Sector Insight: deposit and savings accounts

House of money
House of money

Saving may be difficult, but deposit accounts are a key sector for bank brands

Five Key Trends

Popularity. High penetration with about 67% of adults having a taxable savings account and 45% a cash ISA. Ownership of savings products increases with age except regular savings accounts which are more popular with 16 -34 year olds.

Recession. Earnings growth isn't keeping up with the cost of living making saving more difficult. The savings ratio (savings as percentage of available household income) has dropped from its 2009 peak although it's still above pre-recession levels.

Interest rates. Low interest rates are detrimental to saving and the curse of the limited term bonus rate means people are often confused.

Dormant accounts. It's estimated that £500m sits in 500,000 dormant bank and building society accounts in the UK.

Online. Traditionally savings accounts were distributed via branches but the internet is now the dominant channel for account access. Two thirds of easy-access account holders prefer to access online.

Value. Total retail savings balances grew by 3% in 2011 to reach £1.15 trillion. The variable interest easy access account is the most common.

Source: Mintel

Ownership of cash savings products Feb 2012 (%)

Source: GMI/Mintel  Base 2064 internet users aged 16+

Top six savings-account providers by estimated share of 'main account' customers, Feb 2012 (%)

Source: Mintel based on GMI consumer research

The Industry's Main Players

Catherine Kehoe, brands and marketing director, Lloyds Banking Group

Kehoe joined Lloyds TSB in 2007 from Yell where she had held the marketing director role covering Yellow Pages, and 118247. Prior to that she spent six years at BT in a variety of marketing roles. At Lloyds she is responsible for brand strategy across Lloyds TSB, Halifax, Bank of Scotland, Cheltenham & Gloucester and Birmingham Midshires brands.


Keith Moor, director brand and communications, Santander UK 

Moor began his career in direct insurance in the early 90s and joined Abbey in 1995, ultimately leading marketing in 2008. He was responsible for bringing the Abbey, Bradford & Bingley and Alliance & Leicester brand into the single Santander brand as well as handling its UK sponsorship deals such as in F1 and golf.


Les Matheson, managing director of products and marketing, RBS Retail (no pix)

In this role since 2009, Matheson has a wealth of experience in the finance sector. At RBS he is responsible for product marketing for the NatWest and RBS brands among other things. He has also worked overseas in Asia Pacific and Australia for St George Bank and Citibank.


Alex Bannister, head of customer marketing, Nationwide (you have a photo of him)

Bannister took over this role in 2009 and is responsible for retail customer strategy, CRM, targeted customer communications and database marketing. He has also held a number of other roles at Nationwide including head of banking and credit card and chief economist.

Winners and Losers in the deposit and savings accounts sector

Halifax. Overall market leader based on share of main customer account. It launched an innovative savings scheme with a monthly prize draw available for customers with at least £5000 deposited. It was also the highest spending advertiser in 2011.

HSBC. Grew its retail savings balance by the greatest margin in 2011, up by 6.1%.

Santander. Mixed fortunes for the brand: it experienced a drop in retail customer deposits in 2011 (so was overtaken by Nationwide) and has been dogged with poor customer service reports. But showed innovation when it launched an account paying interest up front and continues to offer some of the best deals.

 Northern Rock. High profile loser in the 2007 credit crisis when a run on the bank forced the government to bail it out. Virgin Money acquired it in January 2012 and has set about offering 'good value' to savers with competitively rated easy access saver and ISA accounts. The Northern Rock name is being phased out.

Source: Mintel


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