Cash is still king for the majority of UK investors
Cautious Brits have continued to pile money into cash savings even as interest rates remain at record lows.
Some 70 per cent of Brits have put their money into cash savings with a further 38 per cent putting more in over the next year, according to research commissioned by broker HYCM.
It comes even after the Bank of England’s decision to slash interest rates to record lows to stimulate the economy during the pandemic.
Last week the central bank left interest rates on hold at 0.1 per cent and even flirted with negative rates although warned it would take six months for banks to prepare.
The results mirror findings from the start of the pandemic suggesting Brits remain cautious amid the economic recovery.
“The big question now is what kind of assurances investors will need to look to beyond cash savings. Should the vaccine rollout and current lockdown successfully curb COVID-19 cases, I’d expect more investors to start moving some of their cash into other assets,” Giles Coghlan, chief currency analyst at HYCM said.
The survey of 900 investors, with investments in excess of £10,000, reveals the appeal of stocks and shares is tailing off in comparison to cash. Forty per cent have put their money into stocks and shares over the past year but just 27 per cent plan to buy more shares in the next 12 months.
Cryptocurrencies continue to be somewhat of a fringe investment in the UK for now. Unswayed by Elon Musk’s tweets about bitcoin and dogecoin, just a fifth of investors have piled into crypto over the past year.
“As was the case in early 2020, markets are riding high at the moment. However, we should not let this overshadow the problems still posed by COVID-19,” Stavros Lambouris, chief executive of HYCM said. “A sudden change in circumstances could result in an abrupt risk-off scenario, with investors retreating to safe-haven assets.”