When this report was published, in March 2002, the UK was in recession, the unemployment rate was fluctuating, and the future of the US economy remained uncertain in the wake of the terrorist attacks of 11th September 2001.
Despite this, people continued to spend an increasing amount of their income on houses, durable white goods and leisure activities. In contrast, they were spending less on savings (there is a huge savings gap), and the performance of the life-insurance and pension markets remained lacklustre.
This has resulted in notable changes to the structure of the long-term-savings market, with many of the largest companies — and, indeed, the smaller players — merging and cutting costs.
The trigger for this activity has not been the entry to the market of foreign competition, or the entry of new players such as Virgin Money Personal Financial Service Ltd or Marks and Spencer PLC, but the UK Government. High on its agenda is the issue of helping low-income consumers to get out of the poverty trap.
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