The aim of this report is to study how UK consumers behave when they make financial investment and saving decisions.
The report considers what types of saving and investment products consumers hold, how they purchase and invest and what factors influence their purchases. It also considers how consumer investment behaviour has been influenced by developments like COVID-19 and potential investment frauds. For this report, the publisher commissioned Made in Surveys Group (MIS) to conduct a survey among its online panel, drawing on a nationally representative sample of 2,076 UK adults aged 18+.
Key Findings
45% of consumers who own savings and investment products have been negatively impacted by the COVID-19 pandemic, with the value of their money held in savings and investment products declining. Not surprisingly, given the impact of the crisis on stock market values worldwide, individuals who have money held in investment products like stocks and shares (labelled Investors) have felt its negative effects more than Savers (who tend to only own cash-based savings products), with 59% of Investors seeing a negative effect on their wealth.
For the same reasons, the negative impact of the virus tends to rise the greater the wealth of the saver and investor. While 31% of Savers and Investors with less than 1,000 in wealth were negatively impacted, this rises to 76% for those with 500,000 or more in wealth.
COVID-19 has led to a sharp downgrading in sentiment regarding the growth of wealth over the past year. Pre-crisis, around four-in-ten Savers and Investors were happy with the growth of their wealth, compared with less than one-third today. Despite this, two-thirds of Savers and Investors have decided to take no action because of COVID-19 and effectively ride out the storm rather than change how they Save and Invest.
Despite wealthier Savers and Investors being the most adversely impacted by COVID-19, they still enjoyed higher returns over the past year compared with less affluent Savers and Investors. Over the past year, the typical saver and investor earned a return of around 3.6%, rising to 9.8% for those with 500,000 or more in wealth.
Examples of other findings from this report are:
Almost a third of savers are under-advised (i.e. they need professional advice and guidance but do not get it)
While only 15% of Savers and Investors used professional financial advisors in the past year, advisors are given a higher rating by their users compared with users of other sources of information and guidance
Only 15% of Savers and Investors seem to be aware of how to protect themselves against scams and unsuitable purchases
Over one-quarter of savers and investors have been approached in ways the Financial Conduct Authority has highlighted are often used by scammers and fraudsters
Six-in-ten consumers are Savers, while four-in-ten are Investors
62% of Savers and Investors invested or saved some money in the previous year
The typical consumer has around 83,000 saved or invested (mean average)
The prime motive for saving and investing (58% of Savers and Investors) is to generate money now to cover for an immediate rainy day or unexpected event like unemployment
Less than half of savers and investors lay out plans for their financial future
Key Topics Covered
EXECUTIVE SUMMARY
Consumers divide into Savers and Investors
Wealth and social grade largely determine the split
Most consumers save or invest for defensive reasons
Less than half of consumers make financial plans
Investors can invest because they are more willing to take risks
Consumers want income and capital returns, but judge by the income return
Investors minimise risk by owning a broad portfolio of products
Affluent Investors are the most active
Consumers prefer to accumulate monthly and would like to do it online
29% of Savers and Investors are Under-Advised
Professional financial advisors, less used but of most value
Consumers are susceptible to scams and mis-selling
With major knowledge gaps
Over one-quarter exposed to suspicious action
Over four-in-ten negatively impacted by COVID-19
INTRODUCTION
Definitions
WHO ARE SAVERS AND INVESTORS?
Around four-in-ten consumers own investment products
Virtually all consumers hold cash assets
Age, gender and income the great discriminators
The saving and investing spectrum
The typical consumer has around 83,000 saved or invested
Wealth inequalities can be stark
SAVING AND INVESTING PREFERENCES AND GOALS
Many consumers lack financial security
Motives, time scales and planning
Investors and the Financially Tight More Likely to Plan Ahead
The Strategists vs. the Impromptu
Having a motive for saving/investing is one thing, reaching the goal is another
Investors and the Financially Tight are more accepting of risk
Income vs capital gain preferences
Savers prefer income and Investors capital growth
Most consumers monitor their finances at least once a quarter
WHERE MONEY IS SAVED AND INVESTED
Savings accounts are where consumers hold most of their money
Investors have the most diversified portfolios
Niche products feature mainly in diversified portfolios
If more risk is accepted, then significant sums are invested in risker assets
Important assets are diversified at an exponential rate
Intra-portfolio diversification is also used to minimise risk
Most fund owners seem to understand what they are being charged
Cash will remain king over the coming year
Investment over the coming year skewed towards affluent Investors
ESG products are niche at the moment but they have potential for growth
HOW MONEY IS SAVED AND INVESTED
Over six-in-ten saved or invested last year
When saving or investing consumers prefer to do so on a monthly basis
Investors show a greater preference for lump sum saving and investing
If saving and investing themselves, consumers prefer to do it online
Affluent men under the age of 45 are key users of fund platforms
THE DRIVERS OF PRODUCT CHOICE
Income return the main driver
The desired return shapes the factors considered
GETTING ADVICE AND SOURCING INFORMATION
Only around half of Savers and Investors feel they can manage alone
Only one-quarter can self-manage, but over seven-in-ten have to
The Under Advised
Less wealthy Investors the most likely to be Under-advised
Financial management matches the assets owned
The Internet is the preferred information resource for Savers and Investors
Under Advised are less likely to consult information sources
Professional resources, less used but of most value
It’s easier for wealthier individuals to find what they want
SUSCEPTIBILITY TO SCAMS AND MIS-SELLING
Almost one-quarter of consumers invest in highly risky products
Ownership is strongly associated with wealth
Over half of those with wealth of 250,000 or more own these assets
Significant gaps in knowledge exposes consumers to scams and mis-selling
Only 15% of Savers and Investors have strong protection
Less affluent Savers and Investors protected by default, not design
One-quarter of Savers and Investors exposed to suspicious activity
THE IMPACT OF COVID-19 ON SAVINGS AND INVESTING
Half of Savers and Investors impacted by COVID-19
Most Savers and Investors have decided to sit still and ride it out
COVID-19 leads to a significant downgrading of sentiment
Satisfaction comes from earning a return of 3% or more
Despite economic uncertainty, Savers and Investors expect stable returns
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
