| MP65094 |
| MAPS : Savings and Investments: April 2004 |
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This report covers: savings and investments, National Savings, Gilts, TESSAs, ISAs, PEPs, Unit Trusts, Investment Trusts, Stocks & Shares, Life Insurance & Pension Prosucts, Fidelity Investments,
companies covered include: Foreign & Colonial, HBOS, Legal & General, Nationwide Building Society, Royal Bank of Scotland,
EXECUTIVE SUMMARY
| Executive Summary |
| Savings and investments form a fascinating part of the financial-services industry. The dynamics of the sector are volatile, with conflicting pressures and wide swings in the value of savings. Politically, savings are very important as an indicator of individual prosperity or poverty. |
| In this report, Key Note examines current thinking about the savings gap: it is feared that a high proportion of the population is destined to be poverty-stricken in old age, with a state pension provision that is likely to be inadequate for their needs. The report looks at the current state of the economy and the changes in savings ratios, interest rates and household wealth. Demographic pressures will place a greater burden on the shrinking working population, if the elderly or early retired have to be supported from investment returns. |
| The affluent segment of the market is investing large and increasing sums in bank deposit accounts and building society savings accounts. Banks are competing for those deposits by reducing the costs and inconvenience of access to funds. The increase in depositors' wealth by far outweighs the growth in consumer debt, so, in the aggregate, there is no debt crisis. |
| Key Note also examines the developments in government-supported investments designed to encourage saving, although in practice these have been less successful than had been hoped. |
| The stock market has proved to be the graveyard for the hopes of many for their tax-free or guaranteed investments, as well as for those who relied on more apparently risky investments. Key Note looks at the characteristics of unit and investment trusts and also at the investments of insurance companies and pension funds. |
TABLE OF CONTENTS
| Executive Summary |
| 1. Introduction |
| BACKGROUND |
| DEFINITION |
| 2. Strategic Overview |
| Market Dynamics and Segmentation |
| Market Introduction |
| Market Sectors |
| Current Status of the Market |
| Table 1: Percentage of Adults in Great Britain Holding any Savings Account, 1998-2002 |
| Total Industry Value and Growth |
| Table 2: Net Wealth of the Household Sector at Constant 2001 Prices (£bn), 1987-2002 |
| Table 3: Financial Assets of the UK Personal Sector (£bn and index 1999=100), 1999-2004 |
| Largest Sector and Market Share |
| Sector with Highest Growth Rate |
| Sector with Lowest Growth Rate |
| DISTRIBUTION |
| COMPETITIVE STRUCTURE |
| ADVERTISINg |
| Table 4: Main Media Advertising Expenditure on Selected Savings and Investment Products (£000), Years Ending December 2002 and 2003 |
| THE CONSUMER |
| Demographics |
| Table 5: UK Population Projections (000), 1996-2021 |
| The Economy |
| Table 6: The UK Economy (£m, index 2000=100 and %), 1999-2004 |
| Consumer Trends |
| MARKET FORECASTS |
| The Sandler Report |
| 3. Bank Savings |
| INTRODUCTION |
| MARKET SIZE |
| MARKET SHARE |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Table 7: Main Media Advertising Expenditure on Savings and Investment Products by Selected Banks (£000), Year Ending December 2003 |
| DISTRIBUTION |
| 4. Building Societies |
| INTRODUCTION |
| MARKET SIZE |
| Table 8: Number of Building Societies Authorised, Shareholders and Depositors (number, 000 and £m), 1999-2003 |
| MARKET SHARE |
| Table 9: Top Ten UK Building Societies by Group Assets (£m), December 1999 and 2002 |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Table 10: Main Media Advertising Expenditure on General Savings Accounts by Selected Building Societies (£000), Year Ending December 2003 |
