A quarter of high net worth investors hold more than 50 per cent of their wealth in cash as they believe that it is the least risky option, new research has found.
A further 35 per cent of those with more than £100,000 in investable assets keep between 26 to 50 per cent of their savings in cash, according to research by Rathbone Investment Management published today.
Investors choose to keep their savings in cash because they consider it to be the safest option, however a low interest environment and high inflation could cause cash to devalue over time, Rathbone warned.
Regular investors, who have between £1000 and £100,000 in investable assets, are also reliant on cash savings with 46 per cent admitting to keeping more than half of their wealth in cash.
Rathbones investment director Robert Szechenyi said: “Cash remains king as investors remain cautious.
“Despite the threat of low interest rates devaluing their wealth over the long term, investors still believe cash to be the safest option for their money.
“This is largely down to the economic and political uncertainty currently at play in the UK and wider afield. Investors are concerned about the impact that impending events such as Brexit will have on the markets and therefore are hesitant to invest a significant proportion of their wealth into the markets.
“However, it’s important to remember that investing is a long-term game, and to make the most of compounding staying in the market over a long period of time is the best way to access good returns.
“Ensuring that your investment portfolio is well-diversified across assets and regions will help to offset volatility."