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Savings - Ireland - January 2016

Savings - Ireland - January 2016

After a prolonged period of time in which consumers’ motivation to save far exceeded their financial capacity to save, consumers now finally have far greater capacity to start saving or add to existing savings. This is particularly true of RoI consumers, who felt the effects of the recession far more severely than their NI counterparts, but, equally, are feeling the effects of the recovery to a far greater degree, too.

– Brian O’Connor, Senior Consumer Analyst

This report discusses the following key topics:

Investments yet to catch the eye of Irish consumers

Future growth to come from occasional rather than regular savers

Consumers to stick with easy access accounts until returns improve


OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
All-Ireland savings market valued at €141.6 billion in 2015
Figure 1: Total deposits from private households, IoI, RoI and NI, 2011-21
Growth in coming years to be primarily centred around RoI market
Figure 2: Index of total deposits from private households, RoI and NI, 2011-21
Unemployment rates falling as a result of new job creation
Consumer confidence on the up across Ireland
Only 26% in NI, 18% in RoI can afford to save on regular basis
Return earned by consumers on savings is negligible at best
The consumer
Most Irish consumers have at least some savings
Figure 3: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), NI and RoI, November 2015
Standard savings accounts are the most popular savings product
Figure 4: Ownership of selected savings and investment products, NI and RoI, November 2015
Broadly positive expectations for savings over coming months
Figure 5: Consumer expectations for savings and investments in the next six months, NI and RoI, November 2015
What it means
ISSUES AND INSIGHTS
Investments yet to catch the eye of Irish consumers
The facts
The implications
Future growth to come from occasional rather than regular savers
The facts
The implications
Consumers to stick with easy access accounts until returns improve
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Unemployment rates falling as a result of new job creation
Consumer confidence on the up across Ireland
Only 26% in NI and 18% in RoI can afford to save on regular basis
Return earned by consumers on savings is negligible at best
MARKET SIZE AND FORECAST
Total value of Irish savings almost €142 billion in 2015
Figure 6: Total deposits from private households, IoI, RoI and NI, 2011-21
Majority of savings held in easy access savings accounts in RoI
Figure 7: Composition of deposits, €bn, RoI, 2015
Strong rise in popularity of easy access accounts over last 5 years
Figure 8: Composition of deposits, %, RoI, 2005, 2010 & 2015
Value of all-Ireland savings market to reach €165 billion by 2021
Figure 9: Index of total deposits from private households, RoI and NI, 2011-21
MARKET DRIVERS
Unemployment coming under control in NI and RoI
Figure 10: Unemployment rate, %, NI, 2012-15
Figure 11: Number in employment, 000s, NI, September 2012-November 2015
Steady decline in RoI unemployment
Figure 12: Unemployment rate, %, RoI, December 2013-December 2015
Figure 13: Number employed, part-time and full-time, 000s, Q3 2013-Q3 2015
Consumers feeling confident and optimistic – and inclined to spend
NI consumer confidence at highest point since 2008
Figure 14: How consumers rate own current financial position compared to one year ago, NI, October 2015
RoI consumer confidence at highest point since January 2006
Figure 15: How consumers rate the outlook for their own financial position in one year’s time, RoI, December 2015
Figure 16: How consumers rate the current buying environment for large household purchases, RoI, December 2014 and December 2015
A third of RoI consumers would save any surplus cash they had
Figure 17: Consumers’ intentions for any surplus money, RoI, December 2015
RoI consumers unsure as to whether now is a good time to save
Figure 18: Index of consumers’ assessment of savings environment, RoI, January-December 2015
Future intent exceeds past behaviour when it comes to saving
Figure 19: Ways that consumers have spent their money in the last three months, NI and RoI, November 2015
Figure 20: Ways that consumers intend to spend their money in the next three months, NI and RoI, November 2015
Only a minority of consumers in a position to save regularly
Figure 21: How consumers rate current financial situation, RoI and NI, November 2015
No real change of late in proportion of consumers who are ‘financially healthy’
Figure 22: Consumers who rate their current financial situation as being ‘Healthy’, NI and RoI, July 2013-November 2015