| DISTRIBUTION |
| Table 11: Number of UK Building Society Branches, 1998-2003 |
| 5. National Savings and Gilts |
| INTRODUCTION |
| MARKET SIZE |
| National Savings |
| Table 12: National Savings Holdings (£m and index 1998=100), 1998-2003 |
| Gilts |
| Table 13: Gilts† — Amounts Outstanding (£m and index 1998=100), 1998-2003 |
| MARKET SHARE |
| Table 14: National Savings — Amounts Outstanding by Product (£bn), 1998-2003 |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Table 15: Main Media Advertising Expenditure by National Savings & Investments (£000), Year Ending December 2003 |
| DISTRIBUTION |
| 6. TESSAs, PEPs and ISAs |
| INTRODUCTION |
| TESSAs |
| PEPs |
| ISAs |
| Taxation |
| MARKET SIZE |
| Table 16: Market Value of ISA Funds (£m), 5th April 1999-2003 |
| Table 17: Value of ISA Funds Purchased (£m and index 1999=100), 5th July 1999 and 5th April 2000-2003 |
| Table 18: Number of Active ISA Accounts and Average Subscriptions (000 and £), 5th July 1999 and 5th April 2000-2003 |
| MARKET SHARE |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Table 19: Main Media Advertising Expenditure on ISAs (£000), Year Ending December 2003 |
| DISTRIBUTION |
| 7. Unit Trusts and Investment Trusts |
| INTRODUCTION |
| MARKET SIZE |
| Unit Trusts |
| Table 20: Total Unit-Trust Funds Under Management (£m), December 1998-2003 |
| Investment Trusts |
| Table 21: Total Assets of Investment Trusts (£m and index 1995=100), 1995-2003 |
| MARKET SHARE |
| Unit Trusts |
| Table 22: The Top Ten Unit Trusts by Value (£m), December 2003 |
| Investment Trusts |
| Table 23: The Top Ten Investment Trust Funds (£m), January 2004 |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Unit Trusts |
| Table 24: Main Media Advertising Expenditure on Unit Trusts (£000), Year Ending December 2003 |
| Investment Trusts |
| Table 25: Main Media Advertising Expenditure on Investment Trusts (£000), Year Ending December 2003 |
| DISTRIBUTION |
| 8. Stocks and Shares |
| INTRODUCTION |
| INDUSTRY STRUCTURE AND CONCENTRATION |
| MARKET SIZE |
| Table 26: Composition of the Net Wealth of the Household Sector — Securities and Shares at Constant 2001 Prices (£bn and index 1987=100), 1987-2002 |
| MARKET SHARE |
| Table 27: Share Ownership (% and index 1997=100), 1998-2002 |
| ADVERTISING |
| Table 28: Main Media Advertising Expenditure by Stockbrokers and Share-Dealing Services (£000), Year Ending December 2003 |
| CONSUMER TRENDS |
| DISTRIBUTION |
| SAVE AS YOU EARN |
| 9. Life Insurance and Pensions Products |
| INTRODUCTION |
| MARKET SIZE |
| Table 29: Household Ownership of Financial Assets at Constant 2001 Prices (£bn), 1987-2002 |
| MARKET SHARE |
| Table 30: Beneficial Share Ownership (£bn and index 1997=100), 1997-2002 |
| CONSUMER TRENDS |
| MARKETING ACTIVITY |
| ADVERTISING |
| Pensions |
| Table 31: Main Media Advertising Expenditure on Pensions (£000), Year Ending December 2003 |
| Savings Plans |
| 10. An International Perspective |
| SAVINGS RATIOS |
| Table 32: Household Saving Rates in Selected OECD Countries (% of disposable household income), 1999-2004 |
| WEALTH |
| Table 33: Household Wealth and Indebtedness (% of nominal disposable income), 1999-2004 |
| CANADA |
| FRANCE |
| GERMANY |
| ITALY |
| JAPAN |
| SPAIN |
| THE US |
| 11. PEST Analysis |
| POLITICAL FACTORS |
| ECONOMIC FACTORS |
| SOCIAL FACTORS |
| TECHNOLOGICAL FACTORS |
| 12. Consumer Dynamics |
| OVERVIEW |
| Savings and Investment Products |
| Table 34: Ownership of or Contribution to Savings and Investment Products (% of respondents), 2003 |
| Attitudes Towards Savings and Investment Products |
| Table 35: Attitudes Towards Savings and Investments (% of respondents), 2003 |
| OWNERSHIP OF SAVINGS AND INVESTMENTS |
| Life Insurance |
| A Personal Pension |
| Table 36: Ownership of or Contribution to Life Insurance and Personal Pensions (% of respondents), 2003 |
| A Building Society Savings Account with 3 Months' Notice or More |
