Savers look to cash admit concerns about market conditions
- Research by Aegon reveals extent of nervous investor sentiment with 55%[i] worried about the state of the global economy or the threat of another financial crash
- Investors are opting to hold more money in cash in the next tax year, with 20% saying this is the case for them and just under a quarter (24%) undecided about how much to hold in cash
- 67% of those surveyed[ii] said they are unlikely to invest in stocks and shares in the next year, with 15% currently holding between 51%-100% of their investments in cash
- Just under a third of savers (30%) would opt for a phased investment approach, enabling them to move money from cash into other investments over a pre-defined period
Research by Aegon has revealed that as the end of tax year approaches, savers are opting for a safety-first approach when it comes to taking advantage of ISA and pension tax allowances.
Overall, investors are nervous about the impact of current market volatility on their investments, with 55% admitting that they are concerned about the state of the global economy or the threat of another financial crash. 63% of those surveyed said that they are worried about the impact of current market conditions on the performance of their investments, including their pension.
Reflecting this nervousness, investors are looking to reduce exposure to potential volatile conditions during current uncertainty by opting to hold more money in cash in the next tax year. One in five (20%) of those surveyed said that they will hold more in cash in the tax year 2019/20, with just under a quarter (24%) undecided about whether or not they will save more in cash.
Research suggests that savers are willing to forego the potential gains of investing in the stock market for the stability that cash provides. 67% said they are unlikely to invest in stocks and shares over the next year, with a relatively high proportion of 15% currently holding between 51%-100% of their investments in cash.
Given the option, just under a third (30%) of savers would opt for a phased investment approach, allowing them to make use of their yearly ISA and pension tax allowances, by moving money from cash into other investments over a pre-defined short-term period to help avoid market timing risk.
Ronnie Taylor, Chief Distribution Officer at Aegon comments:
“It is unsurprising that in the current landscape, investors are nervous about where they should put their money. Cash offers a relatively safe short-term solution in turbulent times and our research shows that as tax year end approaches, savers are opting to hold more money in cash. A relatively high proportion of savers would prefer to opt for a phased investment approach in order to take advantage of ISA and pension tax allowances, allowing them to use cash as a temporary stepping stone before they invest in the stock market. Given the current investment climate, a good financial adviser can help build savers’ confidence and provide information to help investors navigate volatility. They can also inform you of the best investment option for you to match life stage and goals.”
Research was conducted by Aegon with the Aegon UK consumer panel. Total sample size was over 500 adults, weighted to be nationally representative. Fieldwork was undertaken in March 2019.
At Aegon we provide a range of ways to hold cash as part of investment strategy and we have provided additional support for advisers looking to advise clients on cash at: www.aegon.co.uk/adviser
[i] Research carried out by Opinium in October 2018 among over 2,000 UK adults, weighted to be nationally representative
[ii] Research carried out by Opinium in October 2018 among over 2,000 UK adults, weighted to be nationally representative
Notes to Editors
- In the UK, Aegon offers retirement, workplace savings and protection solutions to around three million customers and employs more than 3,000 staff. More information: aegon.co.uk
- As an international life insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty markets in the Americas, Europe and Asia. Aegon companies employ over 25,000 people and have millions of customers across the globe. Further information: aegon.com
Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 165548. An Aegon company.www.aegon.co.uk
© 2019 Aegon UK plc.