As they try to protect their savings during the Covid lockdowns against rising inflation, Savers are investing in stock markets and other investments in order to make sure they have enough.
Investment platform AJ Bell and wealth manager St James’s Place (SJP) both said they have taken in huge sums of money over the past year.
SJP said funds under management hit £148billion at the end of September – up 25 per cent on the same period last year.
Investment platform AJ Bell and wealth manager St James’s Place said they have taken in huge sums of money over the past year
AJ Bell, meanwhile, saw the amount invested through its platforms shoot up 31 per cent over the year to £65.3billion.
Those who kept their jobs through lockdowns saved ‘unprecedented’ amounts, according to one analyst.
Jeremy Fawcett is the head of research consultancy Platforum. He said that new investors can make their first steps by taking advantage of the better savings, working from home, and people going out less.
SJP said people with cash reserves were investing to avoid inflation ‘eroding its value’. The effective value of cash decreases as inflation pushes up prices.
Chief executive Andrew Croft said despite economic ‘uncertainty’ he expected savers would invest 25 per cent more cash with the firm by the end of 2021 than a year earlier.
AJ Bell stated that online investment platforms were the key to its growth. It also stated that rising inflation, low interest rates, and savers who have cash because of lockdowns drove growth.
The investment platform’s customer base shot up by 31 per cent to 367,965 in the year to September 30.
Chief executive Andy Bell hailed the ‘strong growth’ and said it saw very strong demand from retail investors throughout the pandemic.
He said trading activity had ‘returned to more normal levels compared to the peaks seen earlier in the year’ as Covid restrictions have eased.
Both AJ Bell and SJP noted investors’ increasing focus on long-term financial planning.