Increase among RoI consumers in number of consumers who are ‘financially OK’ ...
Figure 23: Consumers who rate their current financial situation as being ‘OK’, NI and RoI, July 2013-November 2015
...which likely explains change in proportion of consumers with no savings
Figure 24: Consumers who currently have no savings or investments, NI and RoI, October 2014 & November 2015
Interest rates doing little to entice consumers to save more
Figure 25: Retail interest rates, deposits, instant access, UK (including NI) and RoI, December 2010-December 2015
COMPETITIVE STRATEGIES
HSBC, Halifax and Nationwide launch Help to Buy ISAs
Post Office offers innovative online ISA
HSBC rewards loyalty
Nationwide offers customers greater flexibility
ISAs under threat from Personal Savings Allowance
Santander continues to lead despite rising fees
COMPANIES AND BRANDS
Allied Irish Bank/First Trust Bank
Savings products
An Post
Savings products
Bank of Ireland
Savings products
Co-operative Bank
Savings products
Danske Bank
Savings products
First Trust
Savings products
Halifax
Savings products
HSBC
Savings products
HSBC rewards loyalty
HSBC launch Help to Buy ISA
KBC Group
Savings products
Nationwide
Savings products
Help to Buy ISA
Flexclusive Regular Saver
Permanent TSB
Savings products
Post Office
Savings products
Competitive strategy
Santander
Savings products
Competitive strategy
Ulster Bank
Savings products
THE CONSUMER – WHAT YOU NEED TO KNOW
Most Irish consumers have at least some savings
Standard savings accounts are the most popular savings product
Broadly positive expectations for savings over coming months
THE CONSUMER – VALUE OF SAVINGS
Only a minority of consumers have no savings whatsoever
Figure 26: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), NI and RoI, November 2015
Women more inclined than men to have no savings
Figure 27: Consumers who currently have ‘no savings or investments’, by gender, NI and RoI, November 2015
Consumers aged 55+ least likely to have no savings or investments
Figure 28: Consumers who currently have ‘no savings or investments’, by age, NI and RoI, November 2015
Figure 29: Consumers who currently have ‘no savings or investments’, by presence of children in the household, NI and RoI, November 2015
C2DEFs twice as likely as ABC1s to have no savings or investments
Figure 30: Consumers who currently have ‘no savings or investments’, by social class, NI and RoI, November 2015
THE CONSUMER – OWNERSHIP OF SAVINGS PRODUCTS
Straightforward savings account the preferred savings product
Figure 31: Ownership of selected savings and investment products, NI and RoI, November 2015
Figure 32: Ownership of selected savings and investment products, NI and RoI, November 2015
Standard savings accounts command universal appeal
Figure 33: Ownership of savings account (excluding Post Office accounts), by gender, age and social class, NI and RoI, November 2015
NI consumers playing it safe when purchasing ISAs
Figure 34: Ownership of cash ISAs and stock and shares ISAs, by gender, age and social class, NI, November 2015
No room for complacency when it comes to pensions
Figure 35: Ownership of personal pensions and company pensions, NI and RoI, November 2015
Huge gender gap in pension ownership among NI and RoI consumers
Figure 36: Ownership of personal pensions, by age, gender and social class, NI and RoI, November 2015
Figure 37: Ownership of company pensions, by age, gender and social class, NI and RoI, November 2015
Neither NI nor RoI consumers too keen on equity investments
Figure 38: Ownership of individual company shares, NI and RoI, October 2014 & November 2015
Men, ABC1s and consumers aged 55+ most inclined to own equity investments
Figure 39: Ownership of individual company shares, by age, gender and social class, NI and RoI, November 2015
THE CONSUMER – EXPECTATIONS FOR SAVINGS
Most expect savings to increase or remain constant in coming 6 months
Figure 40: Consumer expectations for savings and investments in the next six months, NI and RoI, November 2015
Younger consumers and ABC1s most optimistic about future
Figure 41: Consumers who expect their savings and/or investments to increase in the next six months, by age, gender and social class, NI and RoI, November 2015
Work status a major factor in expectations for the near future
Figure 42: Consumers who expect their savings and/or investments to increase in the next six months, by work status, NI and RoI, November 2015
No major concerns about savings being depleted in months ahead
Figure 43: Consumers who expect their savings and/or investments to stay the same over the next six months, by age, gender and social class, NI and RoI, November 2015
