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Rising confidence to bring boost for life and pensions

An increase in activity for financial services providers is forecast over the next six months, according to the latest quarterly Financial Activity Bulletin.

The bulletin, produced by Martin Hamblin GfK and John Gilbert Associates, links consumer confidence with their expected savings, investment and debt activities for the next six months.

It shows an expected 3 per cent rise in savings and investment activity to 69 per cent from 66 per cent in December and a 1 per cent increase in demand for mortgages/rem-ortgages up to 12 per cent from 11 per cent in December despite the fall in consumer confidence in the last quarter.

The bulletin suggests that life and pension providers should see strong new business flows but there is still no sign of a more positive attitude towards equities and equity-based collective investment.

The survey also reveals which firms consumers regard as their main financial services providers, with LloydsTSB the overall market leader. HSBC customers are the most confident and Halifax customers the most active.

It also found that the top 10 banks and building societies dominate distribution, providing 78 per of products for the market.

John Gilbert Associates principal John Gilbert says: “It is a fairly confused environment. There is a likelihood that another cut in interest rates could reduce consumer confidence further among the growing number of older consumers who need higher interest income. Younger homeowners will, on the other hand, continue to benefit from lower mortgage rates and spending power released from their property.

“Aggressive marketing to this group may need to be curtailed as the demand for regulation of mortgage lending may grow.”

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