UK investors shun long-term saving
Investors in the UK are adopting a short-term approach to their savings compared to those in the Middle and Far East according to a new investor sentiment survey from Friends Life.
The research conducted in the UK revealed more than a quarter (26%) of investors are preferring to opt for a short investment horizon of 'no longer than three years'. This contrasts with a longer term investment approach among investors polled as part of the Friends Provident International (FPI) Investor Attitudes Report which showed 20% of investors in Singapore opting for a three-year-plus strategy and an even greater proportion of savers in the UAE- 31%- favouring an investment time horizon of longer than three years.
The study among UK investors also revealed a divergence of opinion over which assets are best to invest in against the current market conditions with almost half (48%) believing now is a good time to invest in property. In sharp contrast the FPI Investor Attitudes Report highlighted that property was among the least favoured asset class for investors in Hong Kong and Singapore.
Investors in the UK also differed in their appetite for collectables such as wine, vintage cars and art with over a third (40%) stating now was a prime time to invest in these asset classes. Contrastingly in the UAE, the preference for investing in such collectables plummeted and this is now the least preferred asset class among investors.
Mark Versey, Chief Investment Officer at Friends Life Investments commented: "Investors in the UK are displaying a more varied approach to what they consider as good investment strategies in the current economic climate compared to their peers overseas. Our survey uncovered a lack of appetite for long-term investments but showed that UK investors remain cautious in their outlook with almost a third keen to preserve their savings through risk free investments. The reticence towards long-term saving is an interesting one; we need to understand whether this is driven by a lack of demand based on risk appetite and market outlook or perhaps more likely a lack of suitable low risk, long term investment products to meet demand."
The UK-based survey also indicated an appetite among investors to either trust their own instincts regarding investment choices or seek guidance from their peers. Twenty nine per cent confirmed they would seek information and / or advice from friends and family before making an investment decision. And, in a sign of just how important the internet has become as a source of financial advice, a further 17 per cent agreed that they would consult consumer of financial internet forums. A further 10 per cent confirmed they would not seek out any information or advice at all before making any investment decisions, preferring instead to go it alone.
Mark Versey continued: "Our research identified a short-term investment outlook amongst UK consumers using simple and flexible investment products. With the majority of respondents indicating banks and building society accounts fit this bill over pensions, which only 54% consider as low risk, it is clear something has to be done to help plug that savings product gap."