| A Bank Deposit Account with 3 Months' Notice or More |
| Table 37: Ownership of or Contribution to Long-Term Building Society and Bank Savings Accounts (% of respondents), 2003 |
| Stocks and Shares Directly |
| National Savings Products |
| Table 38: Ownership of or Contribution to Stocks and Shares, or National Savings Products (% of respondents), 2003 |
| A Cash ISA |
| An Insurance ISA |
| Table 39: Ownership of or Contribution to Cash ISAs and Insurance ISAs (% of respondents), 2003 |
| An Investment ISA |
| Unit or Investment Trusts Directly |
| Table 40: Ownership of or Contribution to Investment ISAs, or Unit or Investment Trusts (% of respondents), 2003 |
| A Building Society Savings Account with Less Than 3 Months' Notice |
| A Bank Deposit Account with Less Than 3 Months' Notice |
| Table 41: Ownership of or Contribution to Short-Term Building Society Savings Accounts or Bank Deposit Accounts (% of respondents), 2003 |
| Do Not Know |
| None of These |
| ATTITUDES TOWARDS SAVINGS AND INVESTMENTS |
| "I Think the Proposed Low-Fee Savings Products are a Good Idea" |
| "I Think That Children Should Learn to Save for Their Long-Term Future" |
| Table 42: Attitudes Towards Low-Fee Savings Products and Teaching Children to Save (% of respondents), 2003 |
| "I Want to Discuss my Savings and Investments Face to Face" |
| "I am Happy to Manage my Savings and Investments by Telephone" |
| Table 43: Attitudes Towards Discussing Savings and Investments Face to Face and Managing Savings and Investments by Telephone (% of respondents), 2003 |
| "I am Happy to Manage my Savings and Investments Online" |
| Table 44: Attitudes Towards Managing Savings and Investments Online (% of respondents), 2003 |
| "Do Not Know" |
| "None of These" |
| 13. Company Profiles |
| INTRODUCTION |
| FIDELITY INVESTMENTS |
| Corporate Strategy |
| Strengths and Weaknesses |
| New Product Development |
| Brand Development |
| Innovations |
| Distribution |
| Future Company Developments |
| FOREIGN & COLONIAL |
| Corporate Strategy |
| Strengths and Weaknesses |
| Distribution |
| Future Company Developments |
| HBOS PLC |
| Corporate Strategy |
| Strengths and Weaknesses |
| New Product Development |
| Brand Development |
| Innovations |
| Advertising |
| Distribution |
| Profitability |
| Future Company Developments |
| LEGAL & GENERAL GROUP PLC |
| Corporate Strategy |
| Strengths and Weaknesses |
| Distribution |
| Profitability |
| Future Company Developments |
| NATIONWIDE BUILDING SOCIETY |
| Corporate Strategy |
| Strengths and Weaknesses |
| New Product Development |
| Brand Development |
| Innovations |
| Advertising |
| Distribution |
| THE ROYAL BANK OF SCOTLAND GROUP PLC |
| Corporate Strategy |
| Strengths and Weaknesses |
| New Product Development |
| Brand Development |
| Innovations |
| Advertising |
| Distribution |
| Profitability |
| Future Company Developments |
| 14. The Future |
| THE ECONOMY 2004 TO 2009 |
| Table 45: The UK Economy at Constant 2000 Prices (£m, index 2000=100 and %), 2004-2009 |
| Interest Rates, Asset Prices and the Financial Balance |
| Table 46: Interest Rates, Asset Prices and the Financial Balance (%, index 2000=100 and £m), 2004-2009 |
| MARKET FORECASTS 2004 TO 2009 |
| Table 47: UK Personal Sector Financial Assets (£bn and index 2004=100), 2004-2009 |
| Table 48: UK Government Securities by Value and Volume (£m, index 2004=100 and number), 2004-2009 |
| Table 49: Financial Assets of Households (£bn and index 2004=100), 2004-2009 |
| CONSUMER ISSUES |
| SUPPLIER ISSUES |
| Table 50: Savings and Investment Forecasts (£m), 2004-2009 |
| BARRIERS TO ENTRY |
| MARKET DYNAMICS |
| Political Factors |
| Economic Factors |
| Social Factors |
| Technological Factors |
| 15. Further Sources |
| Associations |
| Publications |
| General Sources |
| Government Publications |
| Other Sources |
| Bonnier Information Sources |
Text © 2004 Key Note
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Last updated by Amanda Porteous 2004
