Record low interest rates and an inflation figure of 3.2%*, means the nation’s cash savers are struggling to get anything like a decent return on their money meaning they will be losing money in real terms, as the purchasing power of their money reduces.
According to the new FCA Consumer Investment Strategy, 8.6 million people are saving more than £10,000 in cash which for many could be working much harder if invested.
Many savers view investments as far too risky and flee to what they believe is the safe haven of cash
Conversely, the pandemic also saw a new breed of investor emerge, as some of those with additional savings chose to pile these newfound funds into higher-risk investments, leaving themselves open to heavy losses or even online scams due to their inexperience.
Investments have never been more accessible, and you can now buy and sell securities, including complex products like options and other derivative contracts, at the click of a button.
Financial advice can improve how you invest
The UK’s advice and guidance gap has led to consumers making choices that are unsuitable for their needs or disengaging from their finances and making no choices at all.
- 45% of those who had invested without advice did not understand that they could lose money**
- 24% of UK adults have little or no confidence in managing their money
- 46% have low knowledge on financial matters.
At present only 8% of the nation has received financial advice, which is worrying when it can have such a dramatic impact on someone’s financial life. Advice is about far more than just investing: it’s about taxation, investment choices and helping people to navigate emotions, behavioural biases, and the practicalities that life throws at them.