Retail investors cut spending and increase investment

Individual investors have reduced spending and increased their investments during the Covid-19 pandemic, research indicates.

A survey of 2,000 investors in the UK showed that 4 in 10 – or 39% – had “dramatically” cut spending and were funding investments.

ITI Capital, a broker that sponsored the research, said low interest rates were the cause and that 35% of investors would invest more if bank rates were cut further.

Investors favoured traditional investment asset classes, although 24% were exploring cryptocurrency as an alternative investment as it had “not been negatively impacted by Covid-19”.

Just over a quarter said they were more willing to try new investment products and take more risks over the next 12 months.

Meanwhile, 40% of investors said they anticipated a bull run in 2021 if the Covid-19 situation dramatically improved, but 35% expected a house price crash worse than the 2008 crash to occur this year.

Despite the appearance of piles of cash created by reduced spending, 36% of investors said they had dipped into their savings to stay afloat during the Covid-19 crisis.

© 2021 funds europe

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