British savers are missing out on the opportunities offered by a range of investments as they are more concerned with the security of their capital. That’s the conclusion of a recent survey from F&C Investments which found that consumers are increasingly risk averse and are seeking guaranteed returns in the wake of the global financial crisis.
Savers taking a risk averse attitude towards their investments
The F&C Investments survey found that while the majority of British savers understand that putting cash aside for the future is advisable, many are hampering their objectives by taking a very ‘risk averse’ attitude.
3 in 10 respondents said that complete capital security was the primary attraction to saving while almost half (45 per cent) of respondents stating that the riskiest investment they held was cash on deposit.
Jason Hollands, Head of Corporate Affairs at F&C Investments believes that this conservative attitude is creating problems for many savers. He said: “By refusing to consider any investment that offers the risk of some capital loss alongside the potential for greater gains, people are opening themselves up to the eroding power of inflation.”
Nine out of ten savers using ISAs as part of investment portfolio
F&C Investments also found that more than nine out of ten British savers were using Individual Savings Accounts (ISAs) as part of their investment strategy. ISAs offer tax-free returns and individuals can invest up to £10,680 in an ISA in the tax year 2011/12 – £5,340 of this as a cash deposit.
53.3 per cent of respondents to F&C Investments’ May survey said they used all or part of their ISA allowance each year with a further 40 per cent said they use both ISAs and pensions to maximise the tax efficiency of their investments.