Nearly half of UK investors turn risk-averse in light of Covid-19
Nearly half of UK investors believe they have become more risk-averse since the beginning of the Covid-19 pandemic, new research from FJP Investment has revealed.
The investment firm commissioned an independent survey among 735 UK investors, all of which have portfolios in excess of GBP20,000, not including any primary property, savings, pensions or SIPPs. It found that 44 per cent have become more risk-averse in their financial decision-making since March 2020, while 42 per cent have paused on making major investments until the pandemic has passed.
When it comes to investor appetite for new opportunities, the research revealed Brexit has amplified attitudes of caution among UK investors, with four in ten (40 per cent) saying they had become more wary of making new investments as a result.
FJP Investment’s research also found that 39 per cent of investors are currently gravitating towards more traditional asset classes, such as property. Further, the majority (56 per cent) are preferring to leave their money in a savings account, despite the record-low interest rates in the UK.
Looking ahead, 40 per cent of UK investors plan to become far more active in their investments once 'freedom day' arrives.
According to the survey, a further 13 per cent of investors plan to invest in bitcoin or other cryptocurrencies in the coming 12 months, with this rising to 32 per cent among those aged between 18 and 34.
Jamie Johnson, CEO of FJP Investment, says: “In the midst of the pandemic, it is clear that a prevailing sentiment of risk aversion has set in among investors, which has only been exacerbated by further uncertainty in the build-up to and fallout from Brexit. Combined, these factors have led to a state of inertia, with investors holding fire on making any major financial decisions – indeed, many are more comfortable leaving money in savings at present, despite record-low interest rates.
“Tellingly, property continues to be perceived as a safe asset in the eyes of investors, with the market emerging from the pandemic in remarkably buoyant form, further highlighting its resilience as an investment asset. It will be fascinating to watch how, as lockdown measures are fully lifted on 21 June (all being well), investors spark back into life – I expect pent-up demand and savings to be released, resulting in a flurry of investment activity in the second half of 2021.”