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What is the Financial Activity Bulletin ?

• Quarterly publication monitoring consumers expected saving, investment and debt activity in the next six months

• Since March 2003 also covers consumers’ main financial services providers

• Two questions are asked on the monthly Omnibus survey undertaken by Martin Hamblin GfK of 2,000 adults aged 16+ that also includes UK consumer confidence

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Financial activity question

• Consumers are asked about their financial activity intentions in the next six months across 17 categories including mortgages, pensions, cash deposits, ISAs, shares, unit trusts, personal loans, plastic cards, life insurance, debt repayment, property purchase

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Bulletin Contents

• The retail financial services environment• The mood of the consumer• The demand for savings, investment and

borrowing products in the next 6 months• The supply of savings, investment and

borrowing products in the next 6 months• Conclusions

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Savings / investment and debt activity June 2002-Sept 2004

Type of financial activity

June 2002- Sept 2004 (average %)

September 2004 (%)

Overall activity 79 81

Savings / investment

66 70

Borrowing 22 21

Debt repayment 32 34

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Interaction of consumers with financial services September 2004

Number of intended activities

0 1 2 or 3 4 or 5 6 or more

Proportion of adult population aged 16+ (%)

19 19 30 21 11

Millions of adults aged 16+

9.0 9.0 14.2 10.0 5.2

Consumer confidence

-15 -9 -6 -4 -2

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Main financial activities September 2004

3 9

3 03 2

3 1

2 8

3 3 3 3

2 82 6

1 9

3 7

3 4 3 4

3 02 8

0

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0

4 5

P lac e a depos it D e bt re paym e nt P ay in regular ly tope nsion

Pu t mone y in to an IS A P ay in regularly to lifecom pan y

% i

nte

nd

ing

to

un

de

rta

ke

ac

tiv

ity

S ep-0 3 J un-0 4 S ep-0 4

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Profile of financially inactive

• Under £14,499 household income (51%)• Primary/secondary education (71%)• Over aged 50+ (61%)• Just making ends meet (53%)

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Current financial position of UK households and selected intended activities (%)

Household type

All No activity Debt repayment

Life and pension

Mortgage

Saving a lot 6 2 5 8 9

Saving a little

45 24 47 53 41

Making ends meet

34 53 34 28 35

Running down savings

9 15 5 5 4

Falling into debt

6 4 10 5 10

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Main financial services providers and advisors

• Around 80% of the adult population have their main financial provider at one of the top ten bank / building society brands

• 28% of the population regard their main provider as also their main financial advisor

• 31% of the population do not have a main financial advisor

• Other main advisors are IFAs (19%) and friends & family (13%)

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Trust and confidence in financial services providers

7 6

1 5

8

1

5 8

2 5

1 3

4

5 0

2 9

1 6

5

6 6

1 9

1 2

3

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

All / most o f the tim e S o me of the tim e In frequ ently / no ne of th etim e

D on 't know / no ans w er

% o

f re

sp

on

de

nts

O p erate acc ounts e ffie ntly & c onv enie ntly Give good advic e

S e ll su itab le produc ts to m ee t m y ne ed s E nsure its staff are friendly & w e ll-trained