Latest research from unbiased.co.uk reveals that despite record low interest rates on cash savings, nearly two thirds of savers (61%) are not putting their money in anything other than cash and are staying away from investing on the stock markets1.
The professional adviser search website’s research reveals that of those who currently have their savings in cash, only two in five (39%) think they don’t have enough money to invest. Following a fortnight of market turbulence, nearly a third (31%) admitted that they feel investing is too risky, while one in five (20%) are worried about making the wrong choices. Despite the current low-interest environment and lack of inflation-busting savings accounts, 15% of cash-savers believe they can get better rates with a deposit account or cash ISA.
A fifth (21%) of 18-34 year olds say they are not investing their savings because they don’t know how to, compared to an average across all age groups of just 12%. But just over one in ten (12%) think the process of investing is too complicated.
What’s causing the confusion?
Looking more closely at the investment process, the group of not-yet investors feel the most complicated part of investing would be timing when they should buy and sell their investments. This is closely followed by knowing how to buy and sell stocks and shares, and knowing which investments would represent the best value for their money.
Top five most complicated aspects of investing according to would-be investors:
1. Knowing when to buy and sell investments (17%)
2. Knowing how to buy and sell stocks and shares (17%)
3. Knowing which investments represent best value (14%)
4. Knowing what products to invest in (13%)
5. Understanding the terminology around investing and what it means (12%)
The investment factor
Overall, nearly two thirds of cash savers (64%) say they would consider investing their savings. Nearly a third (31%) of would-be investors say they don’t know what they would invest in if they started, but for 19% their first investment product would be stocks and shares, including those held in stocks and shares ISAs
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If you were to start investing, which, if any, of the following types of investments you have heard of, would you be most likely to buy?
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Stocks & shares (including in a stocks and shares ISA) |
19% |
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Government bonds (e.g. gilts) |
9% |
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Investment bonds |
6% |
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Investment Trusts |
3% |
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Funds (OEICs or unit trusts) |
0% |
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Corporate bonds |
0% |
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Alternative Investments (e.g.foreign exchange, spreadbetting, contracts for difference (CFD) |
0% |
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ETFs (Exchange traded funds) |
0% |
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Other |
0% |
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Don't know |
31% |
Value of Advice
The 2012 Value of Advice report2 from unbiased.co.uk shows that of those who use a professional adviser to invest, 43% take a long term view of their investments and don’t focus on short term market movement. Nearly one in five (18%) who didn’t use a professional adviser say they have stopped investing due to uncertainty in the markets.
Karen Barrett, Chief Executive of unbiased.co.uk, comments: “Our research shows there is a clear appetite from cash savers to invest their money but key factors such as knowing how and when to buy and sell investments are putting people off. The potential risk factor also seems to be deterring savers but in a balanced portfolio of investments, adding an element of risk can provide opportunities for returns. Those who want to take the next step but are unsure where to start should speak to a professional financial adviser who specialises in investing. They can offer their expertise on first time investing, help you understand what risk is appropriate for your current position and give you guidance on how often and when to invest.
“With continuing inflation and low interest rates, cash savings and deposits struggle to keep up, so cash savers should consider all their options to ensure their savings are working hard for them, but it’s crucial to seek advice to help you make the right decision for your financial situation. To find a whole of market financial adviser specialising in investments visit www.unbiased.co.uk.
Don't bury your loot in the garden - We may scoff at the thought of hiding cash in our mattresses or burying trinkets in the garden, but when it comes to savings we’re not too far off doing the same ourselves. Read the latest blog from unbiased.co.uk
ENDS
Notes to editors:
1 Research based on Opinium Research results, 2004 online interviews, from 18-20 June 2013 (nationally representative) of which 880 were cash savers.
2 Research based on Opinium Research results, 1044 online interviews (had taken advice from an IFA) and 1,219 online interviews (had not taken advice from an IFA) from 30 May – 7 June 2012
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About unbiased.co.uk, the professional advice website
Unbiased.co.uk is the UK's most comprehensive free professional adviser search website, focused on empowering users with the resources they need to make better informed financial and legal decisions. We not only help consumers and businesses find the best adviser for their needs from over 20,000 IFAs, financial advisers, mortgage advisers, solicitors and accountants listed on our search but we also help them research the market by providing relevant information and tools. At unbiased.co.uk we like to be transparent about what we do and aim to provide the easiest way for consumers to find and compare advisers meeting their requirements.
The unbiased.co.uk website launched in 1998 and rapidly became the UK’s leading online destination for consumers and businesses looking to find an adviser. Now attracting over one million visitors a year, unbiased.co.uk is the default adviser directory for consumer websites recommending their audience to ‘find an adviser’.
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Category: Savings & Investments Tagged: Interest rates, mortgages
