Two in five won't take investment risk with their money

Protected money

UK consumers are cautious about investing their money for potentially better returns, despite being dissatisfied with returns from savings.

Two in five UK consumers (40%) said they were never willing to take a risk on their money, no matter what the returns might be, according to research by peer-to-peer business property lender, Credit Peers.

However, consumers are also dissatisfied with the returns from their savings, with almost two thirds (65%) citing poor rates of return as their biggest frustration with banks or building societies.

The survey found just 13% always willing to take risks in order to get the best return on their money.

 

Brexit is one possible explanation for this caution, as over a third (34%) of those surveyed are more worried about their financial future as a result of the referendum. And 16% have delayed or cancelled planned investments following the UK’s decision to leave the European Union.

“People could be making their money work harder”

Torsten Hartmann, chief executive of Credit Peers, says: “What we have found is that the turbulent political environment means that people are shying away from taking financial ‘risks’, but at the same time, historically low interest rates are severely hindering their ability to save effectively through traditional means. With an aging population, rising house prices and cost of living compared to salary increases, this is a recipe for disaster. I believe people could be making their money work much harder for them if they were more open to alternative investment options which can offer a better rate of return.”

Meanwhile, consumers’ expectations of returns on their money remain high despite prevailing economic conditions. Nearly half (44%) expect a rate of return on their investments to be between 5%-10%. Almost three quarters (73%) agreed that rate of return was very important, ranking higher than any other investment consideration when choosing how to invest.

For more on the rate of return that you can expect from risky investments, read What is the stock market? and our guide to peer-to-peer lending.

Consumers are also demanding a high level of flexibility from their savings providers, with four in five (84%) expecting the option to access funds at short notice. Other big frustrations with traditional savings include high service fees (26%) and strict penalty charges (25%). As a result of these challenges, over half of savers (58%) trust their bank less than they did five years ago.