Savvy savers cut household expenditure

Just 8% of British savers aged between 30-60 are cutting back on investing in stocks and shares despite the credit crunch, according to research from Bestinvest.

A new Ipsos MORI survey, conducted on behalf of Bestinvest, reveals that many more Brits are cutting back on expenditure on fuel, energy, household bills and other day-to-day expenses rather than their stockmarket investments.

Over one third of those surveyed (38%) admitted to cutting back on the amount of petrol or diesel they used, while 30% are reducing their gas and electricity consumption and 32% cutting spending on their household food bill. Over two fifths of the respondents (44%) have cut back on socialising and 34% have cut down the amount they were planning to spend on holidays.

Paul Fox, Head of Investment Advice at Bestinvest, said: “It would be nice to think that these findings demonstrate that Britain is now a nation of shareholders not shopkeepers! However, the real picture is a little more complex. What we’re seeing is a distinction between long-term goals and the short-term need to cut costs. Most Brits are now financially savvy enough to know that pulling out of the stockmarket now is not a smart move – they’re in it for the long-term. So, they’re being cute and making lifestyle changes rather than locking in their investment losses by selling at the bottom of the market.”

“There are plenty of statistics to show that market recoveries can be just as sharp as market falls and that missing out, even for just a few days, can be very damaging. But - if you’ve decided to remain invested it doesn’t mean you should stick your head in the sand. It is crucial that investors regularly monitor their portfolios to ensure that they are effectively diversified and that they are holding the right mix of assets for their risk profile. The next step is to check that you have the best managers running your money. You may have chosen wisely when you first invested but managers have a habit of regularly moving companies and you need to know if the current manager is the best person for the job.”