A third of Brits want to invest their savings this year to make their money work harder for them amid rising inflation – but many have no idea how to do it.
Investment woes
The Moneybox study of 2,000 UK adults revealed more than half (52%) have never put their money into anything other than a regular savings account or a cash ISA. 27% admit that a lack of understanding in how to invest has been putting them off. 30% worry they won’t understand the financial jargon and 46% are worried about losing their money. One in five (21%) still believe that investing in the stock market is only for ‘Wall Street Banker’ types.
But with rising inflation and low-interest rates causing frustration for more than a quarter (27%) of savers, 4 in 10 (42%) are now looking for alternative ways to grow their wealth in the new year. Nearly one in five (18%) want to be braver with their money in 2022.
As a result, 24% are already planning to invest in a stocks and shares ISA in the coming 12 months, 19% are exploring other ways of investing in the stock market, and 17% intend to invest in property. One in 10 (13%) are planning to invest some money in cryptocurrency.
Saving funds for a rainy day
It also emerged that despite this shift towards investing, 94% feel that having a rainy-day fund – to the tune of £8,400 on average – is important. 35% of those surveyed don’t feel like they have enough spare money to invest.
Charlotte Oates, spokesperson from the saving and investing app Moneybox, said: “45% of those polled do not feel confident about investing their money, which is understandable given how overwhelming it can be to get started.
“Growing up we were never taught how to save and build wealth for our future and investing was only ever an option for the wealthy few. In recent years, investing has become so much more accessible to everyone and it’s really encouraging that so many are considering being proactive with their finances to make their money work harder for them, as unfortunately, relying on interest rates to grow your money over the long term isn’t currently an option.”
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“We are committed to doing all we can to help savers become confident investors by providing a range of simple investing options to get you started and tools like the Moneybox Investing Academy to help build confidence before creating a personalised and diversified portfolio aligned to your interests and values.
“Over eight simple lessons, you can learn all about stock market basics, through to asset classes and tracker funds, before finishing with key concepts like compounding and pound cost averaging.”
Pandemic saving
The research also highlighted significant resilience among consumers, with 73% confident they will reach their money milestones this year, according to the survey carried out via OnePoll.
While the pandemic brought many challenges, as a direct result 47% are now committed to bolstering their cash reserves for a rainy day, while 35% are prioritising saving and investing more than they did before the pandemic. Nearly three in 10 (29%) are planning ahead more than they were previously and 17% are planning to put more money towards their pension this year.
But 50% admit to being concerned about the impact that rising costs of living could have on realising their goals, while others worry about unexpected costs (43%), and pandemic-related issues (27%).
In order to be able to put more aside to achieve their goals, 39% plan to spend less this year on the things they don’t need and 28% are going to budget more.
Others plan to sell things they don’t need (28%), shop second hand (19%) and go out less (10%).
Charlotte added: “The challenges of the last few years have prompted us all to reevaluate certain aspects of our lives. When it comes to your finances, setting clear short, medium and long-term goals will help you feel more confident, in control, and ready to weather any storms along the way. Once you’ve built up a cash buffer for emergencies and unexpected costs, investing can be a great way to beat inflation and grow your money over the long term.”
