Nearly two fifths (38%) of UK consumers have seen their savings decline in value within the last 12 months, new research from FJP Investment has found.
On average, UK consumers have £18,469 in savings, with almost two thirds (59%) opting to keep their money in savings accounts, due to the security they provide. Indeed, almost half (48%) consider investing their money in stocks or property to be too risky. Brexit likely plays a contributing factor in such attitudes, with 34% of consumers putting major financial decisions on hold until after the UK leaves the EU.
However, 38% of consumers are open to new investment opportunities, if interest rates remain low. This attitude appears to be particularly common amongst millennials (aged 18-34), with almost half (48%) considering alternative investment options to achieve greater returns on their money.
FJP’s research suggests that consumers are already seeking alternative options to the traditional savings account, with almost one in five (18%) switching from the traditional high street bank to a challenger bank, such as Monzo within the past 12 months. Again, millennials appear to be the most open to change, with over a third (33%) claiming to have already made this switch. In comparison, just 6% of consumers aged over 55 have opted to use a challenger bank.
The research suggests that consumers are becoming more proactive in exploring their financial options, with over a quarter (26%) consulting a financial advisor about their savings options. Meanwhile, 61% of survey respondents are calling for banks to be clearer about the various savings and investment options available to them.
Jamie Johnson, CEO of FJP Investment said “Savings accounts are the foundation of many people’s financial strategies. However, with interest rates as they are, it’s unsurprising that so many savers are becoming frustrated by the devaluation of their hard-earned savings.
“Whilst many still value security offered by savings accounts, we are starting to see more people challenge personal finance norms, demanding further advice from banks and proactively seeking consultation from financial advisors. This is especially encouraging when observing millennials, as we are seeing a new wave of more proactive and educated consumers.
“There’s a plethora of promising investment and savings options available to consumers, from investing in stocks and shares to debt investment; and it’s encouraging to see more consumers seizing the opportunity to make the most of their money. It’ll certainly be interesting to see how the savings market evolves in 2020.”
"Theres a plethora of promising investment and savings options available to consumers, from investing in stocks and shares to debt investment."
Jamie Johnson, CEO, FJP Investment