Figure 44: Consumers who expect their savings and/or investments to stay the same over the next six months, by work status, NI and RoI, November 2015
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Abbreviations
APPENDIX – THE CONSUMER
NI Toluna data
Figure 45: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, NI, November 2015
Figure 46: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, NI, November 2015 (continued)
Figure 47: Ownership of savings account (excluding Post Office accounts), by demographics, NI, November 2015
Figure 48: Ownership of Cash ISA, by demographics, NI, November 2015
Figure 49: Ownership of Stocks and Shares ISA, by demographics, NI, November 2015
Figure 50: Ownership of company pension, by demographics, NI, November 2015
Figure 51: Ownership of NS&I (National Savings and Investments) products (eg Premium Bonds, Index-linked Savings Certificates), by demographics, NI, November 2015
Figure 52: Ownership of a personal pension, by demographics, NI, November 2015
Figure 53: Ownership of individual company shares, by demographics, NI, November 2015
Figure 54: Ownership of notice account, by demographics, NI, November 2015
Figure 55: Ownership of with profits, unit-linked, money market, distribution or guaranteed investment bond, by demographics, NI, November 2015
Figure 56: Ownership of Post Office/An Post Saving Account, by demographics, NI, November 2015
Figure 57: Ownership of an investment trust, by demographics, NI, November 2015
Figure 58: Ownership of other savings or investments, by demographics, NI, November 2015
Figure 59: Consumer expectations for savings and investments in the next six months, by demographics, NI, November 2015
Figure 60: Ways that consumers have spent their money in the last three months, by demographics, NI, November 2015
Figure 61: Ways that consumers have spent their money in the last three months, by demographics, NI, November 2015 (continued)
Figure 62: Ways that consumers have spent their money in the last three months, by demographics, NI, November 2015 (continued)
Figure 63: Ways that consumers intend to spend their money in the next three months, by demographics, NI, November 2015
Figure 64: Ways that consumers intend to spend their money in the next three months, by demographics, NI, November 2015 (continued)
Figure 65: Ways that consumers intend to spend their money in the next three months, by demographics, NI, November 2015 (continued)
RoI Toluna data
Figure 66: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, RoI, November 2015
Figure 67: Amount that consumers currently have in their savings and investments (excluding pensions and second homes), by demographics, RoI, November 2015 (continued)
Figure 68: Ownership of savings account (excluding Post Office accounts), by demographics, RoI, November 2015
Figure 69: Ownership of company pension, by demographics, RoI, November 2015
Figure 70: Ownership of a personal pension, by demographics, RoI, November 2015
Figure 71: Ownership of individual company shares, by demographics, RoI, November 2015
Figure 72: Ownership of notice account, by demographics, RoI, November 2015
Figure 73: Ownership of with profits, unit-linked, money market, distribution or guaranteed investment bond, by demographics, RoI, November 2015
Figure 74: Ownership of Post Office/An Post Saving Account, by demographics, RoI, November 2015
Figure 75: Ownership of state savings products (Savings Bonds, Savings Certificates, Instalment Savings and Prize Bonds), by demographics, RoI, November 2015
Figure 76: Ownership of an investment trust, by demographics, RoI, November 2015
Figure 77: Ownership of Other savings or investments, by demographics, RoI, November 2015
Figure 78: Consumer expectations for savings and investments in the next six months, by demographics, RoI, November 2015
Figure 79: Ways that consumers have spent their money in the last three months, by demographics, RoI, November 2015
Figure 80: Ways that consumers have spent their money in the last three months, by demographics, RoI, November 2015 (continued)
Figure 81: Ways that consumers have spent their money in the last three months, by demographics, RoI, November 2015 (continued)
Figure 82: Ways that consumers intend to spend their money in the next three months, by demographics, RoI, November 2015
Figure 83: Ways that consumers intend to spend their money in the next three months, by demographics, RoI, November 2015 (continued)
Figure 84: Ways that consumers intend to spend their money in the next three months, by demographics, RoI, November 2015 (continued)

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