Martin Lewis compares paying mortgage over investing in savings
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But what exactly are investors choosing? Schroders Global Investor Study for 2021 revealed what UK investors are focusing on and their priorities in a post-pandemic market.
This study looked at over 23,000 people in 32 global locations and found that the biggest focus for investors at the moment is saving and financial wellbeing.
This is unsurprising as the turbulence of the pandemic has likely planted a deep set fear for more people when it comes to job security and financial health.
However, this impact is far bigger than it was first thought to be; over 76 percent of people in general have spent more time and effort to look at their financial state and reorganise their finances.
This number increases to 80 percent when looking at expert investors.
Majority of investors are now focusing more on how their money is used than before the pandemic (Image: GETTY)
In comparison, in 2019 only 30 percent checked their investment values once a week.
Some people found themselves pleasantly surprised during lockdown as 39 percent noted that they had saved more than they had planned to.
This was driven by the inability to spend money on non-essentials such as travel and bulk impulse purchases.
Others weren’t as lucky, and 40 percent of investors said they weren’t able to save as much as they would have liked because of reduced income.
A further 36 percent noted that their savings plans were interrupted due to furlough or job losses, and both of these groups plan to save as much as possible.
The desire to save more money is strongest amongst the 18-37 age group.
Alongside this, 58 percent of British investors are planning or would like to save more once restrictions have been lifted and they are financially able to do so.
An equal 58 percent of non-retired people are planning or would like to save more specifically for retirement as a result of the pandemic.
The new normal of investing is likely going to be highly focused on research (Image: GETTY)
This is evident that being personally affected by the turbulent economy is not necessarily the driving factor behind this changing mindset.
As most of those looking to save are relatively young and would like to save for retirement, it’s clear that watching others suffer or struggle during the pandemic has been enough to put fear in the hearts of investors.
As a result of this ‘savings push’ 54 percent of investors have put their money towards savings, whilst 52 percent have invested in low-risk assets.
Still, an astonishing 48 percent have invested in more high-risk assets since the lockdown roadmap was implanted.
This indicates a strong return of investor optimism, which should be good market indicators but with volatility being at an all time high, it’s no longer possible to judge this correctly.
Regardless, this confidence shows resilience of UK investors as this optimism is not shared by investors Sweden, Japan or Hong Kong.
Europe overall has a return expectation of around 9.7 percent, with UK investors looking toward 10.8 percent.
Alternatively, America seems to be the most optimistic group of investors expecting annual total returns of 12.5 percent over the next five years.
Stuart Podmore, behaviour investment insights specialist at Schroders commented on the study: “The past 18 months have taught us that the future remains difficult to predict and a measured, consistent and patient approach to investing, focused on long term objectives and probable outcomes, is likely to stand investors in better stead.”