Savings and Investments - Ireland

INTRODUCTION AND ABBREVIATIONS

Definitions

Figure 1: Illustration of level of risk associated with investments

Geographical, national and regional definitions

Conversion factors

BMRB Target Group Index sample sizes

ABBREVIATIONS

EXECUTIVE SUMMARY

Economic stability conducive to investment

Socio-economic groups AB and C1 growing in size

Interest rates remain constant

Investment returns varied

Market value reaches €1573 million

Term accounts take largest market share

Large financial institutions dominate supply structure

Distribution network improving

Instant access accounts most popular among savers

Future

MARKET DRIVERS

Economic climate

Population breakdown

NI

Figure 2: Population distribution, by age, NI, 1998-2008

RoI

Figure 3: Population distribution, by age, RoI, 1998-2008

Prosperity reflected in heavy concentration of ABC1s

Figure 4: Socio-economic classification, NI, 2001-05

Figure 5: Socio-economic classification, RoI, 2001-05

Interest rates

Figure 6: Interest rates, NI and RoI, 2000-05

Key economic indicators

Figure 7: Key economic indicators, NI and RoI, 2002-05

Employment

Figure 8: Rate of unemployment, NI and RoI, 2000-05

SSIAs proving popular

Strong stockmarket performance entices trade

Current stockmarket performance

Figure 9: Stockmarket performance, FTSE, Dow Jones and Nikkei, 1995-2005

MARKET SIZE AND TRENDS

A THIRD OF POPULATION OWN SAVINGS ACCOUNTS

Figure 10: Proportion of population with savings accounts, NI and RoI, 2000-05

Savings account ownership in RoI remains stable

Savings market worth a combined total of €1573 million

Figure 11: Value of savings market, RoI, NI and all Ireland, 2000-05

Stock ownership reflects performance

Figure 12: Proportion of population with investments in stocks and shares, NI and RoI, 2000-05

MARKET SEGMENTATION

Figure 13: Segmentation of the savings account market, by revenue invested, RoI, 2000-05

TERM ACCOUNTS MOST POPULAR IN ROI

Figure 14: Segmentation of the savings market, by revenue generated, RoI, 2000-05

NOTICE ACCOUNTS DECLINING IN POPULARITY

Figure 15: Segmentation of the savings account market, by revenue invested, NI, 2000-05

Figure 16: Segmentation of the savings market, by revenue generated, NI, 2000-05

SUPPLY STRUCTURE

Abbey

Figure 17: Abbey’s range of saving and investment products, 2006

AIB Group

Figure 18: AIB’s subsidiaries, 2006

Figure 19: AIB’s range of saving and investment products, 2006

First Trust Bank (AIB)

AIG Life

Alliance & Leicester

Figure 20: Alliance & Leicester’s range of saving and investment products, 2006

Bank of Ireland

Figure 21: Bank of Ireland’s range of savings and investment products, 2006

BCP Asset Management

Figure 22: BCP’s range of saving and investment products, 2006

CREDIT UNIONS

Eagle Star

HBOS (Halifax Bank of Scotland)

Figure 23: Halifax’s range of saving and investment products, 2006

Ulster Bank

First Active (Ulster Bank)

Figure 24: First Active’s range of saving and investment products, 2006

IIB

Irish Life & Permanent plc

Irish Life

Figure 25: Irish Life’s range of saving and investment products, 2006

Permanent TSB

Irish Nationwide

Nationwide

Figure 26: Nationwide’s range of saving and investment products, 2006

Northern Bank

Northern Rock

QUINN-life

SUPERMARKET FINANCE

Tesco

Figure 27: Tesco’s range of saving and investment products, 2006

ASDA

Sainsbury’s

Marks & Spencer

DISTRIBUTION

BANKS

Figure 28: Number of branches, NI and RoI, 2006

BUILDING SOCIETIES

CREDIT UNIONS

POST OFFICE

FINANCIAL ADVISERS

INTERNET AND TELEPHONE BANKING

ATMS

THE CONSUMER

SAVINGS ACCOUNTS

DEPOSIT SAVINGS ACCOUNTS MORE COMMON IN ROI

An Post benefiting from the AIB link-up?

