Retail Bank Savings in the UK: Forecasts and Future Opportunities

Retail Bank Savings in the UK: Forecasts and Future Opportunities


This report offers a forecast of the personal savings market in the UK, analyzes the factors that will determine this outlook, and examines savers’ intentions and behavior. It offers a forecast of personal savings deposits up to 2019, analyzes the factors determining the outlook of the savings market, and looks at what providers are doing to improve their performance. The report concludes with analysis of drivers of provider choice and how banks can harness the personal goals of consumers and encourage them to save.

Key Findings

Identify the size, growth, major segments, and leading players in the retail savings & investments market in the United Kingdom
Understand the future growth prospects of the United Kingdom retail savings & investments market
Macroeconomic indicators provide insight into general trends within the UK economy

Reasons To Buy

What was the size of the UK retail savings & investments market by value in 2015?

What will be the size of the UK retail savings & investments market in 2020?

What factors are affecting the strength of competition in the United Kingdom retail savings & investments market?
How has the market performed over the last five years?

What are the main segments that make up the United Kingdom's retail savings & investments market?

Key Highlights

The entry of new challenger banks has induced competition in the savings market. Mobile is increasingly becoming a key channel for retail financial services, either via apps or new secure mobile-optimized sites. Providers must concentrate their efforts to develop mobile-channel capabilities to attract savers’ cash.
Banks are using apps and alerts to boost spontaneous saving of small amounts based upon observed spending behavior. These algorithms are in turn encouraging consumers to become more consistent with their savings.
Banks should take steps to build rewards based on consumers’ motivations. By giving customers the ability to set goal-based savings targets, banks will be able to better engage with them. For example, in cases where customers have stated that they are saving for a holiday, providers should offer deals on travel insurance and foreign exchange as they close in on their goal.

Retail Savings Growth is Slowing But Will Remain Positive
Deposit accounts are expected to remain the UK’s preferred asset class for saving
Increasing consumer confidence levels are reducing consumers’ need to save
Declining wage growth and a stagnant unemployment rate will restrict savings growth
Diminishing interest rate differentials between instant-access and fixed-term accounts are acting as a disincentive
New regulations aiming to change the UK savings landscape
The Personal Savings Allowance will boost the savings market
Budget : cash ISA allowance up to £, in
The PSA will reduce the relative appeal of ISAs
The FCA has announced new rules to encourage competition and give customers a better deal
Providers Reacting to Market Changes
Lloyds Banking Group retains its dominance in the UK retail savings market
Challenger banks are competing on price
Providers are harnessing mobile capabilities to attract savers
Santander’s ISA app helps consumers be more proactive about saving
Dyme aims to encourage millennials to save more
Moven uses gamification to incentivize saving
Lloyds Bank’s Swave app encourages consumers to save little and often
Personal financial management apps can help drive savings behavior
HSBC’s Nudge app helps users save money and be more aware of their spending habits
Nationwide is targeting long-term customers by rewarding loyalty
Familiarity & Convenience Will Help Drive Savings
Consumers prefer instant access over fixed-term accounts
Familiarity and convenience are drivers of provider choice
Harness consumers’ personal goals to encourage saving
Providers must heed change and react accordingly
Further Reading
Ask the analyst
About MarketLine
List of Figures
Figure 1: Retail deposits account for half of retail savings and investments in the UK
Figure 2: Retail deposits will experience sluggish growth up to 2019
Figure 3: Growing consumer confidence has reduced consumers’ desire to save
Figure 4: With no significant pick-up in earnings, consumers’ capacity to save is expected to reduce
Figure 5: Interest rates on savings accounts continue to fall
Figure 6: Savers have suffered in recent years with a continual rate reduction on cash ISAs
Figure 7: The lowest interest rates offered by 32 providers of easy-access cash savings accounts
Figure 8: Lloyds Banking Group holds a quarter of all retail deposit balances in the UK
Figure 9: Challenger banks offer the best easy-access deals
Figure 10: Moven users can track their spending and saving in real-time
Figure 11: The HSBC Nudge app prods customers to spend less and save more
Figure 12: Nationwide rewards loyal savers with a higher interest rate
Figure 13: Savers regard instant access to be more essential in a savings account
Figure 14: Consumers are shifting from fixed-term to instant-access deposits
Figure 15: Existing relationship and rates offered influence consumers’ decision when taking out a savings account

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