UK savers set to invest more as confidence returns

26th February 2014

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On the back of improving economic trends the vast majority of UK investors are looking to increase the amount they save in 2014 as they become increasingly confident about the opportunities ahead, according to new research.

The Schroders Global Investment Trends Report 2014, which surveyed 15,749 investors across 23 countries, found that almost two thirds, at 64%, of UK investors are more confident about investment opportunities this year compared to less than half, at 41% in 2013.

As a result, some 91% of UK investors are looking to maintain or increase the amount they invest and save in 2014.

Almost half, at 44%, of UK respondents said they are planning to invest any disposable income, whilst 17% will deposit it in a savings account.

Just 9%, however, will pay off debts. Surprisingly, a quarter, at 25%, intend to spend it on a luxury purchase – possibly explaining why the UK is experiencing a consumer-led recovery.

When it comes to which asset class investors are looking at, 67% said they would be looking to invest in equities, with the most popular being UK equities, at 43%.

The British love affair with property appears set to continue with 13% favouring bricks and mortar and 10% looking at property funds this year. The report also shows that just 11% of UK investors will be looking to invest in bonds.

This increased appetite for equities appears to reflect a more positive long-term economic outlook, despite recent market volatility. The report reveals that around the world investors are looking to invest in developed economies, as these are perceived as offering more stable potential returns and the best growth opportunities.

These trends are mirrored globally with more than four-fifths, at 82%, of investors worldwide looking to maintain or increase the amount they invest and save this year, and 70% looking to invest in equities.

Asia retains its crown as the region that UK investors expect to drive the strongest overall growth in 2014, with 58% favouring the region. However, this expectation is not translated into action, and despite believing that Asia will deliver the best returns, just 13% of UK investors polled are planning to invest in Asian (including Japan) equities this year.

Robin Stoakley, head of UK Intermediary at Schroders says: “There are real signs of investor confidence emerging in the UK and it appears that people are taking a more global view as they seek to capitalise on the improving economic environment. However, as investor confidence improves they should seek professional guidance in order to ensure they have a well balanced mix of investments.

“Encouragingly, our report shows that once investors have paid monthly bills, a key priority is to invest with the majority of investors choosing to do so for their retirement. Indeed, almost two-thirds of the investors polled stated retirement as their main reason for saving.”

 

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