet users have five or more product types; Among those with savings, a third have over £10,000; Wealth increases with age; Long-term savings goals are more prevalent among the rich
Market Size - An Overview: Key points; Regulated retail investment sales; Investment bonds accounted for nearly three fifths of investment sales
Sector Performance: Key points; Amounts invested in NS&I boosted by ‘flight to quality’; Gilts benefit from a doveish stance on interest rates; UK corporate bonds fall out of favour; Demand for investment bonds picks up; Unit-linked bonds have fared well over the 2003-07 period; Typical purchasers are retirees and higher rate taxpayers; Proposed tax changes threaten their appeal; Offshore may be off the menu; Healthy demand for unit trusts and OEICs; Property funds - a recent success story…; …although their performance is now on the slide; The arrival of REITs; Investors plough more into stocks and shares ISAs; The value of funds held in ISAs grew by 15% in 2007; Around 13% of UK equity is owned by private individuals
The Consumer - Understanding Risk: Key points; Investment risk; Past mistakes undermine confidence; Education, education, education; Adventurous men, cautious women; Segmenting savers into five typology groups; Confident Investors; Cautious Savers; Risk-averse; Disinterested; The Disinterested are more focused on ‘making ends meet’ than saving; Confident Investors have the most diversified portfolios…
The Consumer - Reaction to Northern Rock: Key points; How the crisis unfolded; Uncertain future; The fallout; More than half of savers say that they’ll think more carefully about where to save or invest in future; The under-35s have been most affected by the crisis; Over a third of bond and shareholders have reviewed their portfolios since the crisis; Northern Rock’s savings customers tend to be on the wealthier end of the spectrum; Clusters conform to type
Largest Investment Bond Providers: Key points; Halifax Life retains its leader position in the single-premium life sector
Largest Fund Managers: Key points; Invesco Perpetual is the largest unit trust/OEIC fund manager…; …while Halifax claims top spot in the ISA fund sector
Brand Communication and Advertising: Key points; Adspend on savings and investment products up slightly in 2006/07; ING Direct continues to be the highest-spending advertiser; TV advertising is suitable for simple savings accounts, while the trade press is relied upon to promote more complex products
Selling Channels: Key points; Intermediaries reign supreme in the investment market; IFAs are responsible for the lion’s share of investment bond sales; Unit trusts and OEICs: the main routes to market; Intermediaries generate the lion’s share of unit trusts and OEIC sales…; …while fund supermarkets are stealing a march in the ISA fund market; The ascent of the fund supermarkets
The Consumer - Sources Used for Advice: Key points; Most savers rely on bank staff to give them investment advice; Reliance on different advice sources alters with age; Buy-to-let investors are more likely to use a wealth management company or private bank; The greater the wealth, the greater the need for expert advice; Cautious Savers tend to rely on bank and building society staff, while Confident Investors are prone to using an IFA
The Consumer - Experiences of Saving and Investing: Key points; Savvy savers?; Knowledge comes with age…; …and experience; The better off are the most independent; Confident Investors and Cautious Savers are more prone to taking expert advice; Further analysis
Appendix - Profile of Savings Clusters (Part 1): Figure 67: Profile of savings clusters, by gender, age, socio-economic group, working status, tenure and household income, January 2008
Appendix - Profile of Savings Clusters (Part 2): Figure 68: Profile of savings clusters, by newspaper readership, Internet usage, TV reception, mobile phone provider and supermarket regularly visited, January 2008

Abstract

The savings and investment market has been fairly buoyant over the past few years. More attractive interest rates on savings accounts and cash ISAs and, from mid-2004 to mid-2007, an improving stockmarket have led to strong inflows into deposits and equity investments. However, there are fears that the recent bull market is now over, as the past few months have witnessed increasing market volatility and sharp falls in share prices. Confidence has also been knocked by the sub-prime crisis and uncertainty surrounding future economic growth. The US housing market has collapsed, and there are fears that the trend could replicate in the UK. The commercial property sector looks particularly weak at the moment, and property funds are rapidly losing their appeal.

Mintel asks…

What are the prevailing macro-economic and investment conditions?
What is the size of the main sectors within the investment market, and how have they performed recently?
Who are the leading investment bond providers and largest fund managers?
How are products sold and marketed?
What savings and investments do consumers have, and what is their level of investible assets?
What sources of financial advice do people rely on? Have they had poor investment advice in the past?
What do people think of the troubles at Northern Rock? Have they been affected by it? And has it changed their attitude towards saving and investing?
What do people want from their savings and investments? Do they understand the effect inflation has on their savings? And what is their attitude to risk?
What are people’s main financial priorities in 2008?

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Long-term Savings and Investments - UK

Table of Contents

Abstract