87% can afford to invest but don’t have enough knowledge of the market

Over three quarters (82%) of UK adults have revealed they don’t believe they are saving enough money to supply them with a comfortable income in retirement.

Current research has highlighted that 87% of us feel like we can afford to invest to help towards our retirement in the future but we don’t have enough knowledge to take the plunge. Investment can help generate a higher standard of living later in life, rather than money simply resting; however these figures show that people aren’t without their doubts.

A new study of 2,000 UK adults conducted by investment experts IpsoFacto Investor, shows that a third (32%) have invested in the past. Despite this, a staggering 85% do not follow what is happening to stock markets across the world and three quarters (74%) do not understand the stocks and shares market.

Stock Market (PD)

There are many factors across the world making potential and existing investors nervous in the current climate. After years of strong growth in the economy China appears to be slowing down causing the Chinese stock market to crash. In turn this is impacting other markets as investors fear the global economy is still fragile after the financial crisis of 2008/09. In particular oil and commodity prices have been falling.

Over half (57%) were not aware of what is happening to the price of oil in the current market. Despite heightened tension in the Middle East, oil prices have been plunging as the market expects surplus supply and lower demand for oil, especially from China. This has reduced business investments in the oil, gas and other related sectors, but should also lead to many Western consumers being better off.

David Liddell, Director from IpsoFacto Investor said:

With doom and gloom all around, and not just in the financial press, investors have every right to be feeling nervous. These are difficult times with big swings in market sentiment, making stock exchanges exceptionally volatile. This is in turn a function of investors’ uncertainty about the future for the global economy. So far this year the main UK stockmarket index the FTSE 100 has fallen as much as 11% at its lowest point but has since bounced back by 9%. This is after a difficult year for investors in 2015. At times like this it is particularly important for investors to have access to sound and sensible advice which takes a long term view. Times of maximum despair, when asset prices are cheap, can be a great time to invest.

When it comes to investing, it’s not easy to know what account will provide the greatest returns. 8 in 10 (83%) did not know what SIPPs were and 26% were unaware of ISAs.

An ISA is an Individual Savings Account, a scheme that allows individuals to hold cash, shares and unit trusts free of tax on dividends, interest and capital gains. A SIPP is a Self-Invested Personal Pension – also free from tax within the plan, however the investor can get tax relief on the amount they put in. Both are excellent vehicles for the individual to choose and manage their investments.

Despite all this uncertainty the research also proved that potential investors strive to be financially independent when it comes to their finances. A colossal 82% of respondents would invest in the current climate; however 88% would not know what resources to use when researching potential investments.

David went on to say that: “Getting investment right is a difficult skill – part art, part science. Nobody really knows what the short term future holds. However, there is no shortage of people trying to sell the latest fad, which it is almost always right to ignore. It is possible to stack the odds in your favour by planning and researching. You need to plan your investment strategy and think about what your aims are and how much money you can afford to invest. Then it is essential to research how best to implement that strategy. Diversification, spreading your investments across different assets is vital and regular monitoring of your investment portfolio, without being obsessed with short term price moves, is also essential for successful investment.

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