Figure 29: Penetration of savings and investment products, RoI and NI, 2003 and 2005

Individual instant access accounts owned by one in five NI customers

Ownership of stocks and shares higher in NI

Affluence tied closely to savings accounts ownership

Figure 30: Penetration of deposit savings accounts, by gender, age and socio-economic status, RoI and NI, 2003 and 2005 25-34-year-olds in RoI and NI saving for a home deposit

Declining savings account ownership among lower socio-economic groups

Young parents and commitment-free couples most likely to be savers in RoI

Figure 31: Penetration of deposit savings accounts, by employment status, marital status and lifestage, RoI and NI, 2003 and 2005

With more disposable income, should providers do more to target Empty Nesters?

ABC1 consumers are key group for savings products

Figure 32: Penetration of An Post special savings accounts, instant access deposit accounts, notice/term deposit savings accounts and SSIAs, by gender, age and socio-economic status, RoI, 2005

Consumers without commitments are a key demographic for individual instant access accounts

Figure 33: Penetration of An Post special savings accounts, instant access deposit accounts, notice/term deposit savings accounts and SSIAs, by employment status, marital status and lifestage, RoI, 2005

Workers likely to invest

Couples without children and those with young children have jumped on the SSIA bandwagon

NI TRENDS SIMILAR TO ROI

Figure 34: Penetration of instant access deposit accounts, notice/term deposit savings accounts and ISAs, by gender, age and socio-economic status, NI, 2005

Older age groups take long-term view on savings

ISA ownership prevalent among affluent

Couples with primary school children are not ready for a rainy day

Figure 35: Penetration of instant access deposit accounts, notice/term deposit savings accounts and ISAs, by employment status, marital status and lifestage, NI, 2005

ISA ownership prevalent among elderly

Joint accounts popular among married couples

STOCKS AND SHARES

AB consumers: A key consumer group for share ownership

NI men more comfortable with playing the stock market than women

Figure 36: Penetration of stocks and shares, by gender, age and socio-economic status, RoI and NI, 2 and 2005

Overall ownership of stocks and shares hides trends among the demographic groups in RoI

ABC1s more inclined to own stocks and shares

Figure 37: Penetration of stocks and shares, by employment status, marital status and lifestage, RoI and NI, 2003 and 2005

Unemployment discourages investment

Couples seeking nest egg

Financial activity

Figure 38: Financial activity, RoI and NI, 2003 and 2005

FINANCIAL ATTITUDES

Individual instant access savers inclined to use credit cards at their expense

Figure 39: Agreement with attitudes towards spending habits statements, by financial products owned, RoI, 2005

Joint instant access savers delegate financial responsibility

Stock ownership reflects financial prudence

Stock ownership too risky for instant access savers in RoI

Figure 40: Agreement with attitudes towards personal finance statements, by financial products owned, RoI, 2005

Poor money management prevalent among joint instant access

Stock ownership an option for joint notice/term savers

Stocks and shares holders confident in their financial expertise

Financial indifference pervades instant access account ownership

Figure 41: Agreement with attitudes towards spending habits statements, by financial products owned, NI, 2005

Individual notice/term account holders financially independent

ISA holders seek financial advice

Instant access account holders lack financial expertise

Figure 42: Agreement with attitudes towards spending personal finance statements, by financial products owned, NI, 2005

Joint instant access account holders avoid financial help

Individual account holders wary of stock market

THE FUTURE

SOCIETY OF SAVERS GONE

EUROPE A BIG FACTOR

TECHNOLOGICAL ADVANCES CONTINUE TO INFLUENCE INDUSTRY

COMPETITION DEFINES DEVELOPMENTS

FORECAST

Figure 43: Forecast of savings market value, NI and RoI, 2005-09

APPENDIX: RESEARCH METHODOLOGY

Total

100

100