Released on = April 16, 2007, 12:12 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = As at 30th November 2003, UK households and housing
associations owed £929.96bn - equivalent to just over £37,000 per household. The
amount outstanding soared by 13.3% in the year to 31st October 2003.

Press Release Body = Financial Services Marketing to ABs - Market Assessment

As at 30th November 2003, UK households and housing associations owed £929.96bn -
equivalent to just over £37,000 per household. The amount outstanding soared by
13.3% in the year to 31st October 2003. The credit market depends heavily on the
\'feel-good\' factor arising from property price inflation, so any reverse in the
property market would rein back credit. Key Note estimates the core mass affluent
market with consistently high incomes and stable or increasing wealth, over and
above owner-occupied property, at around 800,000 households.

The removal of customer-facing staff to cut costs jeopardises customer loyalty.
Automated decision-making depends on data that often contain mistakes. While
companies are relying on technology to replace staff, customers suffer from poor
service and do not feel valued. Consumers\' increasing remoteness from the
decision-makers in financial-services companies also detracts from loyalty and
trust.

Poor customer service from banks and insurers was a major issue emerging from the
consumer research conducted exclusively for this report. Only a small minority of
those interviewed felt that banks\' service standards had improved over the past 2
years and an even smaller percentage believed insurers\' service standards had risen.
The survey also suggested that individuals have conflicting expectations: living and
spending for today yet expecting financial security in the future.

The most heavily advertised brands among the financial categories popular with ABs
include Direct Line, National Westminster (NatWest), MasterCard, Capital One and
Halifax. More money goes on advertising credit cards than life and protection
insurances, individual savings accounts (ISAs), unit and other trusts and
investments combined. Debt management is a thriving sector attracting new entrants.

The proposed Pension Protection Fund (PPF) is unlikely to rescue the defined-benefit
pension on which the previous generation of managers and professionals depended for
a secure retirement. For the current generation, especially the middle earners with
teenage children, economic policies such as higher university tuition fees hit them
disproportionately hard. Widespread social acceptance of individualism suggests that
the gap between the most affluent households and the rest will continue to expand:
the wealthiest ABs will have increasingly less in common with managers and
professionals on low salaries; for example, many in the not-for-profit sector.

The A households, around 6% of the total, own approximately 59% of financial wealth.
The total shares of both A and B households could ease back slightly by 2007, if C2s
continue to benefit from a shortage of tradespeople and consequent rise in their
incomes, giving them the resources to save and invest. The losers will not be the
wealthiest As but the lower to mid-range managers and professionals, among whom
competition for jobs will intensify as the supply of graduates rises.

Independent financial advisers (IFAs) are expected to have a growing role in
financial advice to wealthier ABs. Managers and professionals on lower incomes, who
will often need impartial advice, may struggle to afford it.

Mergers and acquisitions are likely to be common in financial services over the next
5 years, leading to less choice for customers.

The 18 to 34 age group faces a tough financial future. Saddled with debts, facing
the expense of bringing up their own children and seeing their prospects of
inheritance fade as their grandparents and parents use up their financial resources
to fund retirement, this generation still refuses to plan for the future, preferring
to live for the day.
Key Note Market Assessments
Providing in-depth strategic analysis and including primary research, these premium
reports examine the scope, dynamics and shape of key UK and European markets, with a
particular focus on financial services, consumer and lifestyle sectors.


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