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Investors retreat to cash savings amidst COVID-19

by LLP Editor
18th Jun 20 10:14 am

HYCM has commissioned an independent survey of more than 900 UK-based investors (all with investments in excess of £10,000) to find out how they are investing amidst the coronavirus.

The research revealed the most common assets investors currently hold are cash savings (73%), private pensions (51%) and stocks and shares (44%). A third (33%) of all investors said they will be putting more money into their savings account in the coming 12 months, while 22% are planning on buying more shares.

When it comes to the least popular asset classes, cryptocurrencies (20%), classic cars (21%) and social and impact investments (22%) ranked the lowest. However, 15% of all investors surveyed said they are considering social and impact investments in the year ahead.

The research conducted on behalf of HYCM revealed that 30% of UK investors have radically changed their investment strategies for the current financial year as a result of the coronavirus pandemic. Nonetheless, despite the uncertainty, 36% are confident in the way they are managing their finances at present.

Looking to the future, 31% of investors believe they will emerge from the coronavirus pandemic in a stronger financial position. Yet the same number (31%) are also making more short-term financial decisions given the difficultly of effectively planning for the future.

Giles Coghlan, Chief Currency Analyst at HYCM, said: “The volatile trading conditions spurred on by COVID-19 clearly has some investors worried. Even with interest rates at a historic low of 0.10%, the majority are looking to the low-risk option of cash savings. That said, despite the initial losses suffered on the FTSE as a result of COVID-19, a significant proportion of investors are also considering stocks and shares in the months ahead.

“Looking to the future, the market sentiment shows some sort of optimism among many investors that they will be able to weather the current challenge, though this might require making more short-term investment decisions. With markets slowly recovering, new opportunities are presenting themselves. The challenge, though, is for investors to still work towards long-term financial objectives even when there is so much uncertainty around us.”

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